This post is part of a series called “Mission Markets Musings” where team members share their thoughts on the latest developments within the impact and sustainability sectors.
There already has been much debate, conversation and rhetoric around the topic of securities and what most people are calling “Equity Crowd funding”.
The prospect of investors, regardless of their accreditation status, having the ability to invest in private placement offerings and supporting exciting impact investment opportunities is likely to have a positive influence on the capital injection process for sustainable businesses.
In my opinion, Securities Crowd Funding is best suited towards direct investments in support of local businesses that can improve the health of local communities and economies. I am referring to businesses such as retail outlets, restaurants, local food systems and renewable energy developers. I think that local direct investment and lending by community members can serve as a new form of a “Community Banker.”
These types of investments can offer:
- Opportunity for revenue sharing arrangements
- Cash flow and fixed income returns,
- In some cases potential for equity returns.
They also offer the benefit of having a direct stake in the growth of your local economy as a local investor. This can possibly connect hundreds of local investors with local businesses and substantially increase their chances of success. In turn these local investors become advocates of their local businesses and can see their investment put to work, creating a positive feedback loop.
When the SEC does approve Securities Crowd Funding, it has the potential to spark local economic activity and become an integral tool for creating deep and lasting connections within local economies and their stakeholders.
Founder & President, Mission Markets