A Milestone For Oregon’s Community Public Offering

Amy Cortese | May 1, 2018


Judy Goodman has always been a trailblazer of sorts—you have to be, working as a research biologist, artist, yurt builder and chocolatier in the mountainous interiors of the Pacific Northwest, as she has. That rugged lifestyle—and many hours spent hiking, camping and skiing with her family— led to her latest venture: BGood Bars, which makes a line of all-natural energy bars based on her homemade recipes.

BGood Bars, based in Joseph, Oregon, was among the first businesses to make use of Oregon’s intrastate crowdfunding exemption to raise capital. And Goodman was the first entrepreneur in rural Wallowa County (pictured above) to go through the state’s accelerator course, which helps entrepreneurs hone their business plans and prepare to raise capital.

By the time her offering closed in April 2017, Goodman raised $20,000 from 23 Oregon residents via a local crowdfunding portal to help expand her young business—a modest sum, but enough to pay for new equipment, the bar codes required by larger retailers, and a stockpile of fair trade chocolate.

A year later, Goodman has marked another accomplishment: last week, she sent out her first checks to investors—the first returns to Oregon investors from any company under the three-year old intrastate law.

“It was a historical moment, and there wasn’t anyone here to witness it,” says Goodman, who works from a small kitchen next to the post office on Joseph’s main street. So she did what many do in today’s digitally connected age: she posted a photo on Twitter.

Goodman’s investor community, scattered across Oregon, cheered her on. “Proud to be a local investor in these MOST awesome, delicious, and healthy BGood Bars made in Oregon” tweeted Stephanie Fleming, president of Viri Group, a consulting firm in Portland, OR.

Unlike many businesses that raise money through crowdfunding, Goodman opted to offer a loan rather than equity, paying 3% interest over a five-year term. It’s a modest return, but “better than they’re getting at the bank,” she notes.

And local investors often have motives beyond simply financial returns.

Fleming, for one, invested $200 in BGood Bars after sampling the product at an event. “I’m picky about what I put in my body and also have gluten allergy. It can be challenging finding something that tastes good, is gluten-free, non-GMO and is truly healthy. BGood Bars meets this criteria and that first sample blew me away,’” she said.

Part of a Community

Fleming was also impressed with Goodman’s business savvy and values, the success of the business to date and her business plan. However, she says, “While those were important factors in my decision to invest, to be completely honest, I invested because I believed in Judy and I loved her product. I also really wanted to invest in rural Oregon business.”

While local investors like Fleming may not have the deep pockets of a venture capitalist or professional angel investors, they bring other qualities. Fleming, for example, buys BGood bars for herself and as gifts, and when she can’t find them, asks stores to carry them.

That’s led at least one popular store to add the bars to its inventory, according to Goodman.

Goodman’s investors range from people she knew from the community to complete strangers, who invested sums ranging from $100 to $2,500. Fleming was one of ten women to invest. “I really feel like I’m part of her community, that I’m important to her, and contributing in a positive way,” she says.

A Heavy Lift

Investment crowdfunding has made steady progress, but among states with intrastate laws, which permit only state residents to invest, traction has been uneven. Oregon’s crowdfunding exemption is considered one of the more successful examples, largely due to the efforts of tiny Hatch Innovation, a Portland-based nonprofit that initiated the law and built educational programs around it, such as the accelerator that Goodman participated in.

More than 25 businesses have raised money under the Oregon law, nicknamed the Community Public Offering, or CPO. Collectively, the businesses have raised nearly $500,000 to date.

Judy Goodman with her BGood bars (photo: Briena Sash)

Still, it hasn’t been easy. “This has been a real heavy lift to introduce an entire population to local investing,” said Amy Pearl, who as the head of Hatch Innovation helped shepherd the law into being, and also invested in BGood. “It’s like when women got the vote, and suffragettes had to go out and explain to other women what it meant to vote.”

There have been setbacks. Red Wagon Creamery, a popular ice cream maker run by a husband-and-wife team in Eugene, raised $120,000 in a CPO. Despite racking up impressive revenues, it closed down in April after expanding too quickly and hitting some road bumps—much to the dismay of its fans and investors.

That’s why the first returns are so encouraging.

“This is the first real opportunity for citizens to participate in their local economies by directly investing,” said Pearl, who recently left Hatch to join SeedPay, a blockchain-based community payments startup. “And these are the first inklings that it works.”

Related: Crowdfunding, Oregon Style.

How We Did It: Red Wagon Creamery

The Local Crowd: Building a Crowdfunding Ecosystem Across Rural America

Crowdfunding is especially beneficial for rural areas like Wallowa County, and for entrepreneurs like Goodman, who have had to make their own way. The financing was a comfortable amount to take on, says Goodman. And it has helped lay the groundwork for new opportunities, which she shares with investors in a monthly newsletter. Her products are now in 40 stores in the west, with a small but growing presence across the country.

Goodman has only made her first payment, notes Lisa Dawson, executive director of the Northeast Oregon Economic Development District, which includes Wallowa county. Still, “it’s really good to have a positive outcome here to start with, to have something that’s very visible,” says Dawson, who has held local investment workshops in the region. “For those who invested locally, it will make a big difference in how they look at other local investments.”

Photo of Wallowa Lake, Joseph Oregon by R.U.P.A.K – A.N.T.O ~~ Passing Time Follow (flickr)


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