3c hapter - Index of

Game Plan for Locavestors
Community Capital 123
its success is attracting more talented and ambitious entrepreneurs
to the area. Honey Gardens, a winery that makes mead wine,
relocated to Hardwick from Burlington to be part of the scene,
opening a tasting room in town.
The Vermont Food Venture Center, a $1 million shared- use facility,
plans to open its doors in spring 2011, right next to Claire’s. The
center will make its dairy, meat, and specialty food processing equipment
and expertise available to local food businesses and startups—
replicating, in a sense, the village canneries and creameries that
once dotted the landscape here. “That building,” says Stearns, “will
jumpstart a whole new generation of food entrepreneurs.
Community capital is sort of a catch- all term for investments that
bring together local residents with a local enterprise to fi ll a need—be
it a café or a department store. These enterprises are typically supported
or owned by the people they serve. There is no one model.
Transactions can take the form of low risk community- supported agriculture
and prepaid shares, interest- paying loans, or equity shares for
those with a higher appetite for risk. The fi nancial returns may vary,
but the feeling of being part of a local institution is, as the famous ad
says, priceless.
Pros:
• There is perhaps no better feel- good investment than putting your
money into a beloved local enterprise, whether a bookstore, café,
or shop.
• Although the monetary returns may be modest, such investments
often carry perks, like discounted products and services.
• For some communities, it is a pragmatic way to bring in a critical
service or business that is lacking in the neighborhood (like those
British villages that lost their local pubs and shops, or a Brooklyn
neighborhood that wants a bookstore to call its own). The arrangements
can involve equity, debt, or prepaid shares, allowing business
owners to tailor the investments to investors’ appetite for risk.