COMMUNITY CAPITAL 500

The first comprehensive snapshot of community investing in the U.S. points to increased diversity for start-up funding

October 2017

When seeking investors, business owners are increasingly looking to their communities for shareholders and lenders. With new legal models in effect, crowdfunding is growing into a serious funding alternative. Aggregation site Investibule has featured and tracked community investment campaigns over the past year. The COMMUNITY CAPITAL 500 summarizes key trends from the first 500 campaigns.

A great experiment in democratized finance is underway. Recent changes in federal and state laws have given all Americans the ability to invest in local businesses and ventures that they believe in. Until now, that natural impulse has been very hard for all but the wealthiest people to act on.

What happens when the financial gatekeepers are no longer a barrier? When communities can invest in themselves, rather than waiting for a white knight to come along? Will community capital live up to its promise to level the playing field?

We’re just at the beginning of this transformational shift. But the early results are encouraging.

Community Capital 500
Community investment activity is strongest in the northeast and California, however there is growing traction in the southeast and midwest.

Introducing the Community Capital 500

As an aggregator, Investibule has a unique view of this grassroots financial revolution. The CC 500—comprised of the first 500 offerings featured on the site—is a vibrant mix of businesses. It’s a snapshot of American ingenuity: everything from grass-fed beef to the newly legalized kind of grass, and from Main Street businesses to jetpacks (really!) There are family-run businesses, women-run start-ups, minority-led ventures, co-ops and B Corps, in rural and metro areas.

Century Partners in Detroit
Century Partners is raising $550K via a Reg A campaign (on rabble) to redevelop abandoned homes in Detroit.

Investibule takes a broad view of community capital that spans regulations, funding types and platforms—that includes offerings conducted under the federal JOBS Act, intrastate laws (where possible) and direct public offerings, as well as non-securities.

Investors can find equity, loans, revenue-share, rewards and pre-pay opportunities spanning more than 30 funding platforms that are open to all investors.

 

Community Capital 500
A wide variety of industries finds funding, with food & beverage garnering the most deals. Community investing also supports many smaller raises, including for clothing or retail.

Small Checks, Big Impact

Businesses are getting funded. 68 percent of the sample successfully raised at least their minimum funding goal as of mid-August, and another 12% still had time to go—a far better success rate than most businesses see when seeking angel or venture funding, or even a bank loan.
All told, the Community Capital 500 raised over $52 million from more than 72,000 investors—an average of $161,000 and 234 investors per funding campaign. Offerings ranged from small Kiva loans to $1 million+ crowdfunding offerings.

The overall picture is clear: community capital is financing smaller businesses and ventures that otherwise might fall through the cracks, via small checks, money from the many.

Who's Getting Funded
While businesses owned by women and minorities are still underrepresented, in community investing they are more likely to get funded.

Social Justice

While underrepresented as a group, women and minority-owned businesses outperformed the average: 76% of women-owned and 73% of minority-owned ventures were successfully funded.

Spotlight Girls
Spotlight Girls in Oakland raised $62,500 from 40 investors to expand their girls’ empowerment camps.

Community capital is helping entrepreneurs like Lynn Johnson and Allison Kenny of Spotlight Girls expand their empowerment programs for girls. It’s helping Native American Natural Foods restore buffalo to the Great Plains and a livelihood to the Lakota people. And it’s helping Century Partners extend the Detroit revival to overlooked neighborhoods.

Tanka bars
Native American Natural Foods pioneered the bison & fruit snack market. Now its raising funds to expand.

Community capital is bending towards social justice, towards building a financial system that serves all people, not just those with the right connections and collateral.
When community members share in their success (or failure, as may be the case), this new form of funding can help build community wealth and keep profits local.

If we want to change who gets funded, we need to change who does the funding.

Building the Movement

The early data is encouraging, but many challenges remain. How to raise awareness and educate investors and entrepreneurs about these new funding tools? How soon can we go from 500 offerings a year to 5,000? How to get community capital to benefit underserved communities? What role can foundations, local governments and anchor institutions play?

Interested in hearing more? Investibule is sharing more insights and data with impact investors, foundations, and community change agents.


Investibule is a Public Benefit Corporation created to increase the flow of capital to diverse entrepreneurs and help build community wealth. It was founded by two pioneers in the community capital field: Amy Cortese (journalist, Locavesting) and Arno Hesse (Credibles and Slow Money). [contact]