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3c hapter - Index of
3c hapter - Index of
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124 Locavesting<br />
•<br />
If you want to play it safe, prepaid shares are an easy, low cost<br />
way to support a local establishment. Those with more disposable<br />
investment capital might be comfortable becoming an equity<br />
investor. For small businesses, community capital is a great way to<br />
engage customers and literally get them invested in their success.<br />
Cons:<br />
• These are high- risk propositions. Small businesses, especially those<br />
without a track record, can fail. Good management is critical.<br />
• Most community capital deals are ad hoc. There is, as yet, no formal<br />
way for investors to fi nd out about such opportunities. Typically<br />
information is spread informally through word <strong>of</strong> mouth or from the<br />
business itself.<br />
• Interest rates on loans to a community- supported business may<br />
not be commensurate with risk.<br />
• The downside <strong>of</strong> equity investments, in addition to risk, is that such<br />
investments in privately held businesses are typically illiquid.<br />
• Finally, community capital deals should involve an experienced<br />
pr<strong>of</strong>essional, since they can easily run afoul <strong>of</strong> SEC laws.<br />
The Bottom Line: Community capital can be a wonderful way to<br />
support a business that you care about, and it makes great sense<br />
if you are already a regular customer. For communities, it can build<br />
a sense <strong>of</strong> belonging and shared purpose. Prepaid shares are an easy,<br />
low- risk way to support a local establishment.<br />
For More Information:<br />
• General information on community capital and public policy can be<br />
found at the Institute for Local Self Reliance’s New Rules Project,<br />
at www.newrules.org. The Institute’s The Big Box Toolkit, at www<br />
.bigboxtoolkit.com, is chock- a- block with advice and practical strategies<br />
for communities that want to protect and enliven their own<br />
downtowns or organize their own community- owned stores.<br />
• The Plunkett Foundation tracks news and issues relating to rural<br />
cooperatives and social enterprise at www.plunkett.co.uk.<br />
• The Democracy Collaborative maintains a comprehensive site devoted<br />
to community wealth- building at www. community- wealth.org.<br />
• For information on creating community- owned energy production,<br />
see www.cooppower.coop.<br />
•<br />
For Saranac Lake Community Store, see www. community- store.org.