Table 2. Comparison of non-traditional cooperative models
Non-Traditional Model Advantages Disadvantages
Proportional Investment
Cooperative
• Base capital tied to strategic
capital requirements
• Flexibility
• Member ownership and
control
• Fairness
• Systematic equity redemption
• Not suitable for cooperatives
with high member turnover
• May require substantial capital
requirements by members
• Not source of permanent
equity capital
• Dependence on internally
generated capital
Member-Investor
Cooperative
• Member ownership and
control
• Incentives to invest
• Return on invested capital
• Interest divergence
• Member-patrons vs. memberinvestors
• Non-permanent equity capital
• Arbitrary rules for share
appreciability
New Generation
Cooperative
• Incentives to invest
• Performance measure
• Incentive compensation to
management
• Permanent source of equity
capital
• Cash patronage refunds
• Barrier to new member entry
• Illiquid secondary market for
delivery rights
• Members’ risk bearing
capacity
Capital Seeking
Alliances
• Non-member equity capital
• Flexibility
• Focused, specialized
management
• Share in profits
• Market access
• Control
• Conflicts of interest
• Transfer price
Irish Model • Non-member, permanent
equity capital
• Access to equity markets
• Unrestricted ownership rights
• Market value of shares
• Members have access to
capital gains and dividend
income
• Control
• Divergence of interest
• Transfer price
• Equity market oversight
• Need to perform
• Transition to IOF
Investor Share
Cooperative
• Non-member, permanent
equity capital
• Access to equity markets
• Control
• Divergence of interest
• Different classes of share