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Instead of IPOs and acquisitions, exiting to community is one alternative

The tech industry is built on the venture capital model where hockey stick growth and selling to a larger company or going public are markers of success. But the traditional VC model does not leave much room for startups that might not be the next unicorn but still generate revenue — just not the type of returns investors are looking for.

This is where exiting to the community comes in.

“A lot of times, selling to the public doesn’t necessarily make the company or its service a better experience for the user or the workers,” Start.coop founder Greg Brodsky previously told TechCrunch. “Often it gets worse. It’s only really better for the investor.”

Brodsky, who helps cooperative startups through the Start.coop accelerator, pointed to this exit to community idea as an option for startups looking to transition out of the more traditional Silicon Valley model. In this framework, some portion of the company is sold back to the workers or end users, he said. This idea is being spearheaded by Nathan Schneider, a Start.coop board member and professor of media studies at the University of Colorado, Boulder.

“The idea with exit to community is how can you create a model where the whole point is to create a vibrant community that will become its eventual stewards,” Schneider tells TechCrunch. “It seems like a natural fit, especially in a moment where we’re looking for increased accountability and the wealth distribution problems in the startup economy.”

Through the Exit to Community project, Schneider is exploring ways to help startups transition from investor-owned to community ownership, which could include users, customers, workers or some combination of all stakeholders. Schneider is holding a series of meetings with people interested in this challenge to try to chart a clear pathway.

This co-op wants to put money back into patients’ hands

Too often, people are asked to give away their insights and time for free. Jen Horonjeff, founder and CEO of healthcare startup Savvy, knows this first hand and is trying to change that by applying a cooperative model to her business.

As an infant, Horonjeff was diagnosed with juvenile idiopathic arthritis. Since then, she has been diagnosed with a number of autoimmune conditions. Seven years ago this month, she had a brain tumor removed.

“I’ve just always been somebody who’s been a patient,” Horonjeff tells TechCrunch.

Horonjeff’s experience in the health system led her to become a human factors engineer focused on human-centered design, she says. In that area, work centers on trying to fit the world to people with different abilities, rather than the other way around. From there, Horonjeff, who has her doctorate in environmental medicine, has been most interested in patient-centered outcomes.

“So what matters to patients and what affects their health and health behaviors outside of just the traditional things [are what] we’ve been looking at,” she says. “It was being on that side of the professional equation that I heard my colleagues and partners talking about wanting to help patients, but they were never talking with them. And what they were talking about were not the same priorities as the patient communities that I was part of. And because I’m very open about my condition, they kept coming to me to ask me to be that sole patient representative. When they kept coming back to me, that was really a signal of a diversity issue, since I am white with a Ph.D. in New York City.”

Horonjeff’s discomfort with the lack of diversity led her to become a matchmaker between healthcare innovators and patient communities. This is where the idea for Savvy was born.