How can we build a sustainable business?

A high priority for the development of the EHC is to establish a financially sustainable model, so that we can..

• compensate all full time / part time team contributors in a fair manner
• have enough financial resources to support the scaling of the organisation, invest into further technological developments, facilitate the knowledge exchange between our different members through online & offline formats and co-campaign for more cooperative housing across Europe

While there’s no detailed financial forecast yet for the next years (due to too many unknown variables yet, at this stage) - these are the planned Revenue Streams:

1️⃣  EHC Coop Shares

• Individuals and companies that want to participate and benefit from EHC’s activities have to become a member in our European Cooperative - they buy shares. Through these shares, they are also co-owners of the company. While we hope that members will stay with the EHC for a long time, they can potentially also leave the coop again, receiving the invested money back (potentially with interests, tbd)
• The capital from the coop shares serves as working capital, helping the EHC to get the business off the ground
• Each share is set at a fixed price, e.g. 100€

• Even municipalities / cities or publicly owned companies could become partnering entities and acquire shares in the EHC - to undermine that establishing more sustainable forms of housing across Europe is an endeavour where we have to collaborate across national, organisational and ideological borders.

2️⃣  Annual Membership fees

• In addition to the shares, all members pay an annual fee to support the activities and further development of the EHC - while their membership continuously grants them different benefits, depending on their stakeholder type
• Similar to the share requirements for the different member types, the annual fees will vary. Pricing structure for the annual fees could be set accordingly e.g.
• from 100 € for individuals to 10.000 € for large companies (1000+ employees)

3️⃣  Service fees for the centralised booking platform

• We provide a central booking platform for all shorter stays of members at the affiliated local spaces. The same platform also serves the local projects the opportunity to market their event spaces to members for bookings (e.g. for a company event).
• EHC takes a service fee that (on top of covering payment related costs) generates additional revenue for the EHC

4️⃣  Fees for managing our own impact driven fund

• Depending on the structure of our envisioned pan-european impact investment fund that (co)finances the acquisition of assets and the development / refurbishment of local spaces, EHC can charge a reasonable fee for operating that financial vehicle

Assumptions in our model

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Even though several actors have already signalled their support, stating that they believe in this approach, we are still at a very early stage. Our model is based on a number of brave assumptions, and we need to validate them on a broader scale over the next few months - or iterate the model accordingly... :) 👉 Our timeline

These are our key assumptions:

There are (enough) people across the EU who…

• are willing to become part of a European cooperative and acquire coop shares, with the outlook that the EHC will initiate new housing projects, granting our member community access to temporary and long term sustainable housing across the EU
• are willing to pay a yearly fee to support the activities and further development of the EHC
• are willing to live in (slightly) smaller individual spaces in exchange for access to great shared communal spaces and resources - while contributing to a lower ecological footprint altogether
• believe in a societal benefit of this model, fostering a more united Europe / EU

There are (enough) local housing cooperatives….

• which believe in the merits of a pan-european approach and are eager to collaborate with the EHC to develop new local lighthouse projects
• which feel comfortable to take over the lead for the local development & operations for potential future projects while those are set in a certain common framework

There are (enough) asset owners and investors who…

• are willing to make less profit in return for a greater societal return, a contribution to a united Europe and to climate neutrality (#tripple bottom line)

There are (enough) companies…

• are willing to become paying members of the EHC as they share our mission
• that value the opportunity to find new customers & markets for their services & products while also being willing to offer EHC members attractive deals & conditions

The European Cooperative (SCE) as a legal structure (see below)…

• is a suitable legal and organisational framework to pursuit this project, allowing us to align the different stakeholders’ interests & contributions

Legal structure: We plan to use the “SCE”

Legal entity

• The current plan is to found the EHC as an SCE, a European Cooperative Society - with its head office in Berlin, Germany - where it will also be registered and pay taxes, accordingly.

• The SCE (for Latin Societas Cooperativa Europaea) is a European cooperative type of company, that was established by the EU in 2006, together with the Societas Europaea (SE). Many pan-european active companies back then were lobbying for the emergence of the SE - as a European public limited company - and the media was almost entirely focused on the SE as a new legal vehicle, providing an easier way to do business as a public company across the EU. The goal for the creation of the SCE was similar, but in a cooperative framework. The SCE practically removes the need for cooperatives to establish a subsidiary in each member state of the European Union in which they operate.
• However, almost 20 years later, the existence of the SCE is still wildly unknown - even within the cooperative sector.
• Nevertheless, it appears to be a structure that would work well for what we’re trying to accomplish with the European Housing Coop, uniting various types of stakeholders (individuals, companies, existing local coops etc.) together in one pan-european company.
• No matter where SCEs are established, SCEs are governed by a single EU-wide set of rules and principles which are supplemented by the laws on co-operatives in each member state, and other areas of law. That means: On all issues not regulated by the SCE statute, national law will apply!

To establish an SCE in the EU, we must meet the following requirements:

1. Formation: An SCE can be formed by five or more natural persons or legal entities residing in at least two different EU Member States
2. Minimum capital requirement: The minimum capital required for an SCE is €30,000.
3. Registration: An SCE must be registered in the EU country where it has its head office.
4. Employee involvement: The arrangements for the involvement of employees (information, consultation, and participation) must be established in every SCE. In defining these arrangements, the national rules of the country where the head office is located apply to SCEs established.