🎉 2022 – a banner year for crowdfunding 🎉
V.2, N.13
The Standard & Poor’s index lost 18% of its value this year, and the tech-heavy NASDAQ lost 30%. All the more reason to start moving your money into the expanding universe of local alternatives.
Our lead story is the annual report for the SEC’s Office of the Advocate for Small Business Capital Formation. While the bad news is that access to capital continues to be one of the biggest barriers to entrepreneurial expansion and small business growth, the good news is the new regulations about crowdfunding are paying off. Here are some other highlights:
In 2021 nearly 1,500 companies raised $443.million via crowdfunding – a 20% increase over 2020. The average investment was $1,057.
These companies represented 216 counties, almost double the number from 2020. Zoom out a bit, and we can see crowdfunding actively occurring in 47 states. Companies in 15 states have successfully crowdfunded close to the $5 million maximum.
The belief that most of these companies are mostly high-tech is wrong. Two-thirds of the companies using investment crowdfunding represent mainstream businesses like restaurants and breweries.
Between June 2021 and June 2022, of the companies raising more than $1 million through crowdfunding, 41% were led by BIPOC entrepreneurs and 46% were led by women.
Those who claim that small businesses owners are “lifestyle” practitioners who have all the money they need are misguided Three quarters of all entrepreneurs are having trouble raising capital, and 89% of existing business owners say that capital is limiting their growth potential.
We’ve collected lots of other stories in this issue about crowdfunding at work, including one of the most successful niches in investment crowdfunding – solar energy development. Our other stories focus on how nonprofits in East Los Angeles teamed up to buy enough real estate to support 20 small businesses; the first returns the East Bay Permanent Real Estate Cooperative paid to its 350 local investors; and about how Cleveland is promoting circular economic development (thanks in part to the leadership of my Bard MBA faculty colleague, John Holm).
We wish you all a great 2023 and encourage you to consider the following New Year’s resolution: Move at least 1% of your money this coming year out of the imploding stock market and into your community.
– Michael Shuman, Publisher, The Main Street Journal
NEWS
Fiscal Year 2022 Annual Report, Office of the Advocate for Small Business Capital Formation (December 15)
Crowdfunding As A Source Of Capital, Sun Connect News (December 20)
Community Ownership Of Real Estate: A Los Angeles Story, Nonprofit Quarterly (December 21)
Investors In The East Bay Permanent Real Estate Cooperative Receive Their First Dividend Checks, Next City (December 20)
How Cleveland’s Circular Economy Programs Help Reduce Waste And Build Jobs, Next City (December 16)
PARTNER VOICES
Black Co-op Farms: Building A Worker Strategy In Mississippi, Nonprofit Quarterly (December 15)
2022 Year In Review, Cutting Edge Capital (December 20)
Advancing Global Food Security Through Fish Farming, The Kassan Group (December 5)
EVENTS
Lending to Cooperative Businesses – Webinar. Wednesday, January 18, 1pm ET. This webinar training will focus on how lenders can expand their reach into the employee-owned business sector, specifically worker cooperatives. This is a growing market for business transition financing, working capital loans, and other credit products. The session is presented by Shared Capital, with support from Project Equity. Register here.
Total Impact Summit 2023: Investing for People, Planet, and Place – In-Person Conference (30 South 17th Street Philadelphia, PA) Monday, May 1, 8am – Tuesday, May 2, 5:30pm. A two-day, dynamic event for individual investors, family offices, foundations, fund managers, and financial advisors to connect with aligned peers and partners, learn about proven and new investment tools, meet leaders of investable opportunities, and move toward action and investment. See FAQ here.
ICYMI
A Philly Coop Designed To Offer Work To Undocumented Folks Plans Expansion, Axios (December 7)
Milwaukee Community Land Trust Unveils First “Affordable Forever” House, Urban Milwaukee (December 8)
Corporations Are Incentivized To Keep Wages Low – Worker Coops Could Help, Fast Company (December 9)
In Flushing, Anti-Displacement Activists Fight An Uphill Battle, Next City (December 21)
JOBS BOARD
Fair Food Network is hiring a Director of Double Up Food Bucks Michigan.
Mission Driven Finance is hiring multiple positions.
BECOME A MAIN STREET CHAMPION
Have you always wanted to start a local investment club? A website of local investment offerings in your community? 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. Our goal is to identify dozens, then hundreds, then thousands of Main Street Champions like you across America. We already have Main Street Champions across the U.S., from San Luis Obispo, CA to Providence, RI, and even Australia! Together, we can move our hard-earned savings from Wall Street back into our communities. Fill out the intake survey below to join this growing cohort!
SOME OF MSJ’s VINTAGE ISSUES
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 a grant from the Heron Foundation. We welcome feedback about everything, from our design to content. And we welcome suggestions of other groups to involve as partners, and other information to include. Please send ideas to Sophia Leswing at sophia@main-street-journal.com.
PARTNERS
We welcome any nonprofit or for-profit committed to local investment as a partner. If your organization is interested, please contact Sophia Leswing at sophia@main-street-journal.com.