3c hapter - Index of

186 Locavesting
It’s also a way to support a company whose products they love
and whose values they share, while participating in the upside (or
downside) of the business. Investors in Annie’s Homegrown, for
example, were able to share in the growth of a company that went
from a home operation to a national brand with the country’s
number- two selling macaroni and cheese. (Annie’s was taken private
by new management in 2002).
Real Goods Trading grew from a tiny catalog retailer to a
$19 million company with fi ve stores selling everything from
organic cotton apparel and gardening tools to rain barrels and
small wind turbines. In 2001, after some fi nancial struggles, Real
Goods merged with Gaiam, a natural lifestyle products company.
In a reminder that this is essentially public venture capital with
all the attendant risk, investors were offered slightly less for their
shares than they initially paid (although the deal was sweetened
with generous discounts on future purchases). But the combined
company today is a $60 million leader in its fi eld.
Other small companies with strong followings have had similar
success with DPOs, including California Federal Bank, Mendocino
Brewing Company, Zap Electric Bikes, and Diamond Organics.
Some are household names. Price Club, which pioneered
the member- only warehouse club model of retailing, fi gured its
members knew a deal when they saw one. So, when it struggled
with cash fl ow in 1991, the company offered members the opportunity
to invest directly in a Real Estate Investment Trust (REIT)
that would purchase Price Club properties and lease them back to
the company. Advertising in the Price Club circular, it raised more
than $70 million. Price Club later merged with CostCo, which
reported revenues of $76 billion in 2010.
And in 1984, when two guys named Ben and Jerry were
looking to raise money for their little ice cream operation in
Burlington, Vermont, they turned to their biggest fans: their customers.
They advertised the Ben & Jerry’s shares—priced at $10.50
a piece with a 12 share minimum—in local newspapers and on
pints of ice cream with the slogan, “Get a Scoop of the Action.”
About 1,800 ice cream- loving Vermonters did, raising $750,000.
The DPO allowed the founders, Ben Cohen and Jerry Greenfi eld,