Can Crowdfund Investing Support Locavesting? - dummies

Can Crowdfund Investing Support Locavesting?

By Sherwood Neiss, Jason W. Best, Zak Cassady-Dorion

Crowdfund investing, which takes place online (and could easily allow someone from Alabama to invest in an Arizona company), has the opportunity to promote locavesting. If an investor approaches crowdfund opportunities with the goal of strengthening her home community, she can provide financial support to her hometown businesses in ways that were never before possible.

Amy Cortese coined the term locavesting and literally wrote the book on it. In the book, she discusses how investing in local economies stimulates those economies. When you take a dollar and invest it in a public company (like Apple) that isn’t located in your community, you send that money outside your community, and the money never comes back.

(Sure, your money may help make the next version if the iPad even cooler, but it doesn’t directly support local jobs or businesses.)

Say, instead, that you invest that same money in your local Apple Organic Farm. This farm employs a few people and needs to raise money to plant some more trees, hire a couple more folks, and expand its product lines to apple pies, apple sauce, and apple serum to remove wrinkles.

Every dollar that you invest into Apple Organic Farm goes directly back into the community. The investment dollars help pay wages for the employees who go out and buy local produce and other products and pay their local mortgages or rents and pay local taxes. The farm also buys products and services, many of which come from local vendors.