3c hapter - Index of

176 Locavesting
keep their fundraising to their membership base and within a single
state. State regulations vary widely, but some states exempt them as
well. Texas, for example, allows for in-state offerings to members, so
co- ops such as Black Star can raise large amounts of capital with minimal
red tape. For investors, co- ops present an opportunity to invest
in a business they know and trust—after all, they are owners of it—
and earn market- rate returns while supporting their broader community.
In addition, the growth and success of the co- op fl ows back
to them through better products and services and patronage rebates.
Co- op members have responded enthusiastically. Take the
Wheatsville Co- op in Austin. Despite being in the hometown of
Whole Foods, the $9 billion natural food retailer, and two miles
from the chain’s fl agship store, the Wheatsville Co- op has thrived.
In 2005, it raised over $700,000 from 165 members in just two
months to fi nance a major expansion, which doubled its retail
space. The co-op’s aisles are no longer cramped, and it can now
offer more prepared foods, among other things. The store’s sales
have doubled every year since 2005.
The Willy Street Co- op, a popular food co- op in Madison,
Wisconsin, with 23,000 members and $20 million in sales, has
a long history of raising money from members to fund expansion,
starting with its original store opened in 1974. In its most
recent effort, the co- op set out to raise $600,000 from members
for a second Madison store. Members could invest as little as $200
in “owner bonds,” zero- coupon bonds that are paid back at their
maturity with interest, ranging from 4 percent to 5.2 percent,
depending on the length of the loan (three to seven years). In an
outpouring of support, co- op members snapped up $1 million in
shares in just 39 days, blowing past the co-op’s fundraising goal.
The new “Willy West” opened its doors in late 2010. “When you
see something like this, it really does show how people are thinking
today,” notes Deborah Mitchell, a lecturer at the University of
Wisconsin in Madison. “It’s sort of a values choice by consumers.” 10
Casting a Wider Net
Some of the bigger co- ops with greater capital needs have gone
outside of their membership base and across multiple states to