If you’re an investor in shares, why not consider becoming a ‘locavestor’ instead? This means that instead of investing your money on the Stock Exchange or on Wall Street, you invest it closer to home, in local shops and businesses. You may or may not get a better return. But in these turbulent times, local indie businesses tend to stick around longer. And even if you earn a few less pounds in interest, you’ll be rewarded by helping to transform your local area into a nicer place for you (and others) to live, work and play.
The Handmade Bakery in Slaithwaite (Yorkshire) is a good example of a successful locally funded business. Baking bread (and teaching others how to make it), it began by offering ‘bread bonds’ to local people, giving fresh loaves in return for funding their start-up. As the bakery became more successful, they had no need to offer any more bread bonds, and now it’s a healthy and thriving locally owned non-profit community-supported workers-co-op.
Good Books on Locavesting
- Financing Our Foodshed is a lovely read that meets passionate local entrepreneurs who invest in many good causes. Meet an artist-turned-baker (who borrowed funds for a commercial oven to start a gluten-free bakery). The owner of a Greek local food restaurant (who refinanced credit card debt for lower rates) and a much loved grocery co-op, whose loan payments were reduced by a third, thanks to an ambitious collaboration between 16 investors.
- Raising Dough is a good book, on how local enterprises can raise money with local investors. Focused on foodie businesses, it looks at the best types of funding to choose, and includes case studies and testimonials from those who have been there (along with cautionary tales).
- The New Local Economy shows how local communities are left vulnerable to unemployment and bankruptcy, when we base economies on the big brands (Amazon, Apple, Starbucks, McDonalds). This book argues for the creation of local economies that can resist the seismic changes that globalisation often brings. For every £100 spent in a local shop, 45% remains in the community (compared to just 15% if spent in retail chains like Tesco or Aldi). The author suggests breaking up the global economy to local versions, can help communities regain their independence.
- Rebooting Local Economies is a book on how communities can thrive, when economics is done right. This practical guide includes numerous examples, based on the authors’ years of experience helping regions around the world to create roadmaps with better jobs, improved public services and enhanced amenities.
- Read Put Your Money Where Your Life Is on how local investments put money into strengthening your community, neighbourhoods and schools, instead of increasing some CEO’s bonus.
- Locavesting takes us inside the local investing movement, where indie businesses show profits to build healthy self-reliant communities. Meet pioneers behind the movement, and find people and communities who are putting their money to work in their own backyards, to take control of their destinies. The book explores community capital, crowdfunding and local stock exchanges.
Community Shares can be bought and sold to save a local pub or set up a clean energy project. You then become part-owners of the business. You can buy or offer community shares and offer advice and support to local enterprises. Find support at Community Shares Unit.
The American site WeFunder offers a good overview of local investing. It’s basically like crowdfunding, but for local indie businesses, rather than inventions to sell. Like any investment, it has risk. But if the little artisan bakery you would like to suppor does well, you make money. And if not – well, at least you tried – and made your community a little better for it. Like crowdfunding, you get perks for funding (free cakes likely, in this case!)
Their tips include ‘expect to lose all your money’ so never invest more than you could afford to lose. But if you know what you’re doing and invest in small amounts pooled with others, this is far less risky (and more worthwhile) than gambling on the stock market. The lead investor tends to be more invested in the company, and is the one to go to for questions, before you invest.
This site is only for Americans, so after reading through the information, visit Alternative Business Funding and enter the amount required, to find crowdfunders that may be interested. Failing that, it may be worth trying for money at Cooperative & Community Finance (it has funds to invest in local social enterprises and ethical start-ups, on a case-by-case basis).
We need to start to talk about money in ways that dethrone it. And make it subject to human ethics, and standards of love and decency. Joel Solomon
