For the sake of creating a united racial nation, its important for all of us to come together to take control of our own economies. However, after talking to a few older cats that I look up to, I realized that my primary reason for not expanding my small enterprise was a lack of capital. I recognize that this is one of the main reasons most brothers and sisters with great business ideas are never able to manifest them. I discussed that fact with one of my mentors who told me to either find an angel investor or join a “cooperative”. I had never heard the word Cooperative in any of my business classes, so that prompted me to do some research and seek out African American Cooperatives (I found none, at least not online). As I dug deeper into what Cooperatives were, I realized that I had heard the principles of Cooperative Enterprise talked about by a few online black bloggers and in books like Black Wall Street.
I also asked myself questions like:
- How are people able to save up enough money to buy apartment buildings?
- How are individual investors able to purchase large shares of stock at one time?
- How are these people able to make major money moves without taking on debt?
The answer is Cooperatives. Ace Hardware, Jackson Electric, Floridas Natural Growers, and The Pentagon Federal Credit Union are all examples of people joining together to create an enterprise.
What is a Cooperative?
A Cooperative is the professional title for a group of people working together for mutual benefit. A cooperative business belongs to the people who use it – people who have organized to provide themselves with the goods and services they need, while making money at the same time. Member-owners meet regularly, present and hear reports on their business and investment activities, and hire General Managers to handle day-to-day affairs in their companies. Members invest in the businesses to provide capital for a strong and efficient operation, and once the businesses start making money, the profits are returned to co-op members. There are over 100 million people involved in 47,000 U.S. cooperatives that are in every sector of our economy.
Bottom Line: A Cooperative is a group of investors who pool their money, ideas, and education together to create enterprises that make them more money.
Tiger21 (an acronym for The Investment Group for Enhanced Results, 21st Century) is an insider group (aka a good ole boy network – I bet not a single Black man has been a member since the club’s inception!) for high net worth individuals. High net worth meaning you must have a net worth of $10 Million or more to be a member. These individuals attend private, day long gatherings where their investment portfolios are shared and dissected, business deals are made, and ideas are exchanged. Meetings begin with a World Update (to keep members aware of possible investing opportunities and threats), lunch consists of speakers from large investment firms who are called in to deliver presentations, and unmoderated group sessions wrap up the meeting. Tiger21 is probably the most influential, most productive, and least talked about Cooperative in America. What gives this group its power and influence is the fact that they are a group of people working together for mutual benefit.
The Worlds Most Famous Cooperative
The worlds most famous (infamous?) Cooperative, the Mafia, built their financial empire by utilizing the principles here. In fact, because of their collective intelligence, they have done very well during this recession by lending and investing what’s become a scarce commodity these days: a growing hoard of cash. (Bloomberg.com; May 2009)
Unlike over leveraged companies burned in the credit crisis, the Mafia and its cash-based, debt-free business model are breezing through economic hard times. With young, savvy leaders at the helm, organized crime is poised to expand as legitimate companies founder. “There’s a risk that Mafia organizations can profit from the current crisis by buying control of struggling businesses…”
Say what you will about La Cosa Nostra and their violent ways, when it comes to business these criminals are masterminds. Each and every member of the Family was dedicated to working for the greater good, and the enterprises they built are so far removed from the “gangsters” that created them that some of thos companies are now publicly traded companies on Wall Street!
Ego, Trust, and Recruiting
There are 3 problems that one would encounter while trying to build a group: trust, ego, and recruiting:
A Black Man is naturally proud of his ability to make moves on his own. Black men tend to be solitary creatures that hunt alone, and the idea of joining a cooperative would interfere with their ego and the image they have built of themselves. This has to be overcome, since we are just the kind of strong willed, intelligent, and able individuals that would make for a powerful group. But even if you were able to convince another Black Man or woman of the mutual benefit of joining forces, you would still have a major issue – trust. When it comes to trust, I believe the Mafia was so successful because of the fact that they kept their dealings in the family, and in most (not all) cases you can trust family more that strangers. A stranger could pick up and move to Japan and you’d never hear from them again, but if your brother did the same thing , he would eventually be ratted out by a call from your niece or nephew.
But how would you be able to maintain a level of trust with a group of people you arent related to? Questions would have to be answered like: Once money is collected for investing, who would hold on to it? Who would be able to access it? Once an enterprise is launched, how will all members be sure they are getting their fair share of the profits?
Recruiting individuals would be difficult, since recruiting means getting people to commit their time, energy, and money to a group of people they do not know. And also there is the problem of recruiting the right mix of people.
If all these problems can be overcome, the result would be a group of investors able to launch enterprises, buy real estate (and split collected rents), and take on increasingly more lucrative and influential business endeavors. It can be done, as you have seen in the cases of the Mafia, TIGER 21, Black Wall Street, and probably in the company that you work for. The question remains for us in the black community; Who will do it?