Policies and Documents
Subvert Co-op is built on a foundation of transparency, democratic governance, and a clear set of rules that guide how the cooperative operates. These guiding principles are enshrined in key documents that lay the groundwork for both the platform and the co-op’s long-term success. Below, we’ll break down the primary policies and documents that form the backbone of Subvert.
View a Miro board illustrating how the Subvert Model works: https://miro.com/app/board/uXjVINCClaw=/?share_link_id=583388593923
Subvert Cooperative LCA
Subvert Co-op’s Bylaws (Drafted)
The Bylaws serve as the constitution of Subvert Co-op, outlining the core rules that govern its operations. Because they address fundamental aspects of how the cooperative functions, they are difficult to change, typically requiring a vote from the entire membership.
Key elements of the Bylaws include:
- Organizational structure and purpose: How Subvert is structured and what it aims to achieve.
- Membership qualifications and classes: Who can become a member and the different types of membership.
- Board of Directors structure and election procedures: How the leadership of the co-op is selected and functions.
- Voting rights and procedures: How members participate in decisions.
- High-level financial management principles: How the co-op manages its finances.
- Amendment procedures: The process for making changes to the Bylaws.
These components are foundational to Subvert’s identity and operation, providing stability and requiring significant member input for any changes.
Subvert Co-op Form of Member Agreement (Drafted)
The Member Agreement complements the Bylaws but is more flexible, covering the rights, responsibilities, and expectations of members in their day-to-day interactions with the cooperative. This document is designed to adapt more easily to changes in the platform or co-op operations, making it easier to keep up with evolving member needs or legal requirements.
Form of Member Agreement (Artist Member) ↗
Form of Member Agreement (Label Member) ↗
Form of Member Agreement (Supporter Member) ↗
Form of Member Agreement (Worker Member) ↗
Key contents of the Member Agreement:
- Detailed membership terms and conditions
- User activity definitions and reward structures
- Platform usage rules and guidelines
- Dispute resolution procedures
Unlike the Bylaws, changes to the Member Agreement don’t require a full membership vote, allowing the Board of Directors to update it as needed to keep things running smoothly.
Articles of Incorporation (Filed)
The Articles of Incorporation are the founding legal documents that established Subvert Cooperative LCA with the state of Colorado. These documents lay out the basic structure and purpose of the cooperative, as well as initial rules for membership. The Articles also address how artists, labels, and supporters can become members before the formal Bylaws were finalized.
Subvert Inc. PBC (Corporation)
Subvert Corporation is a Delaware Public Benefit Corporation serving as a holding company that is the legal owner of the platform's intellectual property, including its code, brand, trademarks, and other assets. It functions as Subvert's primary vehicle for value capture.
This entity exists to solve a key challenge for cooperative enterprises: access to capital. By structuring Subvert with both a co-op and a corporation, the organization can tap into traditional investment funding while maintaining collective control of the platform's operational decisions. The corporation can issue preferred shares to investors, providing the capital needed to build and scale the platform.
In this arrangement, 100% of the corporation's common (founding) shares are held by the Subvert Co-op. This means that while investors may provide capital by investing in the Corporation through preferred shares, operational control of day-to-day operations ultimately remains with the co-op's members.
One way to think of this is as if Subvert Corporation is a startup founded by a solo founder. But in this case, the "solo founder" is actually the Co-op—a container for potentially hundreds of thousands or even millions of members.
The corporation doesn't directly operate the platform—instead, it acts more like a holding company. The corporation licenses the platform to the co-op through a comprehensive development agreement, which grants the co-op exclusive rights to use, develop, and operate the platform.
Subvert Incorporated PBC Bylaws ↗
The Subvert Corporation Bylaws are the formal governing rules for Subvert's corporate entity, structured as a Delaware Public Benefit Corporation. These bylaws establish the operational framework, define leadership roles, and set governance procedures that guide the corporation's activities.
These bylaws are fairly standard, but unlike standard corporate bylaws that typically prioritize shareholder returns above all else, Subvert Corporation's bylaws balance financial objectives with its public benefit mission. They explicitly state the corporation's commitment to: (i) to establish artist-controlled platforms and services and (ii) to advance cooperative ownership of creative infrastructure.
The bylaws outline the structure of the Corporation's Board of Directors, including how directors are appointed and removed. They establish a unique composition where representatives from the Subvert Co-op hold significant board positions, ensuring the cooperative maintains substantial influence over corporate decisions. This creates a structural connection between the two entities that aligns their interests.
The document details shareholder rights, with specific provisions distinguishing between the common shares held by the Co-op and any preferred shares issued to investors. It establishes voting rights, information access, and dividend policies that protect the Co-op's controlling interest while still making investment attractive.
This document helps formalize the relationship between profit motives and cooperative principles and creates mechanisms of accountability to both investors and platform users, establishing guardrails that prevent the company from abandoning its core mission in pursuit of profit. This balanced approach represents a practical solution to the challenges of resourcing the capital-intensive process of building and growing platforms.
Subvert Platform
Subvert Platform Privacy Policy (Drafted)
Protecting member and user data is a top priority for Subvert, and the Privacy Policy outlines how the platform collects, uses, shares, and protects personal data.
Key elements of the Privacy Policy:
- Types of data collected (e.g., personal information, financial data, platform activity)
- Purposes for collecting and using data
- How data is shared with third parties
- Data retention practices
- User rights regarding their data (e.g., access, correction, deletion)
- Security measures to protect data
- Use of cookies and analytics tools
- How to contact Subvert about privacy concerns
This policy ensures users are informed about their data privacy rights and that Subvert remains compliant with data protection regulations.
Subvert Platform Terms of Use (Drafted)
The Terms of Use define the rules and guidelines for using Subvert’s platform. This document acts as a contract between the platform and its users, detailing how the platform operates and what is expected from users.
View: Terms of Use ↗
Key elements of the Terms of Use:
- User eligibility and account creation requirements
- Acceptable use policies and prohibited activities
- Content submission and licensing terms
- Payment terms and refund policies
- Platform functionality and service limitations
- Termination and account suspension conditions
- Disclaimer of warranties and limitation of liability
- Dispute resolution and governing law
As the platform evolves, these terms can be updated more frequently than the Bylaws or Member Agreement to reflect new features or legal requirements.
Intermediary Docs
In between the two entities are a set of agreements that outline how they work together.
Intellectual Property License and Services Agreement ↗
The Intellectual Property License and Services Agreement outlines how the Subvert Corporation grants the Subvert Co-op the right to use its intellectual property (the platform and brand). This document is essential to Subvert's dual-entity structure, serving as the bridge between ownership of the technology and its operation.
The agreement grants the co-op a worldwide, irrevocable, royalty-free license to use, reproduce, and distribute the corporation's IP. It specifies the co-op’s rights to develop and operate the platform while the corporation maintains ultimate ownership of the IP.
What makes this agreement unique is that it allows the value capture of the platform to live within the Corporation, while keeping the integrity of cooperative governance of the platform squarely within the Co-op’s domain. This document helps provide security that the co-op's right to use the platform can't be arbitrarily withdrawn.
Changing or updating this agreement requires approval from both the Co-op Board and the Corporation Board.
Assignment and Assumption Agreement ↗
The IP Assignment Agreement governs how new intellectual property created by the co-op is handled. It establishes that improvements, features, and other work created by the co-op are assigned to the corporation as "work made for hire," maintaining a clear ownership structure for Subvert’s intangible assets.
This document ensures that as the platform evolves, all intellectual property remains within the corporation, allowing the Corporation to remain the primary vehicle for enterprise value capture. The agreement also allows the co-op to retain the right to use these improvements through the licensing agreement.
Changing or updating this agreement requires approval from both the Co-op Board and the Corporation Board.
Investment Terms
SAFE (Simple Agreement for Future Equity) ↗
The SAFE (Simple Agreement for Future Equity) Note is an investment instrument used by Subvert Corporation to raise capital. Unlike traditional debt, a SAFE doesn't accrue interest or have a maturity date—instead, it converts to equity when certain triggering events occur, such as a priced funding round.
SAFE Notes allow Subvert to raise necessary funding before establishing a formal valuation, giving early investors the right to convert their investment into preferred shares of the corporation at a later date, in this case with no discount (and a $9M post-money valuation cap).
What makes Subvert's approach unique is that these investments are made in the corporation, not the co-op, protecting the co-op's governance of the platform’s day-to-day operations while still allowing for traditional startup financing. This balance helps solve the "capital conundrum" that often limits cooperative enterprises.
Investment Side Letter (Shared Earnings Agreement) ↗
The Side Letter is a supplementary agreement between Subvert Corporation and its investors that outlines additional terms and commitments not covered in the standard investment documents. This document helps both give optionality to the co-op's future fundraising and also provide protections and assurances to investors.
The document addresses a key challenge in Subvert's cooperative model: because a SAFE only converts into equity in the case of a future priced fundraising round, we wanted there to be an agreement that outlines an alternative way to compensate investors if the cooperative decides not to raise additional funding. What this agreement establishes is that if Subvert Corporation does not raise a priced funding round within 2 years, the company will begin making quarterly "Shared Earnings" payments as a percentage of net income until investors receive a 4x return on their investment.
What makes this Side Letter distinctive is how it preserves the cooperative's autonomy while still making investment attractive. By creating a debt-like repayment mechanism as an alternative to equity conversion, it gives Subvert more flexibility in its future fundraising decisions while ensuring investors have a clear path to returns. This balanced approach allows Subvert to access traditional investment capital without being forced into subsequent funding rounds that might compromise its cooperative principles or mission.
Other Docs
Decision Making Matrix ↗
The Decision-Making Matrix clarifies who has authority to make different types of decisions within Subvert's ecosystem. It maps various decision categories (financial, strategic, operational, etc.) to specific roles, bodies, or processes, creating transparency around how power is distributed.
The matrix distinguishes between decisions that require full member votes, Board approval, management discretion, or other processes like the Ownership Assembly. It outlines the thresholds and criteria that determine which pathway a decision must follow.