INVEST LOCAL COLORADO LLC
A Money Marketplace Where Ordinary People Can Financially Sponsor Local Businesses!
Owning your own bar or brewpub is a dream shared by many people. With over 6,300 craft brewers in the United States, the possibility of becoming a craft brewer is increasing. However, you don’t have to become a small business owner or brewmeister in order to enjoy the privileges of ownership.
Changes in federal and state laws now make it possible for ordinary people (non-accredited investors) to invest in a craft brewing business in small dollar amounts through investment crowdfunding.
So, if you invest money, but you are not the business manager, what does ownership look like?
Let’s start with the benefits. Every craft brewing business is different and so the benefits you may receive may vary greatly. However, good craft beer may be expected. As an owner, you may get price discounts, participate in beer tastings and attend beer festivals. All of these include enjoying craft beer. And let’s not forget that part of every beer tab may come back to you in the form of distribution of revenues or profits.
So, what do you need to become an owner? First, you have to find a craft brewing business that is interested in sharing ownership with a large number of people. Second, you have to write a check. However, investing is not enough. If all you are looking for is a return on investment, you can simply buy stock in one of the major brewing companies. Ownership in a craft brewing business can be so much more.
Your ability to help your craft brewing business succeed will depend upon your knowledge and experience in operating a small business.
Everyone can provide customer feedback. Business management needs the ‘voice of the customer’ on the quality of their products, services, communications, and reputation in the community. This includes beer tasting.
You can be an ambassador for the craft brewing business. You can share hosting duties by greeting guests and helping them make beer selections. More beer tasting. You can share news about the craft brewing business within your personal and business networks. You can be another set of eyes and ears for what’s happening in the pub and in your community.
You can support sales by encouraging people to come to the pub, order beers by brand name at local restaurants and buy beer at retail stores.
With training, you can elevate your value. You can learn how to run a craft brewing business. This may include brewing or distributing beer, customer relations, regulatory compliance or general skills common to any small business.
You may choose to add more hats. In addition to being a customer and an investor, you may formally become a member of the board of advisors or a sales affiliate.
However you support your craft brewing business, you will become a member of its tribe. You will meet new people, develop new relationships and enjoy craft beer. A dream in which we now can all participate.
Karl Dakin, Executive Director
Brewing Investors Guild
The Brewing Investors Guild LLC is a new for profit association whose members will act collectively as a ‘crowd’ to provide financial sponsorship, perform non-monetary support and promote businesses in the craft brewing industry. Members of the Guild can learn how to become an owner in their favorite pub “where everyone knows your name”. Skills will be taught on investing, operating a craft brewing business, supporting a local business, brewing/tasting beer and relationship development.
The mission of the Brewing Investors Guild is to create a marketplace where ordinary people (non-accredited investors) can take action to help local craft brewing businesses succeed. Successful businesses will create more jobs, support our communities and provide a continuing selection of tasty new beers.
“We are an action group!” said Karl Dakin, founder of the Brewing Investors Guild. “We are not drive by investors who write checks and then step back to see if the business succeeds or fails. We believe in local businesses and we are fans of craft beer. As a group, we will do what we can to help a craft brewing business start, grow and sustain its operations.”
“In my work in raising money for small businesses, I realized the need to build a craft beer industry focused ‘crowd’ of people that care about a business, not just making more money – impact investors. It is now possible for ordinary people to directly invest in a Main Street business. However, these businesses are not the types of businesses that think of investors as ‘other peoples’ money’ but as their customers, neighbors and friends. These business owners are not intent upon flipping a business, but living their dream and supporting their communities. We need ordinary people who share these values and want to provide support to these businesses to come together within the limits of their money, time and knowledge.”
Fundamental to the goal of the Brewing Investors Guild is the development of skills. Members will be offered educational programs that will make them a valuable resource to any craft brewing business. Benefits will also include events, discussion forums, libraries and software services. Each new member will receive a copy of the Investing in Main Street Workbook and the Craft Brewing Investors Guide from the Local Money Marketplace PBC.
Members of the Brewing Investors Guild will act like a volunteer fire department. When a craft brewing business declares its need for financial help, the members will organize and work with the business to help it find the capital it requires. Members will also provide customer feedback, act as business advisors and promote sales of the craft brewing business.
As an investor in a craft brewing business, a member may see part of their bar tab come back to them in profit distributions. Fractional ownership may also gain the member special treatment as a VIP. Members may obtain passes to beer tastings and receive price discounts on beer purchases.
The Brewing Investors Guild will offer a Basic Membership ($35/year) that includes a membership in the Colorado Investors Guild hosted by Invest Local Colorado LLC, a Colorado registered investment crowdfunding intermediary (http://www.investlocalcolorado.com). Durban Indoor Hops LLC (http:www.DurbanIndoorHops.com) is currently sponsoring a $10 discount of the fee. Interested people can gather more information and register to join the Guild at: http://www.InvestLocalColorado.com/Brewing-Investors-Guild. To gain the discount, use the code: Durban.
It is planned to offer an advanced Funding Co-op Membership ($325/year) to craft brewing businesses later this year. Members at this level will receive training on conducting capital campaigns, a subscription to an interactive matching service for funding sources, free private placement listings on the Invest Local Colorado LLC platform and access to all members of the Guild as possible investors.
The Brewing Investors Guild will offer its services to the four million craft beer consumers, the 6,300 craft brewers and the large number of grain and hops farmers, food brokers, packaging suppliers, beer distributors, beer retailers and specialty service providers who work within the industry.
Operations are starting in Colorado with the expectation of rapidly expanding into other states and countries around the world.
Employees of the Denver Post joined in a protest of layoffs and firings by Digital First Media, the owner of the Denver Post and controlled by hedge fund Alden Global Trust.
The protest seeks action by Alden Global Trust to sell their ownership in the Denver Post “to someone who cares about Colorado, and they must do it immediately."
Typically, in situations like this, ownership is shifted from one wealthy person to another. What if, this time, a different path was taken and the ownership of the Denver Post is sold to its customers? What if ownership was held by the people who read the paper and advertise in it?
Recent changes in securities laws makes it possible to raise money from large numbers of ordinary people (non-accredited investors) in large amounts. It is now possible for a number of people to work together to invest in a new business or the purchase of an existing business.
Would investing in ownership of the Denver Post be a good investment? It has been reported that the Denver Post was making a profit before recent layoffs, however this information has not been verified. The newspaper industry has been in decline and many newspapers have failed and closed. A simple investment with no more than a promise of a future return on that investment may not be attractive enough for ordinary people to part with their hard earned money.
What if ownership in the Denver Post was paired with a discount on future subscriptions? The Denver Post currently reports 1,016,547 weekly readers and charges a minimum subscription fee of $104.04/year for their Wednesday/Sunday/Digital version. Would this be incentive enough to gain an investment? If all weekly readers invested $50 each for an ownership stake and a free one year subscription, it would be possible to raise $50 million toward the purchase of the Denver Post.
If the purchase of the Denver Post were crowdfunded, it would not be the first paper to be financed in this fashion. The Berkleyside newspaper, based in Sonoma County, California, raised $1 million from 355 people in order to expand, add mobile and add (not fire) reporters. Investors stated they made the investment “because they value reading about their own community and getting information that is not readily available from other news organizations.”
Would the Denver Post remain the same if it were owned by one million of its customers? Would the paper modernize, expand or limit its services, become politically moderate, go completely digital or make other major changes that would better serve the needs of the community?
Of course, it is not known whether Alden Global Trust will sell the Denver Post or what price it may ask? We will see. If they will sell, will crowdfunding become part of the solution?
Karl Dakin, CEO
Invest Local Colorado LLC
The Denver Business Journal recognized Karl Dakin in its first Who’s Who in Impact Investing:Rocky Mountain Region. An awards ceremony was held on November 23rd as part of Colorado Impact Days hosted by the Impact Finance Center.
The Impact Finance Center is a nonprofit academic center dedicated to teaching foundations, family offices and individual investors how to make investments into companies, organizations, projects and funds with the intent to generate a measurable financial return and a beneficial social, environmental and community impact.
Stephanie Gripne, the founder and Executive Director of the Impact Finance Center, described the event as the next step in ‘develop(ing) a phonebook of key players in the movement and marketplace.”
“I am extremely pleased to be one of 77 people recognized in this event,” said Karl Dakin, a professional entrepreneur and activist in improving Colorado’s capital ecosystem. “I see this recognition as a reflection of the work by the team at Invest Local Colorado LLC where we have successfully launched our investment crowdfunding platform. It is now possible for ordinary people to financially support their Main Street businesses and have greater impact.” http://www.investlocalcolorado.com
The art and science of building a ‘crowd’ for Investment crowdfunding may be compared with running for mayor in a small community.
A person who starts their business becomes their own boss. However, when an entrepreneur accepts investment money, they now have an obligation to look out for that investment money for the benefit of the investors. There is a new boss.
When a person raises money from their community through crowdfunding, they have a responsibility to their community. But, first, to obtain investments from their community, their community has to know them and respect them. The actions taken to become known and to gain respect can be called ‘crowd building’.
The steps taken to become mayor may serve as a template for an entrepreneur raising community from their community.
a. Participate in one or more civic organization
b. Participate in one or more professional organizations
c. Support two or more local charities
5. Be visible
a. Speak - share knowledge
b. Write – set up a website, post blogs, write editorials
c. Act – dedicate time and resources to making the world a better place
a. Ask for their input
b. Ask for their help and support
c. Acknowledge those who try
d. Acknowledge greater those who succeed
e. Support those who are making a difference
This takes a lot of work. It usually takes a lot of time. But, this investment may pay rewards over a long period of time. And, if a ballot box is set up within the community, this work can get a person elected by the community as the CEO of their own business.
Karl Dakin, President
By Monica Mendoza – Reporter, Denver Business Journal, Oct 31, 2017, 6:30am MST
Denver Business Journal Article
Two years ago, the Colorado Crowdfunding Act was rolled out with high hopes.
Its backers promised it would make investing more accessible to the average person who wanted a piece of the equity pie and it would help small businesses and startups raise the capital that had often eluded them.
But after all the buzz and they hype, there was silence.
“It was all quiet on the crowdfunding front,” said Gerald Rome, Colorado's securities commissioner.
Rome convened a panel of equity crowdfunding experts Oct. 25 at the University of Colorado Denver Business School to discuss why equity crowdfunding -- the kind in which an investor gets a stake in a company -- has been so slow to takeoff.
So far there has only been one equity crowdfunding campaign launched -- Paradox Ventures Inc., a Colorado hemp and extracting oil company which is trying to raise $250,000 to expand its business.
Karl Dakin, a lawyer and small business advocate, says the law was not a flop and he still believes equity crowdfunding has a place in raising money for small businesses and startups.
"We think the hard part is behind us," Dakin said. "Right now I see it all going forward."
Dakin is behind one of the approved equity crowdfunding sites, Invest Local, which featured the first fundraising campaign.
The biggest issue is that it took two years to get an operational website where equity crowdfunding offerings could be made, he said. The sites, called intermediaries, are listed on the Colorado Division of Securities website. They ensure that the businesses meet the disclosure rules and that the investors are from Colorado.
As of late October, there are now two websites up and running -- Invest Local and CFEX Holdings.
The sites had to be built from scratch and it took time, said Dakin, principal in Dakin Capital Services LLC, which plans and manages capital campaigns.
“But now that the site is open, we don’t see serious obstacles to expanding this rapidly and making this available as a common service to small businesses in Colorado,” Dakin said.
The challenge now will be getting the word out that equity crowdfunding is as a way to raise money for a new business or expansion of an existing business.
“The thing that will sell it is a successful raise,” Dakin said.
In 2015, Colorado became the 24th state to enact a law that allows non-accredited investors to make small equity investments in a privately held business in the state over the internet.
A Colorado business can now raise a maximum of $1 million from equity crowdfunding, and up to $2 million if the business submits audited financial statements to the state’s Division of Securities.
Before equity crowdfunding, investors had to be accredited – which means they have an annual income of $200,000 and a net worth that exceeds $1 million. Dakin said it limited who could invest. Under equity crowdfunding, anyone can invest up to $5,000 in a business.
Roughly around the same time Colorado was setting up its rules for equity crowdfunding, the rules for the federal Jumpstart Our Business Startups (JOBS) Act were approved. The law was signed by President Barack Obama in 2012.
But the U.S. Securities and Exchange Commission was slow to write the rules under the new law; those rules were finalized in May 2016.
It was a shift from existing non-equity crowdfunding models like Kickstarter and Indiegogo, where someone with an idea asks for money via an online pitch, but instead of equity, gives out perks like T-shirts or first dibs on a product.
Under the JOBS Act, investors don’t have to be accredited, and entrepreneurs could use the internet to pitch their ideas.
Obama called the JOBS Act a “game changer,” saying that average Americans could invest in the businesses they believed in.
But even at the federal level, equity crowdfunding has been slow to take off. Critics say supporters overestimated the enthusiasm for equity crowdfunding.
CU Boulder law professor Andrew Schwartz recently went to New Zealand, as a Fulbright research scholar, to study its equity crowdfunding laws, which have been operational for three years.
New Zealand has had successes, he said. There, businesses can raise up to $2 million in a 12-month period using equity crowdfunding. He saw some stark differences in the rules between New Zealand and Colorado, which have comparable economies.
“In Colorado, an issuer who wants to raise money must file certain forms with certain disclosures with the Division of Securities and provide it to investors and provide a quarterly report also to SEC and investors,” he said. “New Zealand has no mandatory disclosures. There is no form to file.”
In the first year of equity crowdfunding, New Zealand businesses raised 30 times as much as U.S companies and had 13 times as many offerings, when scaling for the two nations' sizes, Schwartz said. The raises were successful about 80 percent of the time compared to 50 percent of the time in the U.S.
But Rome is a little squeamish about running an equity crowdfunding program – selling a security -- with no disclosure required. And no one in Colorado seems to be advocating for tossing out the disclosure requirements.
“I like laissez faire, but I also like for people to get into things with their eyes open and having an opportunity to evaluate all the facts,” said Jack Donenfeld, a Boulder-based securities lawyer and general counsel to Boomtown Accelerator in Boulder, which focuses on internet, mobile and software firms.
Attorney Herrick Lidstone, managing director of Greenwood Village law firm Burns, Figa & Will, has an alternative idea.
Businesses looking to raise small amounts – less than $200,000 – shouldn’t be mandated to use the intermediary. It should be voluntary, he said. It could cost a business $50,000 to run a crowdfunding campaign on an intermediary site and with fees, escrow and marketing costs.
“Every time you add a layer to the mix, you are costing them money,” he said.
There might be more small businesses trying equity crowdfunding if they could put up an offering on their own websites – like an investor page.
Rome said he wants equity crowdfunding to work and he’s open to adjusting some of the rules, which he said were designed to protect the investors.
Dakin said the rules and regulations have not been the main hang-up. The role of the Colorado intermediary was designed to be low cost – the intermediary cannot engage in marketing or take a stake in the business. Most businesses wouldn't have the infrastructure to handle the investments and keep up with the SEC rules.
"The largest issue is generally a lack of knowledge and a lack of systems available for people to use," he said.
But now there are two approved websites and the crowdfunding is ready for takeoff, he believes.
"I think we will get there eventually once people see success stories and see this as an alternative to the only choice they had before," he said.DT Updated an hour ago
New program will help businesses test the waters by building their crowd.
DENVER, CO—October 30, 2017 Invest Local Colorado has launched a special program to enable businesses, social enterprises and community projects build their fan base of supporters. This free program is targeted at the main challenge to successful crowdfunding – not having a ‘crowd’.
‘Crowd’ + ‘Funding’ = ‘Success’. In order for any organization to raise money through crowdfunding it needs a crowd. A crowd is a group of people with a common interest in the products or services of the organization, in the social causes that it may advance, in the community where it is located or any other strong reason to want the organization to succeed. Although most organizations will have more than one group of prospective supporters, these organizations do not have a crowd. Even though an organization may know a lot of people and are favorably viewed by their customers and community, these people have not been identified and organized to step up and participate in a capital campaign.
Invest Local Colorado will offer its Build Your Own Crowd (BYOC) Program for free. Participants will have an opportunity to identify and validate their crowds. Each organization will invite their supporters to join the Colorado Capital Club – an association of Colorado residents interested in financially supporting Colorado Main Street businesses. Each individual will declare their support for their favorite organization during the Membership application process. This information will be collected and shared with participants in the BYOC Program to help them build their crowds.
“Most businesses incorrectly assume that by standing on a stage and making a pitch or by listing on a crowdfunding platform, that people they don’t know will come to them and make an investment. You need a ‘crowd’ to raise funding. The failure to build a crowd in advance of a capital campaign is the single greatest reason for failure of crowdfunding campaigns,” said Karl Dakin, CEO of Invest Local Colorado LLC. “People only invest in businesses where they know the owners and a relationship exists between the business and investor. Our BYOC Program will help businesses create and manage those relationships.”
Participants in the BYOC Program may attend free workshops by the Local Money Marketplace where they will learn tools, techniques and systems for crowd building. As an extra incentive, Invest Local Colorado is offering to waive its standard $5,000 listing fee to any organization that can get 500 or more of their supporters to join the Colorado Capital Club and declare for that organization.
More information on the Build Your Own Crowd (BYOC) Program is available at the Invest Local Colorado platform: http://www.investlocalcolorado.com/raise-money. Organizations interested in participating in the program should contact Karl Dakin, CEO, Invest Local Colorado LLC at firstname.lastname@example.org.
West End Economic Development Corporation is working to offset the closure of the power plant and mines in the Paradox Valley of Colorado by supporting businesses in the new hemp industry.
Paradox Ventures has leased space from West End Economic Development Corporation in the old Nucla schoolhouse where it will extract oil from hemp plants grown this summer in Montrose County.
More information is available in this Denver Post article:
Invest Local Colorado LLC has launched its investment crowdfunding platform with a listing of a capital campaign by Paradox Ventures. This action raises a number of questions:
You may have heard of crowdfunding. You may even have participated in a Kickstarter or Indiegogo campaign. However, you probably have not invested in a Main Street business located in Colorado. This is a local business where you may shop, where one of your relatives may be employed and which pays taxes to support your schools, for your safety and for city, county and state buildings and roadways. Typically, your investments are completed through your employer where your money is put into a mutual fund representing a list of businesses whose profits may never come to Colorado.
Investment crowdfunding allows you to participate in the upside of a local business. Any form of investment has some degree of risk – ranging from very low to very high that you may not get your money back. This risk can be offset if it is a business where you shop. The business can offer you price discounts on their products or services that may be greater than the amount of your investment.
A local business can offer benefits to every resident of Colorado that are not available from a business that is outside of Colorado or outside of the United States. These benefits can be realized without making any investment at all. Simply by sustaining and growing, a local business contributes to the economic health of the community by hiring people and paying taxes. Some businesses actively support local charities, participate in community organizations and projects and serve to attract other businesses into the community.
Crowdfunding in Colorado is now possible through the Colorado Crowdfunding Act, a law passed in 2015 that we sponsored. It rolls back 80 years of securities laws and regulations that resulted in wealth discrimination. The result was that the 3% of the population (accredited investors) were making nearly 100% of the investment decisions that benefited only 2% of the businesses seeking capital. Local Money Marketplace PBC is dedicated to improving access to capital by improving Colorado’s capital eco-system.
Paradox Ventures is a new company that is just completed harvest of its first crop of hemp. It has entered into a lease of the old schoolhouse in Nucla, Colorado owned by West End Economic Development Corporation where it will be extracting hemp oil for use in a variety of healthcare products. http://www.paradoxpride.com These new jobs will help a community affected by the closure of the power plant and local mines. See the recent article in the Denver Post: http://www.denverpost.com/2017/10/27/montrose-county-west-end-revamps-rural-economy-with-hemp-less-mining-uranium-colorado-divide/
Instead of seeking money just from wealthy people who meet the definition of accredited investors, Paradox Ventures is seeking to raise up to $500,000 in money from ordinary people – any resident of the State of Colorado. A person may make an investment for as little as $500. For this financial support, Paradox is granting non-voting stock. In addition, they have teamed up with Ambary Gardens of Kittredge, Colorado to offer price discounts of 10% to 25% on the products Ambary Gardens will make with hemp oil (CBD) extracted by Paradox Ventures. https://ambarygardens.com/
Paradox Ventures has listed its capital campaign on the Invest Local Colorado platform. To learn more about Paradox Ventures, you may go the platform. http://www.investlocalcolorado.com/campaigns.
For a small annual fee of $10, you may become a member of Invest Local Colorado’s Colorado Capital Club where you can learn about how to financially support a Main Street business and you can invest in businesses like Paradox Ventures. Members of the Club will receive a free copy of our Investing in Main Street Workbook and will receive passes to Investing in Main Street Workshops.
Investment crowdfunding now gives you the capability to support those businesses, social enterprises and community projects in Colorado that you like, that you want to see succeed and whose success can help Colorado’s economy, particularly in those communities that are not experiencing the growth of Denver. Any savings on products or services that you buy and any possible return on investment just creates greater value.
If you are interested in the economic health of Colorado, you should consider all the places where you may shop over the next 12 months and ask yourself if you would like to help that business grow. Envision a future where you have a stake in a number of local businesses that know your name, value your opinion and appreciate your loyalty.
Investment crowdfunding is that powerful.
Local Money Marketplace PBC
Address:7148 S. Andes Circle, Centennial, CO 80016