Local Investing

[Caitlin Quigley]

This discussion page is for our efforts towards local investing.

[Laura J Sellens]

The point of this effort is to bring an opportunity to Whatcom County residents to invest local businesses as non-accredited investors. So we would have the option to not only SUPPORT local business, which as you say can be done in many ways, but also INVEST in local business--for a return--all without having to have a million dollars.

My understanding of a Transition group is that it seeks to be integrated in the business and civic community of which it is a part. That is why the "Project Support Project" idea is so important. An effective transition town would support the activities of existing groups on great stuff that's already happening, collaborate with existing groups to augment those great things or start new things to fill gaps for resilience, or really create a new project by ourselves only when there's no one to collaborate with. This conserves energy, creates community and morale between TW and other groups by infusing them with a new burst of energy.

I understand the value of exercising the name Transition Whatcom. It's good for this group. But in the long haul, what matters to me is what we get done in terms of neighborhood and county-wide resilience. That's why I think we should format this survey to be useful to the broader sustainable business leadership. Because three of the folks that I sent the survey to have actually asked us for the results. So it might actually foster things along in the broader community.

So there's my attempt to answer your questions. But I see your point, that this survey would be sent out to TW members so it could be put in terms of Transition. I think in my mind I was automatically skipping to pasting the link to the survey and sending it out via email so we could get more responses, which we never talked about. That's why I jumped right to the broader public. I also think we were never clear as group on this point, so it doesn't surprise me the we get to have this debate via the internet at the last minute.

It occurred to me, though, that we could write it as 'Transition-related' and then translate that to 'local sustainable' when we give the results to Jennifer, Amy and Derek. Just more work to do.

For the sake of Angela and anyone else who might be listening in on this but not regular attendants of our meeting, I'll recount my history of the topic. Since the Unleashing we have been exploring the options for local investing. Found none existing to date, especially not for non-accredited investors (Means you're worth at least a million). One idea we had was to create a fund for TW projects, one idea was to work with a bank or credit union to create a certificate of deposit that would fund TW projects, one idea was to work with Sustainable Connections to create a local investing program, possibly modeled after Slow Money. All of these ideas require someone to vet the investment opportunity, which amounts to risk being placed on us, the credit union, or SC, respectively, which is not that good. So we are now moving toward a network idea which functions solely as a link between investors and opportunities, and the details get worked out NON-PUBLICLY, that's very important--and the risk is placed on the investors to vet the opportunity themselves.

Anybody else want to chime in on this? I feel like my vote just changed from "local and sustainable" to "whatever." I dislike debate. I'm sure it's fine either way. It took me 3 months to get consensus to send the thing out, let's get 'er done before something else rocks the boat!

[Heather K]

Well stated Laura! “An effective transition town would support the activities of existing groups on great stuff that's already happening, collaborate with existing groups to augment those great things or start new things to fill gaps for resilience, or really create a new project by ourselves only when there's no one to collaborate with. This conserves energy, creates community and morale between TW and other groups by infusing them with a new burst of energy.”

I've been listening in, though not able to attend sit-down meetings.
Thank you all who have been working on consensus & are getting things done, and sharing the meeting minutes online!

My feedback is not meant to slow your momentum down...just to share my perceptive.
The word “sustainable” has become a slippery word, with the increase of green marketeers, (& some of them local), looking for a way to make another USD dollar.
A rewording idea, would be “local stewardship”.
Some of the native plant societies are starting to coin this 'stewardship' term instead of using 'sustainable'.

The 'transition' to a more local & earth stewardship way of being in community, has been in progress decades before the newest re-languaging of the 1970's environmental & permaculture movement, that Rob H has coined & re-framed as 'Transition'. There are many folks in our community that have been doing the actual 'transition' work, before this newest movement labeled 'Transition Whatcom” was created. There are many more folks beyond the ning-site who have awareness of local & globel stewardship.

Walter thanks for sharing how & where a little bit of cash can make a huge difference...
I myself would also like to see cash going towards buying local farmland & forests before the land gets bought by investors not living locally. And also to see more folks encourage the work of Kulshan Land Trust, who are needing funds & local farmland to steward and be used by a local farmer. (last 3 paragraphs at http://www.kclt.org/pdf/WFIP_brief_March_09.pdf

Finance group, I must admit I'm a bit lost as to whether the small investor with 'cash' would be done as a tithing donation to a non-profit/local business with stewardship principles, or whether the cash would be a local 'investment tool', with a commitment being made to pay the cash back within a set timeframe to the investor (ie a cash-steward).....

I appreciate the focus that is shown in this group, and as a longtime credit union member & fan, appreciated your educational “move your money' brochure.


Laura J Sellens said:

The point of this effort is to bring an opportunity to Whatcom County residents to invest local businesses as non-accredited investors.........

My understanding of a Transition group is that it seeks to be integrated in the business and civic community of which it is a part. That is why the "Project Support Project" idea is so important. An effective transition town would support the activities of existing groups on great stuff that's already happening, collaborate with existing groups to augment those great things or start new things to fill gaps for resilience, or really create a new project by ourselves only when there's no one to collaborate with. This conserves energy, creates community and morale between TW and other groups by infusing them with a new burst of energy.

I understand the value of exercising the name Transition Whatcom. It's good for this group. But in the long haul, what matters to me is what we get done in terms of neighborhood and county-wide resilience. That's why I think we should format this survey to be useful to the broader sustainable business leadership. .........

Anybody else want to chime in on this? I feel like my vote just changed from "local and sustainable" to "whatever." I dislike debate. I'm sure it's fine either way. It took me 3 months to get consensus to send the thing out, let's get 'er done before something else rocks the boat!

[David MacLeod]

Lots of good comments. I don't have a position one way or the other yet, but I thought I'd offer some Rob Hopkins thinking to consider.

Rob Hopkins recently published his PhD thesis. A very interesting point was made in his blog post announcing this:

The first major finding was that Transition Town Totnes (TTT) has become a significant organisation in the town, with a high level of popular support. It was also found that the obstacles to resilience and relocalisation lie not, as was hypothesised, in a lack of skills or an absence of community cohesion, but in issues of governance and the need for increased social entrepreneurship. It was found that what researchers call the ‘Value Action Gap’ (i.e. the gap between people’s declared sympathies and intentions and their actions) exists in Totnes as much as anywhere else, but that some of TTT’s projects, such as Transition Together, are working imaginatively to overcome this and to reduce emissions.

From this evidence is it concluded that Transition’s approach towards relocalisation and reducing carbon emissions can be argued to be effective in, generating engagement and initiating new enterprises. ..Its primary contribution is in suggesting a redefining of resilience, not as a state of preparedness for disaster, but as a desired characteristic of a sustainable society. A more resilient community, it is argued, would be one more in control of its food and energy production, as well as being one that enables inward financial investment. It also argues that the government focus on ‘localism’, the devolving of political power to the local level, ought to be expanded to include ‘localisation’, the strengthening of local production to meet local needs, a shift which would financially benefit local communities. It argues that the key challenge for Transition initiatives such as TTT is going to be scaling up from being ‘niche’ organisations to become economically viable organisations with a broad appeal and engagement, and also articulates the need for ‘Resilience Indicators’ which would allow communities to measure the degree to which their levels of resilience are increasing”.
http://transitionculture.org/2010/11/09/now-available-localisation-...

Other articles by Rob Hopkins of relevance and importance:

Ingredients of Transition: Social Enterprise/Entrepreneurship
http://transitionculture.org/2010/11/12/ingredients-of-transition-s...

Localism or Localisation: Defining Our Terms
http://transitionculture.org/2010/07/30/localism-or-localisation-de...

[Dianne Foster]

I find I'm swinging back and forth on this, and think the in-person dialogue might be more decisive, maybe some integration of both views. See you Sunday.

[Laura J Sellens]

Hi all,

Wanted to share this comment I got today on the survey. I believe when we present the idea in full concerns like this will be dispelled.

"I have to say, that survey makes me a little uncomfortable. Local organic farming is one thing, but it is a lot trickier to figure out the true net environmental impact of other types of business activities, and I feel a little uncomfortable with the idea of Transition Whatcom becoming a money conduit. How will these potential recipients be screened to assure investors that the NET environmental impact of these businesses is truly sustainable, and not just painted green? I'm just sayin..."

[Heather K]

The survey looks good. Can we add a link to the survey somewhere on this TW website...maybe as under a broad TW Discussion link?

I would like to encourage one of us to request Laura R. who has a broad Whatcom Farmers network, to post it on her site. (Let me know if you want me to pursue this, but I prefer someone else make the contact)

[Shirley Jacobson]

Update on Business Bank in today's Herald

http://www.bellinghamherald.com/2010/12/21/1782537/business-bank-ra...

Good to see they have passed the first hurdle and will now be open to small investors like myself.

[Laura J Sellens]

I just sent this out as a message but I'm posting it here for posterity.

We recently issued a survey to gauge interest in local investing and have received much useful information from it--many thanks if you responded.  It seems this is quite an exciting idea for both potential lenders and potential borrowers. 

The survey was intended to get an idea of existing business plans but was intentionally left general and anonymous.  However we have started receiving detailed proposals, so it's time to talk about the SEC, at least as I understand it so far.

If we know each other, and you borrow a nickel, that's fine.  That's a private contract (non-public offering) and the term and interest rate, if any, are up to us.  Legal.  If you put an ad in the paper to borrow a nickel, that is a "public offering" and shall be regulated by SEC rules.  Now, in order for me to lend you a nickel--well, I don't even know how many requirements we would have to follow, and actually the burden of responsibility is on the borrower to follow SEC rules.  The difference is whether a relationship exists before terms are discussed or not.  If someone posted a proposed business plan and contract to this group site, it could be considered a public offering. 

IF a local investment vehicle gets formed, we will have to go one of these routes, and we'll have to be very careful to make sure it's legal.  In the case of a private contract, we'll have to make sure that a relationship exists between potential investors and borrowers BEFORE any terms are discussed.  In the case of a public offering, we'd need some major help to make sure everything is legal.  My sense is that this option is way over our heads and we want to avoid it, at least at this time.

My point is that, so far, there is no vehicle for local investment as a non-accredited investor (accredited=worth a million$).  It's an exciting idea and we hope to work something out.  But please be careful in how you share your excitement.  Jumping the gun, sharing too many details too soon could jeopardize our ability to work together legally.  Please keep this in mind and as you hear folks talking about this idea, try to help people understand.  I'm sending this out because we who attend our meetings have discussed this over and over, but y'all on the periphery may not know.  It's important. 

I guess I ought to say, this message is just from me, not the group.  I'm eager, but also concerned that we proceed with due diligence. 

Cheers, Laura

[Laura J Sellens]

Walter,

 

Thanks for your concern.  Do you have any recommendations for lawyers who could address this topic?  Are you willing to say which information is or might be erroneous?

[Heather K]

Re the received proposals Laura referred to:  Has a process been established for receiving 'detailed proposals"? 

 Would it be possible to share by email the proposals we've received?

Laura J Sellens said:..........
........The survey was intended to get an idea of existing business plans .....  However we have started receiving detailed proposals.......

[Caitlin Quigley]

Hi Heather,

Sorry to keep you out of the loop.  Attached is a pdf of the local investing survey results which we reviewed at our last meeting.  The detailed proposals referred to are mostly lengthy responses to the survey with specific business ideas, such as a plastic-to-oil plant.  We have one detailed proposal from a Transition Whatcom member who wants to expand his existing restaurant business to include locally-sourced catering.  I actually haven't shared that with anyone and I'm not sure if I should post it here.  Basically, we're not sitting on a stack of 40-page business plans, but there are some tangible ideas out there that we are learning about.  Let me know if you have other questions.

[Heather K]

Caitlin, thanks for the link to survey results.

Interesting for me to see that a couple dozen folks had an interest in finding farmland to buy or lease.

I'm aware that the Kulshan Land Trust has been in the process of looking for farmland, though I don't know the currant status of their attempts.   They would be a good organization to collaborate with in the future.