Tuesday October 3, 2017 0 comments
DENVER -- Two years after passage of the Colorado Crowdfunding Act, Invest Local Colorado announced it has completed its investment crowdfunding platform that enables Colorado residents to financially support local businesses.
Investment crowdfunding platforms have sprung up by the hundreds across the United States after enactment of the federal JOBS Act and laws similar to Colorado in other states that authorize resident only offerings.
However, these platforms have had little impact on access to capital because nearly all of them have focused on wealthy individuals as investors (representing less than 3% of the population) and on fast-growing ‘gazelle’ and ‘unicorn’ businesses as opportunities (that represent less than one in a thousand of all businesses).
“The average Main Street business grows too slow, makes too little profit and does want to be acquired to enable a cash exit for investors,” said Karl Dakin, Invest Local president.
“Therefore, these Main Street businesses do not meet the criteria of angel investors or financial institutions and cannot get the money they need. Likewise, the average person does not have money sitting around to invest.
“Representing a new and different type of investor, any investment will be made out of their grocery money. Investment offerings to the average person must take into account their normal spending on products and services that they commonly buy from Main Street businesses in their community.”
Invest Local Colorado will list proposals for the financial support of Colorado Main Street businesses. The proposals will focus on customers of the businesses by pairing the sale of securities with rewards in the form of product or service discounts.
Investors in Main Street businesses will not only have an opportunity to participate in the upside of the business, but they will gain value from the rewards that may exceed the amount of their investment, Invest Local said.
“We have established the Colorado Capital Club as a membership organization to help all 4.3 million adult residents of the state of Colorado learn about investment crowdfunding,” said Dakin.
“For a small annual fee, Invest Local Colorado will provide members with educational materials and programs about supporting Main Street businesses. We want to give tools to the average person so they can financially support their favorite businesses.”
Invest Local Colorado said it is preparing for the listing of its first Main Street business scheduled for Oct. 13.