LEARN:: On creating opportunities to invest in local businesses.

We were able to get the scoop from Mr. Michael Shuman who was kind enough to answer a few questions for the Princeton Scoop about his upcoming workshop and why the Princeton community should attend.

BIGGEST TAKEAWAYS FROM THE BOOK: 

Over the past dozen years, since publication of Going Local in 1998, I’ve traveled around the country giving talks – almost one per week – to convince communities about the importance of nurturing locally owned businesses and about their growing competitiveness.  The Small Mart-Revolution, published in 2006, enumerated more than a hundred tools communities were using to measure “dollar leakages,” to promote local purchasing and investing, to create business alliances, to support local entrepreneurship, and to enact policies consistent with these goals.

What I’ve gradually come to appreciate is that the biggest obstacle to expanding local business and reaping the consequent economic benefits – by far – is capital.  Sure, getting your checking accounts into local banks and credit unions matters, as the “Move Your Money” Campaign has highlighted, is an important step.  But most Americans do not appreciate that they have four times more money in long-term savings in stocks, bonds, mutual funds, pension funds, and insurance funds.  And unlike our short-term money, perhaps a third of which is local right now, our long-term money is virtually 100% invested in Wall Street and Fortune 500 business.  For example, not a single one of the 7,500 mutual funds in the United States invests a penny in local business!

Even though local businesses represent roughly half the U.S. economy, by jobs and by output, even though these businesses are increasingly competitive, even though there’s growing evidence that these are the only businesses that create new jobs—we have systematically shut them out of our investment system.  At a minimum this represents a profound “capital market failure,” in the dry nomenclature of economists.  But more importantly, it represents a legal system framed by Wall Street and for its own benefit.

Over the past year, a remarkable coalition has emerged – including Tea Party Republicans and Occupy Wall Street Democrats – to overhaul this system and make it easier for the 99% of us who are not wealthy (“unaccredited investors”) to invest in the 99% of all businesses that are small.   Crowd-funding bills are working their way through Congress that effectively will begin to legalize local investing.

Two years ago, I could see the hunger for this field in audiences I was speaking to across the country:  “How can I invest in businesses in my community?  How can I move my pension funds?  What are my real options?” To begin providing answers to these questions, I entered a partnership with the Post-Carbon Institute to write a book on local investment.   My colleague Kate Poole (a recent Princeton graduate) and I interviewed more than three dozen pioneers in the field to create a map of the field that built on the excellent books in the field like Woody Tasch’s Slow Money and Amy Cortese’s Locavesting.

But our real purpose was not just to write a book but to teach people how to use it.  Hence this workshop.  The biggest take aways from the book and the workshop are that:

·         Local investment is key for local prosperity.

·         Local investment is becoming increasingly profitable.

·         Local investment is becoming possible, as crowd-funding reforms take shape and new investment techniques spread.

 

BIGGEST TAKEAWAYS FROM WORKSHOP: 

Workshop attendees will learn specific answers to the following questions:

·         What are the arguments for local investing?  What are risks?  How can those risks be mitigated?

·         What are they ways that local banks and credit unions can help?  For example, what are the new kinds of certificates of deposits they are developing to increase lending to local businesses?

·         How can cooperatives move member money into local investment?

·         What’s the status of  Department of Treasury-designated community development financial institutions (CDFIs), and how can they be tapped for local investing?

·         What are the benefits of creating a public bank like North Dakota’s?

·         How have small towns, like Fairfield, Iowa, become hot beds of local investment and entrepreneurship?

·         How can low investors make use of crowdfunding sites like Kiva, IndieGogo, Prosper, and Kickstarter?

·         How are businesses avoiding securities laws through the creative use of pre-selling?

·         How did businesspeople and investors in Port Townsend, Washington, create the Lion Investing Opportunities Network (LION) that has mobilized more than $3 million for local businesses in a town of 10,000?

·         What are ways that small businesses can “go public” on the cheap?

·         What are the prospects for creating local stock exchanges?

·         How can a community create a revolving loan fund or an investment club that serves local businesses?

·         What are ways you can localizing your money through better investments in your home, your neighborhood, your food system, and your energy grid?

·         How can your community get started with all these ideas through self-directed IRAs?

By the end of the day, workshop participants will have a fundamentally new way of thinking about their world, their community, and their money.

The Community Investing Workshop with Michael Shuman will be held in the Carl A. Fields Center, Princeton University on Tuesday, March 13, 2012 from 9AM to 4:30PM. To register for the workshop it’s $75 per person for PMA member businesses and $100 per person for non-members. After filling out your registration form and paying a minor fee, you can work with Mr. Shuman to find how to invest in community and watch it grow economically. And don’t worry, lunch is included in the registration fee.

For the registration forms and more information go to http://princetonmerchants.org/events/a-day-long-workshop-with-michael-shuman/ 

By Gabriela Castelan for PrincetonScoop


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