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Date: 2025-02-13 Page is: DBtxt003.php txt00006125

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Group ... Impact Investing Forum

Discussion ... Crowdfunding and Investment Clubs

Burgess COMMENTARY

Peter Burgess

Impact Investing Forum Impact Investing Forum 8,821 members Tom Emerson Follow Tom Crowdfunding and Investment Clubs


Tom Emerson VP, CitiTrust, Private Bank I am intrigued by the idea of partnering socially / environmentally based Crowdfunding with investment clubs focused on community (30 mile or so radius) impact investing. The CF intermediary interviews and vets prospective businesses and entrepreneurs for their financials and impact on the community. Individuals interested in learning about and participating in impact investing, but lacking knowledge and fearing risk, mitigate these concerns by becoming IC members, and so share research, strategies, insights, education, knowledge, etc...The investments made would be determined by the group's bylaws, but would be consensus based. Definitely some important SEC and other regulatory hurdles to address, but I like the idea of a group of small investors being able to positively impact their own community. http://impactinvestinglux.wordpress.com/ Unlike Comment (21) Unfollow Reply Privately2 months ago
Comments You, Sulexan Chery and 12 others like this 21 comments
Michael Van Patten Michael Michael Van Patten Founder & President, Mission Markets Inc. Tom, what you will see is a new form of 'Community Bank' where the ciitizen investors become the new bank for local businesses. Additionally you will see community investment COOPS form. My company Mission Markets is in the midst of this shift in new funding paradigm. Unlike Reply privately Flag as inappropriate 2 months ago Leo V. Quigley, Peter Burgess and 1 other like this
Dave Newton Dave Dave Newton Senior Partner at Corporate Impact - Specialists in Sustainable Communities and Stakeholder Engagement I think this area is really interesting and we'll see a lot of new forms of hyper-local social investment developing over the next few years. I also think there's a lot of space for these concepts to evolve. For example, depending on levels of individual trust, couldn't individual angel investors simply meet to share information and develop working practices before deciding on their individual investments? This could then lead to forming an actual social IC but by that point it would feel less risky. My area of particular interest is how seriously would the social impact aspect be treated? Would local investors fall into their comfort zone of financial performance once some 'generally doing good' social criteria has been met? Unlike Reply privately Flag as inappropriate 2 months ago Kevin Doyle Jones, Peter Burgess and 1 other like this
Peter Burgess Peter Burgess Founder/CEO at TrueValueMetrics developing Multi Dimension Impact Accounting Clearly, there is a growing dissatisfaction with globalization and the social and economic domination of impersonal big organizations. The problem is that small local initiatives are difficult to justify in a world where the only metrics in general use are money profit and return to investors. Using these metrics, organizations like WalMart still attract customers, and the local little business goes bankrupt. I would observe that small banks in communities are often not 'community banks' but small banks using pretty much the same business model that is used by the big money center banks. I argue that the values of people, place and planet need to be part of a system of metrics that will drive the decisions that are needed for s sustainable society. This will require a way to quantify value ... which can be done, though it is not particularly easy. I also argue that reporting of such metrics should be not only by an organization, but also by a place. The core of such a system of metrics would be the economic activity that is implemented by an organization and located in a place. Another feature of the metrics would be an ability to disaggregate the data to an individual level to help with individual decision making ... and in due course, reward good decisions. Pieces of this are already going on quite vigorously ... but not yet working as a coherent and complete framework. It think it will come ... and probably quite soon. Peter Burgess TrueValueMetrics Delete 2 months ago Darrell Glasco, Kevin Doyle Jones like this
Jenny Kassan Jenny Jenny Kassan attorney and capital raising consultant for social enterprise We have been working with small businesses to offer investment opportunities (equity, debt, etc.) to their communities in compliance with state and federal securities law. Here is a web site that shows the offerings that are currently open: CuttingEdgeX.com. Hopefully there will be more up there soon! Unlike Reply privately Flag as inappropriate 2 months ago Peter Burgess, Elizabeth Krueger and 2 others like this
Richard Ladzinski Richard Richard Ladzinski Green Realtor, Freelance Writer, Business Consultant, and Marketing Strategist for www.jujugear.com & Others All, in this one small discussion lies the root conceptual foundation of extricating control over capital from Wall Street by empowering the populace in a marriage of cooperatives, community, and socially responsible investment in sustainable systems.In addressing the SEC's concerns about Crowdfunding's inability to protect (small) investor's equity interests, the integration of CoOp concepts injects the interests and power of demand of the ever-more-concerned consuming public into the equation. The Cooperative model and concepts shift the emphasis ofbenefit from return on investment and profit to a more socially focused model of sustainable systems based on equitable access to resources (natural capital ) and their markets. To think of this as an investment club is to adopt a comprehensive construct of social justice relative to provision of the benefits of global environmental health, ecological services, and natural capital.Although the SEC's concerns are somewhat of a sham to protect Wall Street's interests in and grasp of investment capital and its returns, the organizational structure and limitations of crowdfunding are something we have to live with and adapt to by tweaking and perfecting the model. After all, there are plenty examples of failed companies, markets and lost investments on the over-the-counter markets and Pink Sheets. Crowdfunding, CoOps and investment clubs focused on social impact investing may better serve the public's interests.This may be where Peter's concern about applying the metrics of social benefit and corporate costs come into play as a way to balance the playing field of business, markets, people and environments. The emergence and popularity of B Corporations may be a critical organizational step toward accountancy for social and environmental costs and benefits. Then too, the choice of organizational structure relative to mission, may not necessarily warrant the headache to get the benefit.What I have seen in my experience as a consultant with startups, is that most startups and the entrepreneurs behind them are out of necessity primarily concerned with the immediacy of financial survival and profits. I believe the shift to crowdfunding, CoOps and social impact focused investment clubs will help to alleviate some of the pressure to profit in lieu of social and environmental benefits. Our job as concerned global citizens is to see this progress forward.Ms Kassan, since I have been following Cutting Edge Capital's progress for some time now and am aware of the recent addition of Cutting EdgeX and also saw the sales positions being offered, which I have an interest in and would love to discuss separately. I am currently working with five startup companies that are in need of expansion capital that may be good candidates for Cutting Edge and/or other crowdfunding campaigns. Guiding these and other endeavors to socially and environmentally responsible practices and profitability as good examples of building a sustainable society is my primary concern. http://organicforces.wordpress.com/ Like (1) Reply privately Flag as inappropriate 1 month ago Nicholas W. likes this
Kathryn Ebner Kathryn Kathryn Ebner Backer Relations at Pave Really interesting idea and one that we have been exploring through http://Pave.com. Pave is a funding platform that aims to empower young people to advance their careers with capital and support from “backers” who believe in them. We currently have a focus on social entrepreneurs and are working to create communities of support and investment around shared interests and affinities. Pave is a crowdfunding model but where you are investing in people. We have been working with impact investors around investment in a group of people within a field and but there is a lot to do at the community level as well. Like (2) Reply privately Flag as inappropriate 1 month ago Darrell Glasco, Kevin Doyle Jones like this
Elizabeth Krueger Elizabeth Elizabeth Krueger Applying executive and consulting skills to changing investing. I was part of a group that looked at forming an investment club for local sustainable investments, for the reasons suggested in the initial post. Unfortunately, we ran into 2 hurdles and walked away: 1 was the complexity of the contract needed to create such an investment club, investing in private/non-valued securities, and ensuring that all signatories would actually read and understand the implications of the contract we'd be making with each other. Second was the costs to operate the partnership vs the expected returns and scale of assets would wipe out most of the potential return. We opted for something more like sharing the due diligence and co-investing, but it's not a good solution for smaller, non-accredited investors. Like (1) Reply privately Flag as inappropriate 1 month ago Kevin Doyle Jones likes this
Tom Emerson Tom Tom Emerson VP, CitiTrust, Private Bank Here is a Forbes.com piece from Ann Field, very relavent to this thread started about a month ago. Thanks for posting Anne. http://www.forbes.com/sites/annefield/2013/11/24/locavesting-meets-crowdfunding-meets-social-entrepreneurship/#! Like Reply privately Flag as inappropriate 7 days ago
Ajit Jhangiani Ajit Ajit Jhangiani Serving those who serve others. Advisory services relating to CSR, Social Enterprise, and Philanthropy. Wow! I am impressed. Like Reply privately Flag as inappropriate 6 days ago
Ron Ben-Chaim Ron Ron Ben-Chaim MBA Candidate at IE Business School Have you had a look at Symbid in the Netherlands, using a coop model for equity crowdfunding? Like Reply privately Flag as inappropriate 5 days ago
Tina Crouse Tina Tina Crouse President, Women in Leadership - Ottawa See Slow Money http://slowmoney.org/ founded by Woody Tasch. Good history. Good results. Good example. Like Reply privately Flag as inappropriate 5 days ago
Jarred Maxwell Jarred Jarred Maxwell Land Acquisition and Restoration Specialist I run the local Slow Money affiliated group here in Austin and we have seen various models work around the country and here in our town. We started an investment club to promote investments in local, sustainable food systems and food producers. Slow Money groups in Maine and the Northwest have also started ICs. We have run into a couple of issues with this model: 1. The involvement required to continue to operate as an investment club and stay clear of issues with SEC compliance has been an issue. We have a small group that are actively participating, with the bulk of members just assigning proxy to others each month. This skirts the line with the SEC and puts the burden on a few when it is meant to be spread across all members. 2. We make small, low interest, un-colatoralized loans to serve an under served market. Because of this, we have most of any profit we do make eroded by our management costs. However, we are getting money into the hands of businesses that would not normally be able to attain it, which is working to strengthen our local economy. Another model that we have seen work around the country is the LIONs model. This is a group of individual investors that are not incorporated, like an investment club. This removes the administrative burden of adhering to SEC rules and so on, however the deals move slower. They money is not already amassed and sitting in an account ready to deploy, like it is in an IC. Slow Money Northern California has a SOIL Network that operates this way. The Coop model is discussed at length in 'Local Dollars, Local Sense'. I think it is a great model for equity, but requires much more planning and manpower. I love this topic and love that more folks are talking about alternative financing in forums like this. Let's keep the conversation going. We say we want to rebuild our economy starting with the soil, but if we're all trying to rebuild the economy and all start at different points, we can arrive in the middle at a wonderful place. Unlike Reply privately Flag as inappropriate 5 days ago Peter Burgess, Darrell Glasco like this
Sara Day Evans Sara Day Sara Day Evans Founder & Executive Director at Accelerating Appalachia this is extremely helpful thread. we are in early discussion about investment club for small triple-bottom line businesses. hearing the challenges encountered by other investment clubs for non-accredited investors is discouraging, but useful information. Like Reply privately Flag as inappropriate 5 days ago
Bonnie Foley-Wong, CA, CFA Bonnie Bonnie Foley-Wong, CA, CFA Investment and Financial Innovator All these structures are great, however it is how we make investment decisions that makes a difference in the outcomes. See a brief preview of Integrated Investment Decision-Making http://piqueventures.com/integrated-investment-decision-making/ Like (1) Reply privately Flag as inappropriate 5 days ago Darrell Glasco likes this
Darrell Glasco Darrell Darrell Glasco Social Mission Funding Advisor, producing strategies to increase the odds of obtaining capital. Peter Burgess, excellent points. People, place and planet usually gets lost in the decisions that effect them because of the focus on profit and return to investors. Of these three people gets even a shorter straw. To bring about change in this area there is a need for behavioral changes that can lead to collective action. Like Reply privately Flag as inappropriate 4 days ago
Tom Emerson Tom Tom Emerson VP, CitiTrust, Private Bank Jarred, thanks for sharing your group's investment club experiences, vey helpful. I think the Slow Money model has a lot to offer. Like Reply privately Flag as inappropriate 3 days ago
Hatem Mahbouli Hatem Hatem Mahbouli Investment Officer - Micro & Small Enterprise Finance (MSEF) at FMO Very interesting conversation! Everyone here, I am trying to put together a website to connect everyone/retail clients with impact investing opportunities. Let me know if you want an initiative that helps individuals/retail clients invest with a meaning so I can include it. I will definitely write about the CSC one! It is here: www.theimpactinvestor.net Looking forward to hear your comments/ideas! Like Reply privately Flag as inappropriate 1 day ago
Jenny Kassan Jenny Jenny Kassan attorney and capital raising consultant for social enterprise Hatem, I hope you will link to CuttingEdgeX.com - listings of investment opportunities in social enterprises that are currenty open to retail investors! Like (1) Reply privately Flag as inappropriate 1 day ago Hatem Mahbouli likes this
Hatem Mahbouli Hatem Hatem Mahbouli Investment Officer - Micro & Small Enterprise Finance (MSEF) at FMO great! Like Reply privately Flag as inappropriate 1 day ago
Peter Burgess Peter Burgess Founder/CEO at TrueValueMetrics developing Multi Dimension Impact Accounting I may sound like a broken record, but to me it is astounding that the high profile managers in the social impact investing space avoid meaningful metrics about impact. I cannot understand this, and I worry about the reason that this has been happening. There are a number of explanations ... none of them good: (1) The systems people talk about: IRIS, GIIRS, GRI don't really work and are expensive to implement; (2) Organizations are able to do social impact metrics but they know that such metrics would show poor performance; (3) There is nobody in the organization that has the capacity to run a system to account for and report social impact metrics There has been talk about better social impact metrics for a very long time. Why is nothing of high caliber emerging? Why is there push back from many who advocate for significant change in the way modern capitalism works? I was a corporate CFO a long time ago. In recall how difficult it was to get company management to embrace new management information systems (MIS) that had the power to show how every department performed. A good talker working in a place with no metrics is going to look good ... no matter what the actual performance. Are we seeing the same thing many years later in the field of social impact management? Peter Burgess - TrueValueMetrics Multi Dimension Impact Accounting Delete 1 day ago
David Richins David David Richins Content Marketing Strategist I agree that local crowdfunding is the part of the solution - a means to achieving greater sustainability and economic justice. I think much more emphasis needs to be placed on using technology to facilitate sustainable investments at a local level. Like Reply privately Flag as inappropriate 12 hours ago Peter Burgess
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