Synopses & Reviews
Small businesses are the backbone of the American economy, generating eighty percent of jobs and half of GDP. They also create the foundation for healthy, diverse neighborhoods and strong local economies.
So why are we starving these vital enterprises?
The truth is, our financial and political system is stacked against small business. The stock market has become a vast, electronic casino that has abandoned any pretense of allocating capital to productive use. And community banks—a mainstay of small business funding—are an endangered species in a Too Big to Fail world. Don't look to the government for help, though: politicians at the federal, state, and local levels are often under the sway of deep-pocketed corporations. Meanwhile, Main Streets and downtowns everywhere are slowly dying.
But don't write them off just yet. In dozens of towns and cities across the country, an extraordinary experiment in citizen finance is underway. From Brooklyn, New York to Vernon County, Wisconsin to Port Townsend, Washington, residents are banding together to save their small businesses and Main Streets from extinction. And they are reaping rich rewards in the process. These citizens are at the vanguard of a grassroots revolution that journalist Amy Cortese calls "locavesting."
In Locavesting, you'll meet these pioneers and explore the often ingenious ways—some new, some as old as capitalism itself—they've come up with to take back their financial destinies from Wall Street and the corporate fat cats while revitalizing the communities they call home. Among other examples, you'll learn how:
Nine cops in Clare, Michigan saved a 111-year-old bakery and helped revive their downtown
As union protests engulfed the state capital, a new breed of cooperatives in rural Wisconsin pointed the way toward a more harmonious and prosperous way of doing business
"Crowdfunding" startups such as ProFounder, Funding Circle, and Grow VC are harnessing the Internet and social media to connect entrepreneurs with hundreds of small investors
A grassroots organization called Slow Money is mobilizing thousands of citizens to create new funding models for financing local food and agriculture
Companies from Ben & Jerry's to Annie's Homegrown have sold shares directly to loyal customers, bypassing Wall Street middlemen
And how communities as varied as Lancaster, Pennsylvania and the Hawaiian islands are working to bring back local stock exchanges
Forget credit default swaps and derivatives. This is the kind of financial innovation we desperately need. A source of inspiration and ideas with practical how-to advice, Locavesting is must-reading for small business owners, entrepreneurs, and investors looking for solid, socially productive alternatives to the Wall Street casino—and anyone who cares about the future of democracy in America.
How individuals and communities can profit from local investing
In the wake of the financial crisis, investors are faced with a stark choice: entrust their hard-earned dollars to the Wall Street casino, or settle for anemic interest rates on savings, bonds, and CDs. Meanwhile, small businesses are being starved for the credit and capital they need to grow. There's got to be a better way.
In Locavesting: The Revolution in Local Investing and How to Profit from It, Amy Cortese takes us inside the local investing movement, where solutions to some of the nation's most pressing problems are taking shape. The idea is that, by investing in local businesses, rather than faceless conglomerates, investors can earn profits while building healthy, self-reliant communities.
- Introduces you to the ideas and pioneers behind the local investing movement
- Profiles the people and communities who are putting their money to work in their own backyards and taking control of their destinies
- Explores innovative investment strategies, from community capital and crowdfunding to local stock exchanges
With confidence in Wall Street and the government badly shaken, Americans are looking for alternatives. Local investing offers a way to rebuild our nest eggs, communities, and, just perhaps, our country.
Praise for Locavesting
"Investing locally makes sense as long as you do it with your eyes wide open. And this book is a realistic up-to-the-minute exploration of the field. After all, it was the local community that invested in Ben & Jerry's—and it worked out pretty well for them."
—BEN COHEN, cofounder of Ben & Jerry's
"An inspiring look at what local businesses can achieve."
—JOSEPH E. STIGLITZ, 2001 Nobel Laureate
"Buy this book before the Securities and Exchange Commission (SEC) bans it! Locavesting demolishes the myth that the best investment options lie in the financial-doomsday machine we call Wall Street. Fasten your belt for a mind-blowing journey where you will learn about dozens of highly profitable community investment opportunities. Amy Cortese takes you on a breathtaking ride."
—MICHAEL SHUMAN, author of The Small-Mart Revolution and Going Local
We have witnessed the failings of an unfettered free market system, tallied in lost jobs, stagnant wages, rising inequality, and languishing Main Streets. Isn't it time for a backup plan?
Locavesting is a call to rethink the way we invest, so that we support the small businesses that create jobs and healthy, resilient communities. Just as "Buy Local" campaigns have found that a small shift in purchasing to locally-owned enterprises can reap outsized benefits for a local economy, so, too, can a small shift in our investment dollars. Amy Cortese explores the revolution in citizen finance taking root across the country, and shows how local investing can help rebuild our nest eggs, our communities and—just perhaps—the country.
About the Author
Amy Cortese is a journalist who has spent her career writing about business, finance, environmental issues and food, giving her a unique perspective on how these different realms are intricately linked. A former editor at BusinessWeek, her work has also appeared in the New York Times, the New York Times Magazine, the American, Mother Jones, Portfolio, Afar, TheDailyBeast.com, and many other publications. She lives in Brooklyn, New York.
Table of Contents
Preface: Starting Anew vii
Introduction: Cereal Milk for the Gods xv
Part One The Economics of Local 1
Chapter 1 Motherhood, Apple Pie, and Political Theatre 3
How We Are Failing Our Small Businesses
Chapter 2 Blue Skies, Pipe Dreams, and the Lure of Easy Money 19
Our Financial Legacy and its Unintended Consequences
Chapter 3 Buy Local, Eat Local . . . Invest Local 31
Reconnecting Investors and Businesses
Chapter 4 The Local Imperative 47
Leveling the Playing Field
Part Two Experiments in Citizen Finance 63
Chapter 5 The Last Real Banker? 65
Relationship Banking Is Not Dead – Yet
Chapter 6 The Biggest-Impact Financial Sector You’ve Never Heard Of 79
Community Development Loan Funds Reach Out to Individual Investors
Chapter 7 A Model to LIONize 95
How One Pacifi c Northwest Town Engineered a Quiet Revival
Chapter 8 Community Capital 105
It Takes a Village, or a Police Force, or Perhaps Some Farmers
Chapter 9 Pennies from Many 125
When Social Networking Met Finance
Chapter 10 Slow Money 147
Finance for Foodsheds
Chapter 11 From Brown Rice to Biofuels 159
Co-ops on the Cutting Edge
Chapter 12 The Do-It-Yourself Public Offering 181
The Allure of Public Venture Capital
Chapter 13 Back to the Future 199
The Rebirth of the Local Stock Exchange