Fund Profile: Main Street Phoenix Project
Jason Wiener on Scaling for Resilience
In March 2020, Colorado-based coop attorney Jason Wiener found himself thinking about the onset of the pandemic and its likely catastrophic impact, especially on immigrant workers.
An attorney with specialties in both sustainable economies and cooperatives, Wiener played a key role in restructuring Namaste Solar as a worker-owned cooperative. He could see what was coming for the restaurant and retail sectors in this country. Nothing less than a wave of “disaster capitalism” was forming in the shape of hedge funds and private equity firms, all eager to buy at the bottom of a crisis, then consolidate and homogenize whole industry sectors, displacing many thousands of workers.
“To me,” Wiener explains, “it looked like an oncoming assault on our ‘main street’ businesses — the restaurants, personal care businesses, child care centers, retail places where we gather and celebrate. And where we typically employ millions of people, many in a precarious existence.”
He began to think about a coordinated response, one which could scale, streamline and simplify quickly, as well as something that had real economic staying power. He decided to try something radical: use the private equity investment model (usually meaning, “buy it, restructure it, and flip it”) but turn the pyramid upside down. You provide an exit plan for the sellers, just as private equity does, but then the switcheroo: you swap in the workers as the new equity owners in place of outside investors.
Thus was born the Main Street Phoenix Project (MSPP), a growing national network and holding company offering a turnkey approach to buying and converting main street businesses in order to rescue — and then newly empower — their workforces, using a model of 100% employee ownership.
“We’re not just investing. We use a form of accelerated due diligence to buy and close the business in 90 days, roll it into our portfolio, and then use the excess cashflow for worker dividends, worker economic security, and a shared back-office system.”
The MSPP team’s solution, as they describe it, combines industry know-how, progressive values, and “a high-touch, hands-on” ownership structure. Wiener notes, “We began to see we had the ability to create world-class jobs, using a tried and true model.”
Just as private equity firms claim to add value by reducing risk, Main Street Phoenix focuses on one of the greatest risks in the restaurant / retail sector — employee turnover.
And their solution (eventually)? An unheard-of member-owner package of 401Ks, healthcare, disability care, unemployment benefits, job portability, and an education stipend.
The MSPP vision is a striking example of the “social alchemy” Wiener says can happen when co-op lawyers and securities lawyers, activists, organizers and business leaders “push the envelope of what’s possible, especially through a social / racial justice lens.”
Their goal of scale: buying 25 restaurants will mean over 500 new worker-owners and over 1,000 employees on payroll, putting MSPP among the five largest worker-cooperatives in the U.S.
Wiener says MSPP’s funding strategy has evolved to one of searching for “needles in a haystack” — meaning primarily high-net-worth individuals. Since their launch in April 2020, he and his team have met with hundreds of venture capital firms, angel investors, foundations, and others — most of whom claimed to be seeking “impact.”
“This is a transformative model,” he argues. “Everybody agrees it’s bold and ambitious.” And that’s the challenge Main Street Phoenix is offering the impact investing world: time to put your money where your mouth is and realize it’s Main Street, not Wall Street, that needs our focus now.
For further information about Main Street Phoenix, contact Marisol Lazo-Flores at firstname.lastname@example.org.
Our full conversation with Jason Wiener can be watched / listened to in the recording directly below.