Celebrate Local Investing in Takoma Park, MD on October 9!
V.2, N.32
On Monday, October 9, at 6 pm, local investment advocates will hold a special forum in Takoma Park, Maryland (Takoma Park Municipal Building, 7500 Maple Avenue), where I will unveil a new state, county, and local policy agenda. Below is a sneak preview. If you live in the DMV region, please join us. If you don’t, please share these ideas with your public officials.
This issue is filled with lots of other exciting news. Our top story is on the new State Stox NY Trading Market, which enables New Yorkers to invest in NY-based companies. According to Chip Daniels, founder of the exchange, "State Stox…. is the first and only platform dedicated to investors in a single state—filling a role that used to be occupied by regional stock exchanges. Additionally, it is the first U.S. trading platform to exclusively trade securities in the form of digital tokens that employ blockchain technology. State Stox plans to expand to other states in 2024."
You will also find articles on banking reform, employee ownership, a new black farmers fund, and land trusts. Every week, the field seems to be accelerating. But please don’t just read about it—use our listings to consider investing.
I hope to see many of you in Takoma Park on October 9!
- Michael H. Shuman, Publisher
A PLAN TO ACCELERATE LOCAL INVESTMENT IN MARYLAND
We will present the following action agenda to state, county, and local officials in Maryland gathered at the “Benefit Corporation Annual Forum” on October 9, 2023. Please share the agenda with elected officials wherever you live.
Locally owned businesses are responsible for 60-80% of the jobs in Maryland (depending on the definition of “local”). Compared to publicly traded companies, a large body of evidence shows that these businesses are significantly more important promoters of social equality, entrepreneurship, sustainability, smart growth, tourism, food justice, and democratic participation. Most are highly profitable and can contribute significantly to growing the state’s economy.
And—yet—local businesses receive almost none of the state residents’ investment dollars.
Instead, Marylanders’ long-term savings are in stocks, bonds, mutual funds, pension funds, and insurance funds that are almost entirely invested in publicly traded companies. Put another way, the state’s residents are systematically overinvesting in Wall Street securities and underinvesting in local businesses, the businesses most likely to improve state well-being. Disrupting this pattern by shifting even a small percentage of investment dollars from Wall Street to Main Street could have a huge positive impact on the state’s economic development.
Accomplishing this could be done through modest and low-cost interventions. The following could be done at all levels of government:
(1) Education – Educate residents about the virtues and possibilities of local investment, including the possibility of using tax-deferred savings for local investment through self-directed IRAs and solo 401ks. This could be done through economic development offices, community colleges, or grants to nonprofits.
(2) Mobilization – Identify and connect “Main Street” champions throughout the state who are prepared to organize small groups focused on local investment. In Port Townsend, Washington, a community of 10,000 residents formed a group called LION (the local investment opportunity network), bringing together local investors and businesses through monthly potlucks. The result has been nearly $1 million per year of new local investment since 2007.
(3) Web Listings – On every economic development resource website, post lists of local businesses currently looking for investment. This makes local investment opportunities easier to find. The Maryland Neighborhood Exchange, which has listed Baltimore businesses looking for crowdfunding investment since 2019—a project that has cost about $10,000 per year—has thus far helped 72 businesses (90% BIPOC owned) raise $3.8 million from 9,700 investors.
(4) Technical Assistance – Deploy experts in crowdfunding who can help coach local businesses on how to use the tool successfully. Today’s average successful investment crowdfunding business raises nearly $400,000—and yet it’s almost impossible to find any small-business support organization in Maryland with this expertise.
(5) Investment Funds – Create targeted investment funds for different priorities, such as local food, renewable energy, affordable housing, or small-scale manufacturing. Funds facilitate more investment by providing investors with diversification, liquidity, and professional management. Under an existing exemption in the Investment Company Act, a governmental jurisdiction might run the fund (or underwrite the fund’s operation), but most (or all) investment dollars can and should come from grassroots investors. They should be open to investment from non-accredited investors.
(6) Municipal Bonds – Issue municipal bonds to help seed investment funds. The largest community land trust in the country, in Burlington, Vermont, which provides affordable housing to several thousand families, was started by a municipal bond issued by Mayor Bernie Sanders in the 1980s. Most municipal bonds, however, are issued globally through investment banks. A better approach is to issue them in small denominations for local purchase. Connecticut recently issued $25 million of “micro-bonds” like this to support solar energy expansion—and it was bought out in 48 hours.
(7) State Networks – One way of lowering the legal costs of creating and administering funds and bond issues would be for the state to take the lead in raising capital, and counties or municipalities could then take the lead in awarding it.
(8) Tax Credit – Enacting a modest tax credit can help nudge residents to pay closer attention to local investment opportunities—effectively priming the pump. Michigan is preparing to pass a 50% income tax credit (up to $3,000 per resident), and there is no reason Maryland couldn’t do the same. The costs to the state, by the way, would be modest. Nova Scotia calculated that its tax credit for local investment funds generated jobs at a cost of about $500 per job. In contrast, Maryland’s bid for Amazon’s new HQ would have cost more than $500,000 per job.
(9) Local Banking – Shift governmental banking services to local banks and credit unions to boost support for local businesses. The probability of a dollar put on deposit in a local banking institution going into a local business is three times greater than a dollar deposited in a large interstate bank. Phoenix and Tucson have shown how to overcome the objection that smaller banking institutions cannot handle large clients.
(10) Public Banking – Create a public bank. The state of North Dakota has made more than $1 billion over the past century through its public bank. By depositing yet-to-be-expended public funds collected from taxpayers and the federal government in local banks and credit unions rather than global securities, North Dakota lowers costs, increases earnings, and supports local businesses.
(11) Trading Portals – The federal JOBS Act, which legalized investment crowdfunding, allows anyone to run a trading platform and charge a success fee (essential for successfully running the platform as a business). States like Maryland foolishly only allow broker-dealers to do this, which has effectively meant—no one is doing this. Maryland should create a pathway identical to the feds for residents to develop a platform that facilitates the trading of intra-state securities. This would help to greatly increase the use of Maryland’s $100 exemption (which was sponsored by Delegate Lorig Charkoudian).
(12) Discussion Groups – The SEC recently announced Rules 206 and 241, which permit small businesses to enter public “testing the waters” conversations with investors. All kinds of investment options, public and private, could be discussed. The problem is that the SEC did not preempt state laws that mainly prohibit such conversations. Maryland should harmonize its laws with these rules to facilitate more discussions of local investment.
These proposals have the following characteristics:
They are all high impact and low (or no) cost.
They provide mechanisms for the government to achieve more without raising taxes.
They are inexcusably absent from nearly all economic development activities in the state.
While most of these items could be done at all levels of government—local, county, and state—some make more sense at a certain level. For example, there’s a strong case that the state should create a tax credit, develop a statewide platform for small-bond issues, promote local and public banking, and legalize intrastate trading platforms. Montgomery County might open its Green Bank to local grassroots investors. And there’s a strong case for education, mobilization, and technical assistance to be done in local economic development offices. But the strongest case is to do as many of these as possible at every level possible.
NEWS
State Stox NY, Rings Opening Bell on a New Era in Stock Trading Enabling Local Investing, State Stox (September 15)
Stop Financing Fossil Fuels: 149 Climate Activists Arrested Blocking NY Federal Reserve, Hit Banks, Democracy Now (September 19)
Employee Ownership Trusts in the Social Care Sector, Employee Ownership Australia (September 18)
Mammoth Accounting ESOP Thrusts Professional Services Firms to Center Stage, Forbes (September 12)
The Black Farmer Fund Raises $11M to Change the Face of Agriculture, Essence (September 11)
In New York, Proposed Legislation Grants Opportunity to Tenants and Community Land Trusts to Purchase Land or Buildings, The Architect's Newspaper (September 8)
Why I’m Writing a Book About Taking Back the Banking System, Next City (August 29)
PARTNER VOICES
New Majority Capital Expands bETA Accelerator Nationally, New Majority Capital (September 18)
Upstart Scooter Company Challenges Big Guys on Safety and Equity, Superpowers for Good (September 14)
Solar For Us LLC Hits Investment Target on Raise Green's Climate Marketplace, Raise Green (September 8)
These Tucson Businesses Share the Wealth With Their Employees, Project Equity in Arizona Daily Star (September 2)
NEW INVESTMENT OPPORTUNITIES
Below is our list of recently posted local investment opportunities across the United States. Please note that our listing of these opportunities is not an endorsement, and remember that all investments are risky, so click on the hyperlinks and read carefully all the details before investing.
NOTABLE NEW RESOURCES
Fragile Neighborhoods: Repairing American Society, One Zip Code at a Time, Seth Kaplan (October 17)
EVENTS
Moose’s Corner: Innovations in Local Business Networks - Virtual Event. Join Michael Shuman (aka “the Moose”) and AMIBA for a monthly deep dive with the best local business networks in the United States. This month’s event—October 24 at 1 pm ET—focuses on the Sustainable Business Network of Massachusetts.
ImpactPHL Conversations - Virtual Event. October 4, at 12 pm ET. This discussion will focus on impact investment’s role in accelerating minority-led enterprises. Register here.
Bring Crowdfunding Knowledge to Your Small Business Support Organization - Virtual Event. October 10, at 2 pm ET. Crowdfund Better will provide a foundational knowledge of what crowdfunding is and how it can unlock funding for entrepreneurs, especially those not ready for bank lending or venture capital. Register here.
Celebrating a Milestone: Investment Crowdfunding Soars Beyond $2 Billion - Virtual Event. October 18, at 2 pm ET. Sherwood' Woodie” Neiss from Crowdfund Capital Advisors will share ten insights defining this milestone's significance. Register here.
43rd Annual E.F. Schumacher Lecture - In-Person Event. October 21, at 3 pm ET. Featuring co-founders of Rising Tide Capital, Alfa Demmellash and Alex Forrester. Register here.
DazzleCon 2023 - In-Person Event. October 20 - 21. Curated event for Zebras-aligned entrepreneurs, funders, or allied practitioners. Apply to attend.
Supecrowd Utah - In-Person Event. October 23. A dynamic one-day conference that unites investors and entrepreneurs on a mission to empower community builders, social entrepreneurs, and diverse founders. Register here.
Sell Your Food Business and Attract & Retain Employees - Virtual Event. October 23, at 1 pm ET. Learn how employee ownership could help you sell your company and attract and retain the best team in the food industry. Register here.
SOCAP23 - In-Person Event. October 23 - 25. An action-oriented gathering where investors, entrepreneurs, and social impact leaders come together to accelerate progress against the world’s toughest challenges through market-based solutions. Register here.
Neighborhood Economics - In-Person Event. February 26-28, 2024. Event facilitating ongoing conversations across geographies that help people build economic architecture so everyone will thrive. Register here.
Cleveland Park DC Rental - Available January 15 - June 15, 2024. 1500 sq ft. living space flushed with natural light; two bedrooms (one single, one double); lots of closets; separate study; 2.5 bathrooms; open first-floor plan with living room, dining room, kitchen, and sunroom; working wood fireplace; front yard with garden; sitting porch; fenced back yard; two off-street parking spots; washer/dryer; solar panels; basement storage. Asking $3,700/month inclusive of all utilities (heat, a/c, electric, water & wifi). The house is fully furnished. Pets ok. Please send questions to Wendy.
ICYMI
The Nation’s First Democratically-Governed Investment Fund Passes $1 Million Deployment Milestone, Ujima Fund
Every Trust, Everywhere, All at Once, Employee Ownership + Workplace Democracy
JOBS BOARD
Common Future is hiring for a Controller, VP of Impact Initiatives, and a Philanthropic Partnerships Director
Mission Driven Finance is hiring a Senior Investment Analyst, a Senior Director of Real Estate Asset Management, an Indigenous Futures Director, a Structured Finance Director, and a Construction Project Manager
Project Equity is hiring a Black Employee Ownership Initiative Program Manager
FREE SHORT VIDEOS ON LOCAL INVESTMENT
If you want short answers to your most pressing questions about local investment, we have prepared a series of 5-10-minute videos. Find them posted on our website under the “Local Investing Videos” page. Or click on the links below to be directed to videos based on the topic:
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. We aim 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 into our communities. Fill out the intake survey below to join this growing cohort!
CHAMPIONS BY STATE
AZ | CA | CO | DC | FL | GA | HI | IA | IL | IN | KY | LA | MD | MN | MI | MT | NC | NH | NE | NY | OH | OK | OR | PA | RI | SD | TX | VA | VT | WA | Australia | Belgium | Canada | India
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. Also, we welcome suggestions of other groups to involve as partners and additional information to include. Please send ideas to Jen Risley at jen@main-street-journal.com.
PARTNERS
Abrams+Angell | American Independent Business Alliance | Candide Group | Community-Vision Solutions, Benefit LLC | Council Fire | Crowdfund Better | Cutting Edge Capital | Democracy Collaborative | Exit to Community Collective | Fair Food Network | Impact Finance Center | ImpactPHL | Initiative for Local Capital | 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 Matters | Project Equity | Project for Public Spaces | Prospera Partners | Raise Green | Revalue | 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.