Laramie, Wyoming may not be the first place you would look for an innovative experiment in digital age economic revitalization. And at first glance, Diane Wolverton and Kim Vincent might not fit the image of change agents.
But the pair has been quietly building a crowdfunding ecosystem across rural America that is helping communities lift themselves up by their own bootstraps.
Wolverton and Vincent are cofounders of Laramie-based The Local Crowd (TLC), a hyper-local rewards-based crowdfunding platform that works with rural communities to create crowdfunding ecosystems that support growth and sustainability of local businesses. TLC provides the technology, training and hands on support, but the locally branded crowdfunding platforms are operated by—and for the benefit of —the local communities.
Since launching their first local platform in Laramie in 2015, Wolverton and Vincent have expanded into 15 communities in 13 states, from Butte, Montana to Monadnock, New Hampshire. To date, 35 campaigns have been conducted across the various TLC sites, raising a total of $150,000.
Local businesses typically seek small amounts of money on TLC—$5,000 to $7,000 on average. But this kind of grassroots crowdfunding provides vital seed capital, especially in rural areas where capital is scarce.
Energy Waiting to Happen
Back in 2012, Wolverton was working as director of Wyoming’s Small Business Development Center. Vincent had a business in downtown Laramie and was a consultant at the state’s Women’s Business Center. Those roles gave them both a firsthand look at the need for capital in struggling rural communities.
“We recognized and experienced firsthand the cry for more capital access,” says Wolverton. While Wyoming has natural beauty and other draws for businesses, it ranked last in access to capital in a recent state by state analysis.
When the JOBS Act was passed in 2012, the pair immediately saw the applications of this new funding tool as for rural communities as “an electronic barn-raising tool, where people in the community could help each other,” says Wolverton. “It was energy just waiting to happen.”
With grant money from the USDA, they created The Local Crowd in 2014. The underlying technology is licensed from Community Funded, a white label crowdfunding provider. “Their company, like ours, was founded on a deep appreciation for local economies and a desire to facilitate the spirit of community and access to capital for America’s rural businesses,” says Vincent.
It’s been a slow and painstaking process. “It takes a long time to build the culture and the ecosystem,” says Wolverton. That includes finding and training ambassadors in each community. “But when people get it, it works very, very well,” she adds.
Something else happens, too—what Wolverton and Vincent cheekily call Mega Community Collaboration, or MC2.
That was evident from the start. One of the first campaigns, by Serendipity Books, Antiques & Coffee Shop housed a former Masonic Lodge in downtown Evanston, Wyoming, needed to raise $6,000 to put in a new floor. In addition to donating funds, community members offered up their services—one person volunteered to install the floor, a big part of the overall project cost, while others offered to move furniture or haul trash to the dump. (That’s Serendipity co-owner Kayne Pyatt showing newly installed floor pictured above).
The mother and daughter team that own Serendipity were so grateful, they decided to pay it forward by donating their tip jar every month to a different local nonprofit. When an Evanston high school student launched a campaign to install a wheelchair accessible swing set, the contents of the tip jar went to her campaign. Getting into the spirit, the City of Evanston offered to do the installation and landscaping for the swing project.
The spontaneous community collaboration inspired Wolverton and Vincent to add a feature to the TLC platform that allows individuals or entities to offer what they call sponsored rewards. For example, when Cowgirl Yarn in Laramie wanted to transform its basement into a creative hub called the Fernwood Studio, community members offered hand knitted sweaters, gloves and other items as rewards, with proceeds going to the campaign. The sponsored rewards helped raise $7,872 from 106 supporters for the new studio.
Similarly, the TLC platform now includes an option for community members to offer nonfinancial support to
campaigns—a feature that grew out of Serendipity’s experience. In addition, the platform makes it easy for organizations to match funds contributed by individuals.
“Our communities have been our biggest teachers,” says Wolverton.
TLC charges each campaign a 5% fee, which is typical in the rewards-based crowdfunding world. Seventy-five percent of that goes to the local platform, with the remainder going to TLC. That way, says Wolverton, local platforms have a revenue model that can cover their annual subscription fee. “We charge them, but we show them a path to make that money back,” she says. “We are what Michael Shuman calls a pollinator.”
What’s next for the ladies of Laramie? Wolverton and Vincent are looking to expand their impact. They hope to have 150 communities in the TLC network in the three to five years. And they’re considering the broader continuum of funding needs for rural businesses. Rewards-based crowdfunding is helpful for small seed funding, but as businesses grow they continue to need capital. To that end, they’ve partnered with the micro-crowdlender Kiva to become a trustee. And they’re researching the idea of working with larger microlenders that underwrite loans of $50,000 or more.
And TLC’s activities will act as a complement to other initiatives, such as an intrastate crowdfunding exemption, dubbed Wyoming Invests Now (WIN), that is being considered in that state.
In the meantime, Wolverton and Vincent continue the slow and patient work of community building, one small town at a time.