Support the "Expanding Access to Capital Act"

V.2, N.43

If there’s one thing as constant as gravity, it’s the short-sightedness of our top securities regulators. The North American Securities Administrators Association recently wrote a letter urging Congress to vote down the pending “Expanding Access to Capital Act,” which would reform and update federal investment crowdfunding law. 

Kudos to Sherwood Neiss of Crowdfund Capital Advisors for writing a forceful rebuttal to their letter, which is the first link you’ll find under “News.”

Neiss, a Main Street Journal partner, was one of the crucial figures behind the formation and passage of the JOBS Act in 2012, which legalized investment crowdfunding. The “Expanding Access to Capital Act” would, among other things, make the following helpful changes:

• Permit microfunds to use investment crowdfunding. (This is potentially huge!)

• Allow companies to raise as much as $10 million in a year (the cap is currently $5 million).

• Increase the amount individuals can invest per year.

Neiss skillfully shows that regulators have been consistently wrong about investment crowdfunding—and consistently opposed to the democratization of investment generally. For example, their predictions of rampant fraud back in 2012 have been proven wrong. Of the over 8,000 securities offerings, there has been exactly one case of fraud.

Some of the other other important facts that Neiss shares:

• 41.7% of the offerings in 2023 came from women and people of color founders. (The comparative number for venture capital is under 2%.)

• Crowdfunding has supported the creation of 310,000 jobs, contributing $6.8 billion to the economy.

• Only 17.8% of the companies using investment crowdfunding have gone out of business over the past five years. (The comparable rate for startups overall is 50%.)

• Successful crowdfunding companies nearly tripled their revenues the year after raising capital.

Other things you’ll find in this week's MSJ:

• A smart analysis of the evolution of public banking in New Jersey—and how to accelerate progress.

• A commentary on “The Barber of Little Rock,” an Academy Award-nominated short about a hair-cutter who set up a grassroots community loan program.

• A “roadmap” from the Maven Collaborative in Philadelphia on how to dismantle structural barriers to racial inequality.

• A great example of how to fix racial inequality through “predistribution,” which Connecticut is implementing by giving every baby a bond that will grow, mature, and become accessible as the baby becomes an adult.

• A deeper description of the problem—and opportunity—of repurposing the 100,000 churches across America likely to close over the next decade.

If these stories just whet your appetite for more, please subscribe to our paid edition, the MSJ Extra!, through this handy link.

~ Michael Shuman, Publisher

NEWS

• Support for the Expanding Access to Capital Act, Crowdfund Capital Advisors (February 21)

• New Jersey’s Excursion into Public Banking, ScheerPost (March 8)

• The Barber — and Banker — of Little Rock, Marketplace (March 7)

• Bridging the Public-Private Funding Gap, Next City (February 24)

• Baby Bonds Are Finally Seeing Some Momentum, Time Magazine (February 1)

• Time to Be Proactive About Church Property Transitions, Next City (February 21)

WHAT YOU MISSED IN LAST WEEK’S MSJ EXTRA!

Chris Miller’s name might not be familiar, but you probably know his work. Chris led the effort to legalize local investment in Michigan—the fourth state to do so. Recently, he urged the state legislature to pass a 50% tax credit for investing in local businesses. And he is one of the founding members and Board chair of the National Coalition for Community Capital (NC3), where he is deeply involved in efforts to promote Diversified Community Investment Funds.  

MS: Chris, what inspired you to develop and promote the Michigan Invests Locally Exemption (MILE) Act in 2013?  

CM: Like the rest of the NC3 founding board members, I was (and am) passionate about my community and was seeking to improve the community where I lived in southeast Michigan and, through innovation, other communities. I was enabled to do this work through the writings of a couple of folks: Amy Cortese and a guy named Michael Shuman! I owe a lot to both of them.

MS: You’re very generous–thank you! But let me follow up and ask if the MILE Act is still being used? And if so, by whom?  

CM: It is still being used! In fact, when I recently visited Michigan’s Upper Peninsula, I met some folks at a food cooperative in a financially depressed part of the region who had just used the law to raise funds for a new building in a much better location. The food co-op raised almost a million dollars in investment funds from grassroots Michiganders! It was amazing and inspiring.

SPONSOR CORNER

The National Coalition for Community Capital (NC3) is dedicated to educating, advocating, and activating community capital. The Main Street Journal's Publisher, Michael Shuman, was a founding member of the organization in 2017. NC3 has been MSJ's fiscal sponsor since it began, and with a new Executive Director and an opportunity to reimagine NC3 communications, NC3 will no longer publish its own monthly newsletter but instead work with MSJ to share the conversations, actions, and resources of community capital from around the nation.

What does this mean? NC3 will hold space in each bi-weekly MSJ newsletter moving forward, sharing updates and announcements of community capital and ways for you to engage. Thank you for being a part of a growing movement—we can't wait to connect with you and hope you will take the first step of joining our membership. All new and existing members are welcome and encouraged to reach out at any point to schedule a conversation with us—simply email info@nc3now.org.

NC3 UPDATES AND ANNOUNCEMENTS

Diversified Community Investment Funds (DCIFs): We are working with two communities to establish DCIFs for housing and local businesses. In Detroit, MI, legal documents are nearly complete, and we anticipate the community capital raise to get underway this year. In Cincinnati, OH, the coalition leading the effort has secured riverfront property for the project and we expect their community capital raise will begin soon as well.

Neighborhood Economics Conference: NC3 presented at the Conference in San Antonio, TX, last month with David Palmer (Detroit), and Derek Peebles (Cincinnati), who talked about their DCIF projects alongside NC3 founding Board members Michael Shuman, Brian Beckon, and Chris Miller.

PARTNER NEWS & VOICES

• Grubstake is Back and Open to the Public, Revalue (March 11)

• Big Developer Opens Offering to Small Investors, Superpowers for Good (March 7)

• Due Diligence AI Prompt Tool for Investment Crowdfunding, Superpowers for Good (March 6)

• Exit Planners and Financial Advisors Can Now Earn CE Credit, Project Equity (March 5)

• Indigenous Futures Fund, Mission Driven Finance (March 1)

• W.E.B. Du Bois, Champion of Community Economics, Schumacher Center For New Economics (February 27)

• Every Dollar that Stays Close to Home Matters, American Independent Business Alliance (February 24)

• The Money Map, Capital Innovation Lab (February 13)

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, and remember that all investments are risky, so click on the hyperlinks and read all the details carefully before investing.)

• BlocPower Energy Services (Brooklyn, NY), Raise Green: Supports energy efficiency, electrification, and renewable energy projects through no-money-down system leasing for building owners.

LOCAL ECONOMY FUNDS HIGHLIGHT

• San Antonio’s ESTAR West Targets $25 Million for Real Estate Fund, ImpactAlpha (March 1)

NOTABLE NEW RESOURCES

• Heatmap of U.S. ESOPs, National Center for Employee Ownership (March 1)

• The ABCs of the New Economy, Stir to Action (February 1)

EVENTS

• SuperCrowdBaltimore - In-Person Event (Baltimore, MD). March 21. Register here.

• Works For All: Cincinnati's Co-op Economy - Virtual Event. March 29-31. Register here.

• Move Your Money Month - April 1 - 30. Sign-on here.

• Investment Crowdfunding Demystified - Virtual Event. April 23, at 2 pm ET. Register here.

ICYMI

• Michael Shuman Interview, Million Dollar Stories with Mike Fallat

• Local Economy Films List, Appropedia

• Banking and Antitrust, The Yale Law Journal

JOBS BOARD

• Just Economy Institute: Fellows

• Mission Driven Finance: Fund Services Manager, Investor Relations Director, and Senior Data and Analytics Engineer

IF YOU LIKE THE MAIN STREET JOURNAL…

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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 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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SOME OF MSJ’s VINTAGE ISSUES

• What is the Cost of NOT Investing in Distressed Neighborhoods?

• Does Your Community Want Its Own Home-Grown Investment Fund?

• Crowdfunding Is Working for Women and Minority Entrepreneurs

• 36,000 Funds or Bust! 💥

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. 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. 

Our Team:

• Michael Shuman – Publisher

• Jen Risley - Editor

• Jessica Landman - Strategic Advisor

PARTNERS

Abrams+Angell | American Independent Business Alliance | Candide Group | 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 Matters | Partnership for Southern Equity | PathLight Law | 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.