Natural Finance summary for communes/partnerships

A commune does not imply a lack of profit maximization focus compared to a regular corporation.  It is simply an organization structured as an egalitarian partnership.  The overwhelming advantages of structuring an organization as a commune is overcoming the inherent abuse created by power imbalances of unequal ownership and hierarchical organizational structures, and controling corporate corruption by having more eyes with the authority to check employees and other partners.  This article is a summary and catalog of the ideas I've developed in promoting financial transactions in communes.

Natural Governance principles apply to any egalitarian partnership or society.  The one immutable principle is that the circle of partners has ultimate authority, and each partner has the right to an equal share of profits, and the right to be paid that share by default (subject to communal obligations decided by the circle).  As a solution to voter apathy, any partner can delegate his vote in any one or several functional areas to someone else, but delegate authority can be removed at any time.  As a solution to increasing decision speed, specific executive authority can be assigned  to individuals or groups for projects, duties, functional areas based on democratically approved proposals that include salary, budget, and specific narrow decision authority/mandates.  Approved proposals are rarely given any lengthy term or monopoly powers, are likely accompanied by supervisory/review proposals, but by default carry review powers by the full circle often though delegates for the single functional role.  Line item authority and project scope is reviewable by the circle and delegates.  Proposals to replace or eliminate the executor of duties or functional direction can be made by other individuals.  Natural Governance provides an entrepreneurial framework within an organization where any perceived need can be championed by any person that sees it, and who then tailors an exploration and implementation strategy that is acceptable to most partners.

Natural Finance and Natural Governance facilitate investment in communes without ever compromising the rights of creditors or other partners.  In natural financed communes, new partnership investment is a transaction exclusively among partners. For large partnerships, a democratically set (median) purchase amount is determined by the existing partners, and an nth partner willing to buy at that price, gets a new share, pays (1/n) the value of the partnership, and the proceeds are distributed evenly among the (n-1) existing partners.  So even in a partnership of millions, it is fairly straightforward process to admit new partners.  If the share price is too high for most people/workers to afford, they can share in the prosperity of the commune through communal equity options which can be tailored to any affordability level.

Because informed investors need to plan for eventual or possible exit from a private company or commune it is critical that processes to facilitate such exit exist.  Natural democratic governance processes allow the circle of partners to use their median bid for share repurchases as an amount a selling partner could accept, or allows the partnership to vote on accepting the best offer.  Both of these alternatives require that a natural finance project be funded with new loans (likely by existing partners in varying levels).  Another alternative that does not involve new partner funding is to give the partners and option holders the right to bid  against each other (at least 20% discount) in order to sell their share, at the time of a new buyer's transaction, and with proceeds coming from a new share buyer's transaction.

Natural Finance's main focus is debt financing guaranteed to never cause dilution to a creditor because all loans are ordered in sequential payment priority.  Natural Finance permits higher debt capacity and lower financing costs through lower risk loans primarily achieved by proactive monitoring.  The symbiosis with egalitarian partnerships is that equal authority of owners provides controls that limit waste and boondoggles to the benefit of both owners and creditors, and so limits the monitoring activity required from external natural finance controller.  Owners benefit from active control of financial accounts to prevent embezzlement from an owner.

Communes have traditionally been based in anti-capitalist ideology.  Natural finance recognizes the  oppression inherent in hierarchical management structures including towards minority and other shareholders.  The purpose of financial communal equity principles is to remove the restriction that all partners must provide equal labour and other contributions, and so enable the full range of contributions that can help the commune/enterprise be successful.

tax-back flipping options - Providing communal share liquidity

Communal Equity Options (deposit options) are a useful tool for attracting partners to a commune since they allow option recipients to participate in the future growth of the commune with minimal financial risk.  This article is most useful if you have read deposit options and communal equity descriptions.

Another option variation that is generally useful can be called a tax back flip option.  Either the option buyer or the seller(s) can have the right to flip the shares immediately at a fixed taxed percentage between 10% and 50% of the profit from the option trade.  For general speculative stock options,  the net result is that the option seller keeps his stock (for cheaper than it would cost to buy it in market), and pays cash to the option buyer in order to settle the trade.  The advantage to a buyer that intends to flip the underlying stock, if exercised, is that he doesn't need to have the cash to buy the stock, and is saved the price risk of trying to resell it right away.  If the option seller is the one with the flipping rights, then the cost of the option will necessarily be lower than a regular option without tax back flipping rights.  For general stock options, a tax-back flipping right is only moderately useful, because almost the same results from the sellers perspective can be achieved by selling only half the options if the tax-back right is 50%.

In the context of communal equity principles, a tax back flip option is much more useful.  First, there are restrictions on preventing any entity from owning more than 1 share so this allows existing owners or option holders to acquire other options, and second it solves the issue of employees not having the capital to exercise their option without a secondary trading market to flip it themselves.

Recall that whenever a new partner joins the commune new cash is available from the buyer for the partners.  Under communal equity principles, a tax back flip option is a right of the option holder to intercept part of those funds as his option exercise.  For example, if a new 20th partner is about to join the commune at a communal equity value of 10M, and someone else has a communal equity deposit option with 3M strike price and  20% tax-back flipping rights,  then if the option holder exercises his flipping rights, the new partner pays 500k (1/20th of 20M); the communal partners receive (1/20th of (3M + 20% of 7M)) 220k, and the option holder receives 280k (80% of 7M).  From the communal partners perspective, the commune is less diluted than it would be if the option holder also joined, and they receive additional cash inflows.  So the most important benefit of all for tax-back flip options/rights is providing liquidity in communal shares that is regularly lacking in partnerships.

Because the tax-back flipping right is held by the option buyer, it doesn't lower the premium he is willing to pay for the option because it is an additional right.  As a generic rule, communal partners should be willing to immediately repurchase a share for 80% of what they just sold it for, because if they are not willing to do so,  the implication is that they are selling it for too much.  A 20% tax-back rate is also a sufficient general incentive for owners to seek maximizing the communal equity price sought from new partners.   Because the option buyer's right to flip back has no tangible inconvenience to the partners that issue the option, there is no reason to want higher option premiums from the buyer.  Its almost like a retailer offering to buy a brand new still-in-package item for 80% whenever it sells such an item.

Since the tax-back flipping right can be offered to an option buyer without affecting the value desired or payable of the option, at a 20% tax-back rate, the right can simply be offered to all option holders as well as communal partners.  Whenever a new partner buys into the partnership, the commune can simply set a 20% tax-back rate as a minimum, and hold an auction for all option holders and partners to bid up the transaction's tax-back rate.  Option holders are advantaged in this auction because the tax-back rate applies only to the difference between their option strike price and the new partner purchase amount, while the tax-back rate would apply to the entire transaction amount for existing partners.  Technically, the commune could also find the opportunity to re-auction the proceeds from the first auction at a 10% minimum tax back rate in case there is substantial pent up demand to liquidate communal partnership positions.  

For instance, in the first example on this page, a 10M communal equity transaction and 3M strike price option at a 20% tax back rate, yielded 220k to the partnership.  If the tax rate had been bid up to 30%, the partnership would receive 290k.  That 290k (5.8M equivalent communal equity) can be re-auctioned off at a starting bid tax-back rate of 10%.  If a partner took the opportunity to sell his share at 10% tax back, he would receive 271k (5.42M communal equity), while partnership received 29k but reduced the number of partners by one.  So, if the commune is truly worth the 10M a new partner was willing to pay for it, reducing the number of partners from 20 to 19 (as a result of the re-auction) is worth 26,315 to each partner (as compared to not offering the re-auction and keeping 290k being only worth 14,500 to each partner).

Liquidity in the shares of private companies and communes is typically the largest concern for investing in such enterprises.  The right to a tax-back cashing out option for owners and option holders as well as the original partnership abandonment right (restricted loans ("put" options) from partner contributions into the commune) provides some ease in leaving the commune.  Although partners leaving rarely improves the health of the commune, the ease of exit makes entering more appealing.  Its the same principle as retailers offering money back guarantees.  Its done to increase sales despite its costs.  

Communal equity principles prevent the most desperate shareholder/partner to sell his share below the median democratically set price by all partners.  The tax-back flipping right though basically achieves the same result. There is a transfer of share from one seller to one buyer, the seller receives the amount he was willing to sell for, the buyer pays the median communal equity setting, and the commune pockets the difference.  In the case of re-auctions the commune uses sales proceeds to buy out one partner and retiring the share without having to raise more funds.

Another more straightforward means for natural governed and financed communes to provide liquidity (the opportunity for partners to sell their share) is to vote on a purchase price (determined by median amount - similar process as selling shares, or a vote on accepting the best offer from an existing partner), and have a transaction contingent upon regular natural finance project funding being met with a reasonable interest cap.  Those partners capable and motivated in increasing their share of the commune can individually add significantly to the funding pool available for repurchases.  Even if the funding for share repurchases is uneven among partners, it is still a rational choice for one partner to fund it all if he believes communal equity will increase, as he would profit from the interest on funding as well as share price appreciation.

Deposit Options - A security to facilitate communes

When you make an accepted offer to purchase a home, it is customary to include a deposit upon acceptance, and you pay the remaining balance on the closing date of the purchase.  Typically, if you walk away from the purchase there are no legal repercussions other than the seller keeping both your deposit and his home.

I'm introducing the definition of a Deposit Option as a call option where the premium paid for the option is deducted from the strike price on exercise.  A regular call option is the right for the buyer to buy a security or property at a specified price before a specified date.  The price paid for a regular call option does not affect the amount due.  A deposit option is extremely similar to the good faith deposit when purchasing a home, except that it caries no obligation whatsoever to follow through and purchase the property.

A deposit option can have applications as long term publicly traded stock options as well.  If Company X's current share market price is $100, a deposit option to buy X for $150 in 2 years could be traded for say $20.  This gives the buyer the right to pay an additional $130 for the stock within 2 years.  The buyer of this option can resell it anytime as a regular call option with $130 strike price, since $130 is the break even point determining the buyer's choice to exercise the option.  There is a bi-directional convertibility between regular call options and deposit options, which I will only briefly mention that this means we can use standard option valuation models, and deposit options can offer the seller higher initial premiums for options "in or near the money".

My rationale for introducing the concept of a deposit option is in its use for making deposits on securities generally, but also allowing for renewable options and modifications to strike price.  Communal Equity Principles determine financial processes for equal partners to earn their equal share.  There is a distinction in rights between Senior Partners (those who have fully paid/earned their share) and Junior partners (those who have a contractual path to obtain senior partner status).  The concept of fostering junior partners is desirable primarily to encourage workers (without the capital to buy share outright) to work in the best interest of the commune and thus the best interest of their eventual equal share.

While the original "payment plan" described for junior partners was focused on potentially interest bearing loans on the unpaid balance of a fixed initial buying price, but there are several issues with that approach.  It can be too good of a deal to give junior partners today's buy-in price while giving them 10 years to pay it off. When new senior partners buy into the commune, they have the option of asking all partners to put some portion of the proceeds the new partner pays them back into the company.  Doing so, substantially benefits the junior partner's share because it increases the value of the company by the amount of proceeds invested in it.  There is also an issue of the junior partner potentially losing his share by losing his employment and potentially forced out for the purpose.

A better payment plan for Junior partners is deposit options.  Ones where the strike price adjusts based on capital (equity) inflows and dividends, and options that can be transferred/sold if desired or needed.  As options, they can be offered to any investor.  Not just workers.  But workers get the advantage of being paid enough to cover the option premium(s).

A Communal Equity Option is a deposit option to buy one equal share of a commune at a specified communal equity value by a specific time.  The striking difference between communal options and regular equity options is that the total number of shareholders and therefore price per share at the time of exercise is unknown.  The option strike price is based on the total value of the commune and divided by actual number of partners to determine share price.  They are implemented as deposit options.  The communal equity strike price is adjusted up for partner capital contributions and down for dividends paid out. The other striking novelty of a communal equity option is that the sellers are the communal partnership of owners in equal portion.  The option premium paid goes directly to owners in equal share.

Long term Communal Equity Options can be priced in installments.  This makes each installment an option to renew the option.  The obvious application of an option installment plan is for workers who lack capital but can be given a salary bonus that covers the option premiums.  Pricing for employee options must be model-based and based on the democratically set communal equity value, and with approval of preferably a natural finance comptroller or an elected options policy governor.

Another very useful application of Communal equity options is that of an angel investor role.  Having the option to buy a share of the company in the future, while paying a relatively small monthly option premium to the founders allows for founders to draw an equivalent to a salary in collected option premiums, and does so off-balance-sheet to the company, and thus doesn't saddle the startup with as much debt compared to an investment in the company followed by drawing salaries from the company.  For the angel investor, many smaller option premiums gives the opportunity to walk away if sufficient progress is not achieved.  Since angel investor options involve cash payments between parties (worker arrangements can involve accounting entries that create loans from premiums) there is no need to place any model or comptrollership limits on the amount of the premiums.

As an example angel investor scenario, A very early stage startup might have communal equity value of $50k.  An angel investor might be offered a 3M strike option with 5 year term for 2k per month in premium or 4M strike with 10 year term for 3k per month in premiums.  Conceptually, even both options can be offered on an either/or basis (only one can be exercised) for a premium of 3.1k per month.  The first option would give the angel investor the right to buy a share, with circumstances of say 5 years later there are 4 partners in the commune, for 600K less the options premiums paid (60 * 2k) of 120k = 480K.  So, buying a share is attractive to the Angel investor if he believes the commune is worth 2.4M or more.  The more partners there are at the time of the exercise, the more valuable the option is to the buyer because the cost of one share is smaller, but the deduction for paid premiums is the same regardless of the size of the partnership.  Attracting more partners to the commune is generally in the interest of existing partners as it both allows them to partially cash out, and brings additional resources to help make the commune grow.  Option premium installments have the advantage to the buyer of reducing the effective strike price with each installment, and the advantage to partners of providing steady cashflow.

Communal options are supplementary alternatives to the Junior partnership share that was intended for workers.  The Junior Partnership arrangement of buying a share with secured loan is still possible, but the encouraged arrangement is to offer communal options to employees, and let the employees exercise those options when appropriate with the commune lending them the additional purchase funds they need.  Thus turning a communal option into a junior partnership share.  The advantage to the employee is that his option is sellable/transferable, and the advantage to the commune is that the sales price can be estimated to be the value in 2 or 5 or 10 years rather than current equity value, and the paid in option premiums serve the function of a down payment (vested interest) on the junior partnership when exercised, and so a reasonable share of both risk and reward compared to senior partners.

The most important difference between a Junior partnership (part) share and a communal purchase option is that no voting authority occurs until the option is exercised.  Holding the option still provides an incentive for enhancing communal value, and unlike traditional stock options, the option holder is insulated from a high dividend payout policy.

An option does carry the risk to the buyer that it will expire worthless.  There might be an appearance of a slight bias in motivation by the partners to not be too successful.  Because a communal equity option is essentially renewable on every installment, there is a clear incentive for the partners to continue progress on the enterprise in order to continue enjoying receiving option premiums.  Even if there is a 3M option on the commune, attracting partners at a 10M valuation before the option is exercised, both lowers the cost of exercising the option to the buyer and reduces the share of the company given up by the existing partners.  So, if the true value of the commune is 10M and there are 19 partners, the optionholder can acquire a share for 150k (less premiums already paid) instead of 500k.  The 350k "lost" by doing too well is much less than the share value remaining and cashed out by the first few partners as a result of obtaining additional partners near 10M in communal equity buy-ins.

On a related note, before your startup grows to be worth $10M, it will at one point along the way be worth $3M, and $3.5M.  At that time, an option holder may very well want to exercise his option before it expires because 1.  It removes his obligation to keep paying option renewal premium installments, and 2.  He obtains voting rights, and 3. If he is hopeful about the prospects of the company, he can gain a much larger share of the company if he would be, say, the 5th  partner today instead of the 20th or 100th partner years from now when the option expires.  So 1/20th of 10M is 500k, and a 350k profit on the option, but buying 1/5th for 600k, would make that 5th worth 2M when company is worth 10M, and so 1.4M profit.

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A note about employee/management options in traditional corporate structures is that they have a corrupting influence as a result of no adjustments for dividends and share capital infusion.  AAPL for instance has over $65B in cash, and no real use for it.  But if it paid that cash as dividends, it would hurt those employees who have stock options even if the dividend would be in shareholder interests.  Though most share capital infusions tend to be made at a fair price, excessive management options can dilute shareholders and fellow option holders.  The significant harm of unadjusted options though is the dividend reluctance it causes management.  In the case of even successful companies such as AAPL, it makes it more likely that it will go bankrupt before paying back owners its current valuation.

There are also significant tax advantages to options in Canada and manywhere else.  Options have an electable treatment as to whether they are capital gains or income.  Thus partners can treat option premiums received them as capital reduction to their share value (only taxed when share is sold).  Angel investors can treat option premiums as an income expense, and though likely an un-recommendable stretch, employees could treat their paid option premiums as an offsetting employment expense.

communal equity accounting - large open partnerships

Egalitarian enterprise ownership provides a function similar to Natural Finance Comptrollership in that it controls hierarchical management power concentration.  A circle of equal partners has to be managed for the equal benefit of all the partners, and equality membership is the only effective way to enforce it.

In my last post, I discussed various ways to structure an equal partnership.    The most interesting of these options was one (3rd option) offering an equal partnership with equal low financial commitments amongst partners. This is a more formal analysis of that option where I will try to keep the more complex parts near the end.

The exciting aspect of allowing low buy-in egalitarian open membership/equity in a project is making projects accessible to both rich and poor members.  It can replace financing and ownership structure for most projects, but is specifically tailored for real estate projects/municipalities, multi-level marketing organizations, and volunteer charities or semi-volunteer organizations. 

Natural Finance provides a more flexible and cheaper financing alternative than the loan syndicate described in the original scenario.  Natural Finance uses queued priority open soft loans for financing where each investor is guaranteed to never be diluted by future obligations.  Queues exist (in order of payment priority) for unsecured loans, secured loans, deferred compensation, and purposeholder/"shareholder" dividend-equivalents.  An impartial comptroller is assigned to the organization to ensure funds flow through accounts as agreed, and to enforce all other agreements entered by the organization, and so facilitates partnerships in the organization by ensuring trust in it by its partners.

Another function Natural Finance Comptrollership provides is more flexible accounting options than standard GAAP.  GAAP procedures aim to portray an organization to outsiders as an estimate of its liquidation value.  While useful, a partnership with an open buy in price must use the principle of setting a buy in price which doesn't disadvantage anyone based on time of buy in.  So internal information must also be accounted.

Minimal investment partnerships within a natural financed organization may as well be labeled Natural Partnerships.  A natural partnership share has many similarities to standard corporate shares.  It is a share of paid up equity, a right to vote. a right to share in future profits, and is freely transferable.  Unlike a standard corporate share, it also has an obligation to pay its share of unfinanced obligations.  Because of this last feature, the shareholder has the right to abandon his share most likely to avoid paying such obligations.  There are thus 2 financial components to a natural partnership share.  A membership fee and a paid up capital amount.  The membership fee is the small buy in fee that can start an egalitarian organization.  The membership fee is forfeited if the share is abandoned.  Paid up capital is not forfeited however when abandoned, though share of future gains is forfeited.  Natural finance queues enable a distinction between returning past dues, and shares of future streams.

For almost all natural financed organizations, paid up capital of natural partners would be accumulated exclusively through paying back of lender principal.  Basically through accumulated profits.  In natural financed organizations any capital contributions made by partners are lent under the same terms available to general investors.  If, in the future of an organization, contributions from its partners must be raised as a last resort, then its likely the partners agree to make those contributions in the form of interest bearing loans rather than as capital contributions.

Deferring discussion on calculation of open partnership share value (called communal equity) for a moment, a new partner joining the organization, if he is the n-th partner,  owes 1/n-th of the partnership value to the other partners on top of the membership fee.  If the prospective partner is interested in joining mostly for employment income opportunities he can derive from the organization, then it is likely the organization is willing to negotiate with him to pay that amount with no interest, at a speed commensurate with his responsibilities.  If the prospective partner only has a financial interest in the partnership, then he is likely expected to pay the partnership's full entry price without any organizational concessions.  The motivation for a financial partner to invest in the partnership rather than through natural finance loans to the organization is usually in addition to natural finance loans.  Individuals may only purchase a single partnership share.  It grants them a vote and access to collaboration opportunities, and so can be supplementary to other financial stakeholdership in the organization.

Communal Accounting is a supplementary measure to GAAP accounting.  It does not prevent standard GAAP income statements and balance sheets.  An additional accumulated communal equity account is tracked which "capitalizes" most expenses of the organization that are permanent reflections of past member contributions to the firm.  The principle of communal equity is to record those expenses incurred by the first members in the buildup of the organization, so as to equalize contributions made by the first and last members.  Members joining now or 10 years from now should be indifferent to the joining dues.  Expenses that are not a personal benefit to communal members nor are part of the costs of goods produced for sale are presumed to build up communal equity (value).  For organizations that don't provide direct benefits to their members (such as housing, food etc...) then supplementary communal equity will be accumulated losses (with minor timing adjustments).

As analysis, consider an open communal owership of an art piece (soup can drawing) that is bought with a 100% vendor loan.  The only costs in maintaining it are insurance and interest on the loan.  Initial communal membership of one.    The vendor gets no cash, but will collect rent equivalent interest and avoided insurance costs, and holds the art as collateral.  The buyer hopes that the art will appreciate in value more than the interest and insurance costs.  The commune sets its risk to (almost) zero in allowing new members to join at the value of accumulated interest and insurance costs.  A partnership set at the time of purchase would always be set at this value.  Partners joining in the future, however, have the advantage of waiting to see if the art appreciates in value more than the buy-in costs.  Therefore, a markup percentage is appropriate on the buy in set price.  It can be set monthly or quarterly, and can be negative if market conditions demand so.  5% or 10% markup is considered naturally acceptable capital returns, and 5% will attract more partners than 10%.  Expressing it as a percentage markup is important for disclosure purposes, communal voting on setting the markup, and mathematical simplicity in rewarding each existing communal partner.  The value of soup can drawings, as any project venture, is highly subjective, and categorically impossible to predict.  A 5% markup will attract more members than a 10% markup.  At 5% annual interest and insurance costs, the open communal buy in price would increase by 1/n-th of 5.5% (with 10% markup) of the original asset value.

The above venture excludes valuing either the advantage of having possession and enjoyment of soup can drawings, and the revenue potential of charging a few cents to soup can drawing aficionado visitors.  Any revenues earned by visitation fees reduce the cost of partnership buy in provided they don't exceed the expenses.  Retained profit also increases buy-in price by increasing equity.  Ironically, both losses and undistributed profits increase share value by the same amount, while breaking even does not (to be contradicted later). An aside, but interesting alternative to the vendor selling to the buyer, is the for the vendor to form a communal partnership with the buyer.  The vendor gets to insure that insurance is up to date on the asset, and may continue to enjoy the possession privilege, and the buyer gets half the speculative ownership but half the risk (obligations to pay interest and insurance).  The buyer's ability to abandon the project returning the collateral is unaffected.  If the communal partnership grows to 1000 members, then the vendor will have succeeded in divesting 999/1000 of his interests while continuing to participate in the potential increase in market value, its insurance security, and potentially its viewing pleasure.

The paradox of an organization losing 100k per year being valued the same as one earning 100k is indeed nonsensical.  Net Present Value principles apply.  For presumably perpetual projects with aggressive market value based depreciation schedules for assets (as natural finance secured QCSLs demand), then an earnings multiple of 5-10 times over and above tangible equity is a fairer open buy-in price than accumulated communal equity.  Open buy-in price is the greater of the 2 values.  Tangible equity is essentially the liquidation value of an organization, and excludes intangible assets such as goodwill and brand image.  If intangible assets are a substantial value of the organization, then the multiple of earnings can be justified higher.  The importance is a formulaic buy-in price based on earnings and tangible equity.  Terminal value projects such as an oil well, gold mine, or drug patents have different valuation formulas.  They are also NPV based, but not discussed further at this time.

When the right to abandonment is invoked by a partner, the membership fee portion of his partnership share is forfeited to the organization.  Their share of communal equity is segregated into passive communal equity.  Passive communal equity is only returned to investors as distributions are made.  No profit is available on their shares.  If the organization requires future partner contributions, they are drawn proportionally from passive communal equity and active partners/communal equity.  Any distributions made to partners whether profit shares or results of the sale of the organization, are made to passive communal equity holders as well, but reduce the passive shareholder balance.  New partners buying into the communal partnership have their contributions distributed with passive communal equity counting as half of its proportion.  The rationale for reduced participation of passive equity members is that recruiting new members is an active action by the existing active partnership.

One major advantage of a communal partnership over standard corporate shareholding is that management abuse of shareholders by diluting equity is prevented.  The price of admission to the partnership through either markup of communal equity or earnings multiple above tangible equity can be set through a democratic average of partner desired amounts.  The structure makes it impossible to bribe one manager for preferential stock distribution, because each person is limited to one share, and a price is set for all buyers.  yes/no decisions by potential buyers of a fixed or formulaic price are still market based pricing of stock issues.

For most projects, the membership fee is expected to be $1000.  Membership fees become organization equity.  Each share would have a book value of at least $1000 because of this.  Consider an organization like General Motors with 1-10 million people affected by its operations including customers.  If such an organization formed as a communal partnership with 1m members, there is $1B in equity from membership fees alone.

A communal egalitarian partnership can have senior and junior partner divisions.  Junior partners are those who haven't fully paid up their partnership share yet, but are current with their negotiated payment schedule.  A partnership share can be split among a group, though no one can own more than a share.  Those partners with more financial resources than other partners can contribute additional funds through (natural finance) loans.

A communal egalitarian partnership can replace many natural finance comptrollership duties other than account control if the partnership is large enough (5+), as peer review/monitoring enforcing partner commitments to the partnership is likely serves investors as well.  A communal egalitarian partnership is more trustworthy to outsiders also because it allows outsiders to join it.