Great News! Venture Capital Is Having A Bad Year...

V.2, N.57

How healthy is the field of economic development today? One appalling sign is how many state, county, and city websites brag about the successes of venture capital (VC) investment in their jurisdictions. If you believe, as a mountain of evidence suggests, that locally owned businesses are the most critical foundation of a thriving regional economy, then any institutions that destroy or weaken local businesses should be purged. And VC is undeniably one of the worst offenders.

A short refresher course: VCs are creatures of deep-pocket investors who want to generate spectacular returns. VC funds purchase control of 10-20 businesses, invest heavily in their rapid growth, take a few public, and unplug the rest. The winners, which become publicly traded, almost always desert the community where they originated. Then, the losers, the beneficiaries of years of local sweat equity, are squashed. Either way, communities lose.

Our lead article, from Kingscrowd, reports on how VC funds have languished since 2021. Regulation crowdfunding, in contrast, has expanded significantly. “Reg CF is expected to finish [2024] at 4.4x its 2018 investment dollar volume, while VC is projected to reach only 1.3x its 2018 value.” Put another way, local investment is catching up. It has a long way to go, but we should be cheering about this modest progress.

Other stories you will find in this issue:

• The threat to Main Street is now less VC and more PE—private equity. The Institute for Local Self-Reliance documents how “private equity firms are rolling up optometrists, accounting firms, daycare centers, eldercare services, car washes, and bowling alleys.” ‘Rolling up’ means consolidating, reducing competition, and often destroying good businesses with unmanageable levels of debt.

• Steve Dubb at the Nonprofit Quarterly has an excellent piece describing two of the most innovative co-ops in the country: “the Industrial Commons, a textile manufacturing network based in North Carolina; and Obran, a worker co-op holding company based in Baltimore.”

• Four other innovative cooperatives—the Community Purchasing Alliance Cooperative in Washington, DC; Commongrounds Cooperative in Traverse City, MI; Red Emma’s Cooperative in Baltimore, MD; and Montana Cooperative Development Center in Great Falls—each received special recognition and support from the National Cooperative Bank.

• Across the pond, in the United Kingdom, six percent of UK business transfers are converted into employee ownership trusts.

• And finally, we have a feel-good story about how local cheesemakers in Vermont are saving the dairy industry there.

If you like what you’re reading, please upgrade to paid—and get the MSJ Extra! It will cost you about a latte a month and generate twice as much energy.

- Michael Shuman, Publisher

NEWS

• Reg CF Outpaces Venture Capital Growth, Kingscrowd (September 23)

• Private Equity is Rolling Up Main Street, Institute for Local Self-Reliance (September 23)

• Creating a National Worker Cooperative Holding Company, Nonprofit Quarterly (September 25)

• Innovation Awards Go to Purchasing, Real Estate, Restaurant, and Economic Development Cooperatives, National Cooperative Bank (September 24)

• Six Percent of UK Business Transfers Are Now to Employee Ownership Trusts, National Center for Employee Ownership (September 25)

• Vermont Cheesemaker’s Local Multiplier Effect, Civil Eats (September 4)

Jump to a Section:

✔️ News from NC3

✔️ Partner News & Voices

✔️ Events

✔️ Jobs Board

✔️ Asks

WHAT YOU MISSED IN THE LAST MSJ EXTRA!

SPONSOR CORNER

The National Coalition for Community Capital (NC3) is dedicated to educating, advocating, and activating community capital—and serves as MSJ's fiscal sponsor. Thank you for being a part of a growing movement! Contact NC3 for support integrating local investing in your work: info@nc3now.org.

NC3 UPDATES AND ANNOUNCEMENTS

The Community Capital movement stretches through the fields of law to financial planning to community development, and all these areas and more are represented in NC3's Practitioner's Directory. If you practice community capital in your field, consider joining this group—a benefit of being a member of NC3. We meet every other month to connect and further the movement. We meet today, and our next meeting will be in December.

NC3's Economic Recovery Corps Fellow, Sydney Davis, is hosting a stakeholder gathering in Michigan next Tuesday. The group is coming together to hear about and give feedback on the Community Capital Curriculum Sydney has been putting together for Entrepreneurial Support Organizations (ESO). The curriculum will support ESOs across Michigan in educating their entrepreneurs to realize and engage with opportunities available with community capital. ESOs serving underserved entrepreneurs will have free access to the curriculum.

PARTNER NEWS & VOICES

• Mission Driven Finance Seeks to Help New Impact Managers, ImpactAlpha (September 24)

• Expanding ESOPs Campaign Launches, Project Equity (September 24)

• How a Dallas Housing Coalition Won Bonds for Affordable Housing, Shelterforce (September 19)

NEW INVESTMENT OPPORTUNITIES

Our complete list of recently posted investment opportunities has moved to MSJ Extra! As a teaser, here is an offering from our list. (Please note that our listing of these opportunities is not an endorsement. Remember that all investments are risky, so click on the hyperlinks and read all the details carefully before investing.)

• Brooklyn Grocery Cooperative (Portland, OR) - Honeycomb Credit: A hub for Pacific Northwest farmers, producers, and distributors, and an accessible marketplace for area residents to purchase fresh, unique, and consciously grown food.

NOTABLE NEW RESOURCES

• Reimagining Cities: Disrupting the Urban Doom Loop, Cushman & Wakefield (September 20)

MSJ EVENTS

• Community Capital Live: Jay Nwachu of Ignite Capital - Virtual Event: October 23, at 2 pm ET

MORE EVENTS

• Local Investing Workshop with Michael Shuman - Virtual Event: October 15, at 6 pm ET

• FOOD FUNDED 2024: Regenerate - In-Person Event (Berkeley, CA): October 15

• Remaking the Economy: Co-op Ownership of Mobile Home Communities - Virtual Event: October 16, at 2 pm ET

• Regulated Investment Crowdfunding Summit 2024 - In-Person Event (Washington, DC): October 22 - 23

• The Transformative Potential of the Growing Community Wealth Building Movement - Virtual Event: October 29, at 1 pm ET

• Slow Money: A Call to Farms - In-Person Event (Providence, RI): November 13 - 14

• Small Business Anti-Displacement Network: Summit on Community Ownership - Virtual Event: November 14

JOBS BOARD

• Center for Economic Democracy: Policy and Research Director

• Common Future: Chief Operating Officer and Fundraising Relationship Specialist

• East Bay Permanent Real Estate Cooperative: Real Estate & Finance Analyst

• Fair Food Network: Investment Manager

• Institute for Local Self-Reliance: Associate Director of Development

• Partnership for Southern Equity: Just Opportunity Manager

• Project Equity: Content Manager

ASKS

If you or your community has a project on local investment or local economies that needs help, please let us know. We invite our readers to assist each other.

• From Kevin Jones, Neighborhood Economics: Want to help with Hurricane Helene relief to one of the hardest hit communities in Western North Carolina that the local government has neglected? You can help by donating to this gofundme to create a microgrid at the Swannanoa Library to provide power for a neglected, unincorporated part of the county during the next power outage. Our unincorporated and poor part of the county has no representative when the Buncombe County of Mayors meets every Monday, so we are not thought of in the first coordinated efforts of relief, like water distribution or restoration of cell service, even though the Washington Post acknowledges we were the hardest hit area. Unsurprisingly, the four water distribution sites were in areas with mayors who had a voice.

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BECOME A MAIN STREET CHAMPION

Have you always wanted to start a local investment club, a website listing local investment offerings in your community, or a local investment study group?

Whatever your interest or ambition, we invite you to “go public” to help others in your region find you, scheme with you, and start a local investment movement in your community. We aim to identify dozens, then hundreds, then thousands of Main Street Champions like you in every corner of the globe. Together, we can move our hard-earned savings from Wall Street to Main Street into our own communities. Fill out the intake survey below to join this growing cohort!

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About The Main Street Journal

The Main Street Journal aims to catalyze the movement of $50 trillion from Wall Street to Main Street to facilitate economic development and economic justice. It’s sponsored by the National Coalition for Community Capital, with grants from the Heron Foundation, Wallace Global Foundation, and the Bondi Foundation. We welcome feedback about everything, from our design to content. Please send ideas to Jen Risley at jen@main-street-journal.com. 

Our Team:

• Michael Shuman – Publisher

• Jen Risley - Editor

• Wendy Wasserman - Strategic Advisor

PARTNERS

Abrams+Angell | American Independent Business Alliance | Candide Group | Capital for Change | Capital Institute | Community-Vision Solutions | Council Fire | Crowdfund Better | Crowdfund Capital Advisors | Democracy Collaborative | Exit to Community Collective | Fair Food Network | Impact Finance Center | ImpactPHL | Initiative for Local Capital | Institute for Local Self-Reliance | The Kassan Group | Mission Driven Finance | National Coalition for Community Capital | Natural Investments | Neighborhood Associates | Neighborhood Economics | New Majority Capital | Next Egg | Nonprofit Quarterly | Ownership America | Ownership Capital Lab | Ownership Matters | Partnership for Southern Equity | PathLight Law | Project Equity | Project for Public Spaces | Prospera Partners | Raise Green | Revalue | Rising Tide Capital | Schumacher Center for a New Economics | Shelterforce | Slow Money | SOCAP | Sun Valley Institute for Resilience | The Super Crowd Inc. | Transform Finance | Uwharrie Bank | Village Well | Zebras Unite

We welcome any nonprofit or for-profit committed to local investment as a partner. If your organization is interested, please contact Jen Risley at jen@main-street-journal.com.