Raising Capital

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For Main Street businesses with cash flow, revenue sharing agreements offer a flexible alternative to giving up equity stakes.

Ryan Flynn

Prototype

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Cook County's new Commission on Social Innovation will work with social entrepreneurs to address thorny urban challenges.

Anne Field

Slideshow

WANT TO INVEST LOCAL?
The stock market is off to a rocky start in 2016, with some pundits predicting 2008-style volatility. What if you could invest your money close to home, far from the Wall Street shenanigans, in businesses you know and trust? That's the idea behind locavesting. Thanks to new laws, there are more ways then ever to invest locally. Here are some new, and old, options.

Move over bears and bulls, there's a new beast in town! LIONs—short for Local Investing Opportunities Networks—are a kind of community-based investment group: think angel investors or microlenders with a hyper-local focus. The concept was pioneered by Port Townsend, WA residents in 2008, and has since spread to communities from New York to eastern Oregon.  

Crowdfunding is a great experiment in financial democratization, and states are its labs. To date, 30 states have passed laws that allow intrastate crowdfunding within their borders. The rules vary, but most allow companies based in the state to raise $1- $2 million in aggregate from residents, with less red tape than federal rules require. Watch this space!

Sustainable food & agriculture your thing? Check out Slow Money, a national non-profit that’s the investing equivalent of Slow Food. There’s an annual conference, but most of the action takes place in locally run networks, from Maine to Missouri, that are inspired by the movement. The groups make loans or investments to local food producers and farmers. Find one near you.

Regulation A is a securities exemption that's been on the books for decades. But in June 2015, an updated version (Title IV of the JOBS Act, but known more informally as Reg A+) went into effect, allowing companies to raise up to $50 million from the public in "mini IPOs." The first offerings are starting to hit, and expect to see a lot more.
Crowdfunding is about to go mainstream. Sure, there's Kickstarter for rewards. But as of May 16, when the Title III of the JOBS Act goes into effect, anyone will be able to invest in companies via crowdfunding portals. There are lots of rules, and limits on how much investors can invest, but this is a big step forward. For more info, see this and this and our crowdfunding guide.
For an easy, low risk way local investment, park some money with a Community Development Finance Institution (CDFI), a type of firm that caters to underserved families & entrepreneurs in a specific region. They can be banks, credit unions or loan funds. Also, KivaZip, RSF Social Finance and Calvert Foundation make it easy for anyone to make microloans to local or socially minded ventures.

A new world of investing is opening up, giving investors more freedom than ever to invest consciously. But investing—whether in the stock market or a local company–always involves risk. So do your homework and don't invest more than you can afford to lose. Most experts advise putting only a small portion into these alternatives. The content on this site is for information purposes only and is not intended to be financial advice.

Crowdfunding

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A proposed bill would allow investors to be grouped into 'special purpose vehicles,' alleviating a common complaint.

Locavesting Staff
JOBS-Act-Puzzle

Even before a key provision goes into effect in May, the JOBS Act is already changing the face of finance.

Locavesting Staff

Raising Capital

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Think investing in a DPO or crowdfunding offering mean illiquidity? There are more options than you may think.

Brian Beckon

In Action

A Lighthearted Intro to State Crowdfunding