Why Community Capital?

As we democratize capital for small business and citizen investors, two things quickly become evident. The first is that we have to learn new terms and concepts. Legal and financial language once restricted to conversations between lawyers are now key to unlocking participation in our local economies, inviting us into a new and interesting world. The second thing we realize is that it’s not all that complicated. Some terms should be used fluently and understood by all. One word we’ve chosen to elevate is “capital”. It represents much more than financial capital, and can be a useful reminder as we plan to “grow capital” that we are actually speaking of many forms of capital – community capital – which gives us a chance for a richer (and more authentic) conversation around investing and its economic impacts. We’re going to embrace this new opportunity to be participants in our economies, helping with the need for knowledge that will certainly accompany it. 

Over thirty American states have now implemented intrastate securities crowdfunding laws, and the JOBS Act Crowdfunding Title III is now in effect. These new laws are designed to strengthen our nation’s local economies, helping with capital formation for small business while protecting investors. While these laws create the mechanisms that makes local investing possible, strategies for successful implementation on the ground are crucial if communities are to reap the many benefits. Community capital is better for businesses, better for citizen investors, and better for communities as a whole.

The Goals of NC3

For the last ten years, many of us have been focusing on alternative forms of securities, seeking ways to bring capital back home. Some of us have been at it for much longer, working creatively in finance and the law. We’ve been drawn together over the years at conferences and on panels, and have identified the critical gaps that exist on the national scene for community capital formation. We have formed NC3 to focus on five key areas:

Five Areas of Action

1. Infrastructure

Building the needed infrastructure for community capital is a priority. This includes ensuring new laws continue to pass in states, training attorneys and investment professionals, and working to create incentives for local investing, to name a few.

2. Research and Best Practice

There is currently little visibility into the local investing marketplace. Few are gathering key data at the national level, and tracking systems in states vary widely, if they exist at all. The result is a knowledge gap for policy makers and others in the field, especially around intrastate crowdfunding. If we are to reap the benefits of these new investment tools, we need to track how well they are working and identify successes as well as areas to improve. Once data has been analyzed and promising strategies have been identified, we will share these best practices for implementation and cultivation.

3. Education and Training

The number one issue voiced across the country is the need for education—for entrepreneurs, investors and others in the entrepreneurial ecosystem. Securities regulations can be complex, and as with any major new change, we can expect a steep learning curve. For these new tools to be effective, we must raise awareness while ensuring that entrepreneurs understand how to comply with the regulations and investors grasp key principles such as due diligence and diversification.

4. Policy

We have embarked upon a great new experiment in democratizing finance, and it is a work in progress. With time and research, we will identify what is working and what needs to be improved through policy and regulatory changes, from laws governing advertising offerings to community education needs. We’ve launched the opportunity of a lifetime for our country’s economy, and our systems and policies have to catch up.

5. Leadership and Advocacy

Calling all champions! People from every profession have stepped up to promote models for local, sustainable and just economies—including efforts such as Slow Money, intrastate crowdinvesting, community banking and minority entrepreneurship.  NC3 will host conferences, events, podcasts, and online events aimed at fostering and connecting and supporting leaders.

The NC3 Executive Steering Committee

Michael Shuman

Michael Shuman

Entrepreneur, Economist, Author of "The Local Economy Solution", "Local Dollars, Local Sense", and "The Small-Mart Revolution"

Amy Pearl

Amy Pearl

Educator, Founder and Executive Director, Hatch Innovation; Hatch Oregon

Amy Cortese

Amy Cortese

Journalist, Founder, "Locavesting.com", Author, "Locavesting"

Marco Vangelisti

Marco Vangelisti

Economist, Educator, Founder, "Essential Knowledge for Transition" (ek4t)

Angela Barbash

Angela Barbash

Investment Advisor; Principal, "Revalue"; Founder, "Reconsider"

Arno Hesse

Arno Hesse

Slow Money N. California Investor; Founder, Credibles

Chris Miller

Chris Miller

Downtown & Economic Development, City of Adrian, MI

Christina Oatfield

Christina Oatfield

Sustainable Economies Law Center’s Food & Grassroots Finance Program

John Katovich

John Katovich

Lawyer, Entrepreneur, President, Cutting Edge Capital