On November 7th, ASE joined with several other organizations to host “Go Ahead, Get Invested! An Evening of Conversation and Opportunities for Community Investing” The event took place at With Love Market & Café in South LA, which is an example of the kinds of businesses that thrive when their communities support them. Sometimes called “place based” or “impact” investing, the priority is always on small and innovative enterprises that can not get the attention of profit-focused banks or venture capitalists but meet demonstrated needs in the communities they serve. Many such businesses are social enterprises focused on addressing a social problem but some are just good people with a venture that isn’t a match for traditional investment methodologies.
Personally, I’ve been attracted to the ideal of community investing for many years. Publicly traded companies make up half the economy but they are soaking up most of our nation’s investment capital. The half of the economy that is small, local, community businesses are starved for capital even though they are creating the most jobs. Arguably, this is one reason for our dwindling middle class. So how does one move one’s money “from Wall Street to Main Street”? Since there is $34 Trillion in the stock market, just shifting a few percent into local communities could be a game changer for sustainable capitalism.
When Michael Schuman wrote Local Dollars Local Sense in 2012, promoting the use of investment clubs, local investment funds, community ownership, direct public offerings, local stock exchanges and crowdfunding, I was excited to participate. However, though random opportunities abound in Southern California, more sources of guidance and co-learning are needed to identify viable investment opportunities and build the flow of capital. This fuzzy picture of me was taken at a SlowMoney conference held in Vermont in 2013, which my whole family attended.
Enter two of the evening’s speakers, Jenny Kassan & Michelle Thimesch. Together they co-founded Angels of Main Street an on-line investment community with a focus on hosting webinars and meet ups to facilitate conversation and discovery. Michelle is also the CEO of Crowdfund MainStreet, which is certified equity crowd funding website focused on community investment opportunities.
For years, only “accredited investors”, who comprise less than 5% of the population, were allowed to make equity investments in a business unless the business belonged to a friend or family member. That law changed in 2016. Under Investment Crowdfunding rules, anyone over the age of 18 can now invest at least $2,200 every 12 months. Further, the Securities & Exchange Commission devised rules so that others can invest more based on a formula indexed to your income and net worth.<