As I noted last week, investing in local small businesses has a lot of advantages over putting your money into some Fortune 500 company or...
As I noted last week, investing in local small businesses has a lot of advantages over putting your money into some Fortune 500 company or fractured, global mutual fund. One of the challenges, however, is that we don't have stock exchanges set up for small-scale, local investing.Local 2020, an innovative citizens' organization in Jefferson County, Washington, may have one solution to that problem. Local 2020 sprang up spontaneously in 2006 (they call themselves an "adhocracy") as an amalgam of various grassroots campaigns. The group's mission is to "[work] together to ensure a thriving local culture balancing economy, ecology and community." Here's a YouTube video that explains what they're about.They have a few campaigns going to foster economic localization. One of them is the Local Investing Opportunities Network, or LION:
LION is not a bank, lending institution, or financial consultant. Its membership consists of local citizens who want to invest their money locally, thereby putting their investing money to work within our community. Keeping funds local facilitates greater economic self-sufficiency, job growth, economic development, and a dollar-multiplier effect whereby a dollar kept within the community can be spent many times over for a far greater benefit than a dollar invested away from our community.LION vets the businesses and investors with applications, and provides a reasonable "membership agreement" that covers some basic legalese. Then the investor and business work out their own terms.It looks like LION just facilitates private investment agreements between owners and investors. That may allow them to avoid some of the burdensome regulations that come with issuing public stock. Unfortunately, it probably also limits the ease with which people can buy, sell, and trade local stock.If you live in Jefferson County you can get involved yourself. If you don't, LION may be useful as a model for how to get local investing going in the absence of some big changes at the Securities and Exchange Commission.