How can I respond to this?

I.e. same as now, except the company is a cooperative. There are many different conceivable options of course.

Don't be so naive, he used bank's money. Small entrepreneurs have great trouble getting enough capital to expand without loans. Also, if sulpurs value would not be exploited, anyone could just work in a factory for a few years and get enough capital to start his own business coop.

What if, as would be the case for most rightwingers, they don't consider it exploitation? Even if we use the dictionary definition, someone who earns a good wage and has good living standards wouldn't be exploited in the common definition. Obviously, in the marxist definition, it is exploitation, but that probably wouldn't matter to rightwingers.
Also should note the person I was arguing with isn't a wage slave and has a good wage, so arguing with him was probably pointless.

But where would they the money required to buy all materials? From the state? How would this change once communism is achieved?

They may try to find a loan. Maybe the state would have funds. Which is, again, precisely how it is now.

If a person doesn't consider slavery and serfdom exploitation, it isn't worth much, since it's an extremely fringe position.

My argument relies on slavery and serfdom being exploitation, to show that the case is the same with the hired labour. And it doesn't matter if he doesn't think anything wrong is with the latter.

no dude. From democratically controlled company - a coop. Even fukken bolsheviks used this model in agriculture.

So a coop would get money to build the things they need to build from another coop?

How do you respond to this?

The capitalist takes a risk of at worst becoming a prole while his workers take a risk of starving to death if the business fails.

What about economy of scale? Do porkies deserve all the money they get for balancing the dozens of businesses they have?