Gryphon Games & Comics Cooperative FAQ - The Short of It
Cooperative: an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
In the case of the Gryphon Cooperative, it is a collection of patrons and employees, known as members, who work together for the mutual benefit of the community.
The cooperative has a Board of Directors drawn from the membership. Members vote on the general direction of the coop, and the board is responsible for making that direction happen. Investor shares can be purchased by members for a 5% annual return.
Gryphon has encountered substantial financial difficulty, and faced with shutting down, the cooperative was adopted as the most responsible plan. The cooperative allows the community to become personally invested in the store, and ward off the ever changing challenges in our industry.
Gryphon encountered several set-backs in the move to our current location on Drake. While sales improved, they did not keep pace with debt. The current debt load is insurmountable without the sale of the business. The sale of Gryphon will allow the store to pay off the debt and be back in the black.
The current numbers for Gryphon work without the debt load. It is impossible to say that Gryphon will not fail in another year, but barring incident it should go reasonably well. There is a lot of investment from the community, and the store has substantial sales to support the current location and staff.
If the cooperative does not buy Gryphon, it will be dissolved, and the money returned to those who put in. There have been some legal fees associated with the cooperative, but the vast majority of the money that has been put into this venture is simply sitting in the bank, waiting to be invested back into the community and make things happen.
Immediately, money will be turned back into the business to make necessary improvements, then obvious improvements, and then it’s up to the community. As a community, it will be up to you to help decide when and if Gryphon changes in any substantial way.
Sherman will stay on as General Manager, Liana will transition away from her current duties in the store as others are able to take them over. Both will also serve on the Board of Directors, offering insights from years of experience and trying to maintain the culture of Gryphon.
If you want more details, read on!
Gryphon Games & Comics Cooperative FAQ - The Long of It
There are few simple answers in this part of the FAQ, but rather a deep dive into the questions that we’ve been asked many times since we announced the formation of the cooperative. I am happy to clarify anything that seems vague or that I failed to touch on, just let me know! - Sherman
Cooperative: an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise.
In the case of the Gryphon Cooperative, it is a collection of patrons and employees, known as members, who work together for the mutual benefit of the community.
Cooperatives can be set up in a variety of perfectly acceptable ways, there is no right answer and there was no template to follow for a business as unique as Gryphon as to how to make it work. What we adopted from inception was a combination of a Patron Cooperative (REI Sporting Goods) and a Worker Cooperative (New Belgium Brewery).
There are three types of members. Lion Members, our regular patrons who wish to have a say in the future of the store, with a $100 buy-in. These members are given perks in store (5% back on purchases, exclusive opportunities), votes for general store goals, and the ability to vote to place two Lion Members on the Board of Directors.
Eagle Members are a much higher level of membership, at $5,000. These members have the same perks as Lion Members, voting to place two Eagle Members on the board, plus a share of profits. These members are also required to work on the store in a minimal (5 hours a quarter) way. The goal is that these members, who are mostly professionals, will take leadership in seeing larger projects see fruition. Possibly setting up programs that will then be taken on by regular employees into the future. It is in their interest to see the business grow substantially.
Employee Members are all employees of Gryphon. Their membership is contingent on their employment at the store, and they are allowed some perks as well as a vote as to which one member of the staff is placed on the Board of Directors.
While membership is given votes on the general direction of the cooperative and overall planning, the Board of Directors is in charge of making more detailed decisions. They are not directly involved in the management of the store, but management is reporting to them. The Board consists of seven members, two Lion, two Eagle, one Employee, and two Founding Members. They are required to meet at least monthly to discuss and vote on issues that are important to the cooperative.
In addition, all members can purchase Investor Shares. These have a 5% annual return and are hwo the majority of the debt is going to be paid off during this purhcase. These Investor Shares will eventually be repurchased by the co-op, but that is years in the future.
Before Gryphon ran into financial trouble, a cooperative was considered as a longer term “exit strategy” for the business owners, myself (Sherman) and Liana. The overall view was that Gryphon is a business for the community to embrace and enjoy. Our initial mission statement from 2005 was all about creating a welcoming place for people to enjoy their hobbies. It seemed like a terrific way to turn the business over to the same people who had helped it grow.
Of course, that was more a retirement plan than a short term one. There are endless ways to restructure a business and save it. We could have sold it outright, brought on partners, asked for investors to take a profit share, or some combination of these. At the end of the day, we wanted to stay involved and continue to help grow this community.
From a very early age I was exposed to communal living arrangements and was no stranger to vastly different people working together to reach some consensus and make things happen. I believe that the Gryphon community sees the value in not only the store, but the different groups that make up our overall community. All these people contributing their part to make Gryphon happen. The store covers a swath of things, Games, Comics, Magic, Pokemon, Dungeons & Dragons, Coffee, etc. None of these things on their own would be enough to support a store like Gryphon, but pull it all together and it becomes a greater whole.
The once monthly comic clubs don’t need tables, chairs, and private rooms nearly as often as the Magic crowd, and yet, neither would be able to enjoy them without the financial investment these groups bring to the table. I think extrapolating that into discussions that involve the members of these groups to speak to one another, and figure out how to make things better for both, is one of the coolest opportunities that exist with a cooperative.
There’s another facet to the future of Gryphon I don’t get to talk about often, and that’s my visions for the future. I have huge ideas, bigger than what seems reasonable to discuss right now. No one who is involved in the cooperative today sees an opportunity to get rich. Not a single person reasonably expects this to become an amazing investment opportunity. However, they all see that Gryphon is something that is important to themselves as well as so many people in the community. Big, fun ideas that are cooler than they are practical is the purview of the cooperative model. It’s people getting together to make something happen that they think is worth doing, even if it’s not necessarily the best use of the time or money if money is the sole goal. I doubt most anyone in games or comics industry is in it just for the money after all...
So, I would love to see the Gryphon Cooperative tackle some of these things, and other things that I haven’t even imagined or heard yet. Make cool things happen because it’s worthwhile to make cool things happen. I wanted a medieval themed tavern before I ever even heard of Dungeons & Drafts. I’ve wanted to buy LARPing land and build a small town since before I moved to Colorado some twenty five years ago. I have a thought that a “nerd mall” with various shops and restaurants all under one roof, with cobblestone streets, medieval storefront facades, and a projected sky with the occasional gryphon flying over would be pretty sweet. None of this happens because it makes a lot of financial sense, but I think if enough people think something is cool and want it to happen, it will.
A cooperative gets people involved and allows us to crowdsource in a meaningful way. Crowdsourcing has become a “help me doing something cool”, but I think the best crowd sourced stuff is “let’s do something cool”, and then working together to make it happen.
When Gryphon Games & Comics was founded in 2005, Liana and I had just returned from vacation in New Zealand. We had $3,000 in debt, and jobs that were going to remove that quickly. We had been looking at places to move so that we could set up a life, and hopefully someday open a game store. When we found out there was one here in town for sale, and for a reasonable price, we jumped on it. We sourced her parents and our friends for the money to purchase the business.
From the day we found out the business was for sale, to the day we took over, was about three weeks. Liana was twenty-two and still in college at CSU. Neither of us had ever worked a day of retail in our lives. Neither of us were comic book readers. It was not a good plan, but we were committed to making it happen.
In the first four years we moved to a larger location, made huge strides in event attendance, and generally started to make some positive steps. Unfortunately, it was never enough. We were always behind on everything, trying to make payments to creditors, trying to keep product in, and working every day to see it through.
We arrived at the conclusion that if we weren’t going to make it work, we were going to have to make some changes. We gave ourselves a year to make it happen or bail out. We made substantial changes. We hired our first real employees, Kyle, James, and Tanisha. We eliminated frequent buyer program. The things finally started to flow. Having time to think allowed us to make changes and having rock-star employees made all the difference. Our sales climbed, and for the first time ever we were making a genuine profit.
A couple years after that, we found out that the comic book shop in Cheyenne was closing, and since Kyle was from there, it seemed like a terrific opportunity to open a second store. We did that, and even though the market didn’t work out like we expected (the comic shop moved and reopened essentially, a block from the location we found), Kyle was able to turn it into a profitable venture fairly quickly.
Somewhere in there, Liana and I decided we had life well in hand. We decided that even though we didn’t want to have kids, we had the time, and personalities, to help out some of the kids in our community. We started fostering high risk teens through the county. Something we’d continue to do for six years before ultimately adopting one. The kids we had were high intensity, needing a lot of our attention and emotional wherewithal to manage. Daily appointments for county check-ins, therapy, drug testing, family visits, etc were our new normal.
We had decided that we’d outgrown our retail space. We wanted something a little bigger (up from 3,000sq/ft to about 5,000sq/ft is what we were thinking. We wanted something more professional. Our College location wasn’t bad, but it had zero foot traffic, and our game room couldn’t be disguised as anything other than a warehouse. When we went shopping, we found our current location and it was a stretch. We’d be going all the way to 9,000sq/ft. It also had a functioning cafe, something we’d really wanted, but didn’t expect to find a place with a package deal like that. It was too much to pass up, even though it meant taking on a lot more risk, we felt we were up to the challenge.
This history is important because it illustrates how we overreached in all aspects. We thought we were cooler than we are. We thought we could handle high intensity foster kids, learn how to manage a cafe, and more than double our staff. We couldn’t. It was total mismanagement. It also illustrates how we’ve persevered through hardship previously. We had been in very tough spots multiple times throughout the history of Gryphon, and managed to pull it together. That unwillingness to give up paid off so many times, it was ultimately what made us dig so deeply before finally deciding it was time to find a new path.
There is a critical component here that also hurt us badly, but it wasn’t something we had experienced before. Our staff during the expansion were not equipped to handle their growing responsibilities. We didn’t realize it until far too late, with the distraction of the cafe, move, and foster kids unfortunately. We saw problems, we tried to address them, and but could not get on top of all of them with our personanal responsibilites with our foster kids. This caused us to lose some of our most valuable customers.
It was downhill from there. We’d lost some of our best customers, and while sales were up overall, they didn’t remotely keep up with our additional costs. There were substantial issues in the cafe as well, and no one capable of addressing those. We needed to hire a professional cafe manager, and we'd probably been ok, but we didn’t. We continued to do what we could, there was debt, but it wasn’t insurmountable. We sold the store in Cheyenne to even things out, but even that wasn’t enough. The hole we’d dug was too deep.
So we floated the idea of the Gryphon Cooperative to the community, and had enough interest to pursue it. So that’s where we’re at!
The elimination of debt is all that Gryphon needs to succeed. By selling the store to the cooperative for the cost of the debt, Gryphon gets another chance at life.
There are no guarantees of course. Maybe it all does fall apart. I believe in the community though. I think dedicated people can make anything happen.
That said, from a money standpoint, Gryphon works as is. Without the debt, the numbers are not terrible. We have bills, but they’re manageable. Gryphon is a million dollar store, easily in the top 10% of all stores of this type. It’s a lot of space, and a lot of staff, and a lot of opportunities.
The adage “it takes money to make money” is only clearer when you’re in the thick of it. We lose hundreds in sales every single day because of product we can’t afford to stock. Fix that, and you have a different store. That’s only the most obvious thing though… Right now, we’re having to pay bank fees for things like CODs for our orders. Banks have made a ton off of us.
Aside from obvious money, there is a larger issue in just hassle. For example, when an order is placed, and a payment fails, it might take half the day to get the messages around to get it handled and get an order out. When that happens, maybe that order that was supposed to arrive on Friday now arrives on Monday. Nothing that was supposed to be on shelves for the weekend is sold, and more importantly, customers who expected an order this week are getting it next week. These issues compound. Our customers want to support us. They want their money to stay local, but we have to be able to give reasonable service. Apologies can only get you so far. All of this is incredibly draining, not just financially, but mentally as well.
All in all, you eliminate these issues, and the store can quickly go from holding its own, to being profitable again!
If the cooperative does not buy Gryphon, it will be dissolved, and the money returned to those who put in. There have been some legal fees associated with the cooperative, but the vast majority of the money that has been put into this venture is simply sitting in the bank, waiting to be invested back into the community and make things happen.
At first, nothing happens once Gryphon turns into a cooperative. It’s the same store, it’s the same people working in it. The next thing that happens, things get a little better. The shelves get a little more stocked, orders are a little more timely, staff is a little less anxious, light bulbs get replaced, carpets get cleaned, etc. Another ten thousand dollars of inventory in the store fills in some obvious gaps, and that’s probably the biggest priority.
Once all this evens out, that’s when things start getting interesting. Once we get our store in a reasonable place, then options start to open. We can look at new product lines, we can look at starting new programs, investing in the facility and making it into a premium space, etc. There is no current plan for what happens at this point, but that’s where you come in. As a cooperative, everyone has the ability to present their ideas, and campaign for whatever you think the store should be, or can do. I have lots of ideas, but I frequently have people approach me with ideas that I’ve never even considered, but would love to see happen. Convince enough people, and we’ll all make it happen.
Liana and I have been the face of Gryphon since 2005. To many people, we are Gryphon. One reason we’ve adopted the cooperative model is because it gives us the ability to work hand-in-hand with the people who have been our customers for all these years. We totally understand people’s concern about whether or not we’re still involved.
For clarity, I will continue to be the general manager for the foreseeable future. That means I handle all the day to day for the store. Scheduling staff, game orders, and dealing with all issues that arise in store are my purview.
Liana will continue to manage some elements of the store for a short period of time, until she is confident that other people are able to take them over.
Both of us are on the Board of Directors for the Gryphon Cooperative. We are two of the seven seats on the Board, and we are more than happy to continue in that role well into the future. Even after well after I’ve left Gryphon as a daily job, I would love to be a part of the future, helping to maintain the culture and vision for the next generation of game and comic enthusiasts.
Q: How do I join?
Come into the store and set up your membership!
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