The local first movement has a new frontier: locavesting.
Friday’s stronger than expected jobs report showed several indications of economic growth. Every sector grew, including construction, manufacturing, and agriculture. Image what would happen if we could actually drive investment capital to Main Street! One way to make that happen is embodied in a term I heard for the first time yesterday: Locavesting.
David Fisher, of Maui Venture Consulting, talked about locavesting at the TechConKona business and technology conference, keynoted by Paul Hawken. Mr. Fisher said that there are many ways we can shift our thinking to help local businesses get started, but much of it goes nowhere without the financial backing.
Traditional investment channels like venture capital and bank lending is not typically available to startups, and so during a challenging economic transition period, when everyone knows how critical it is to get new businesses started, it is essential to know how to shift money into those startups. Fisher rattled off a list of places where this capital can come from, including local angel investor networks, personal credit, and local stock exchanges, but said that crowdfunding will continue to play a big role.
According to GreenBusinessOwner.com‘s interview with Dr. Kevin Danaher, co-founder of the Green Festivals, lack of access to adequate capital is the #1 challenge faced by entrepreneurs. GBO produces a nice downloadable paper on the subject, including a top ten avenues for seeking capital, and a series of time tested principles for getting there.
Fisher and others are working to resurrect a local stock exchange in Hawaii. The former Hawaii state stock exchange in Honolulu helped connect local investors with local businesses, but closed in 1976. It just may be time to bring local stock exchanges back. Fisher is banking on it.
Stock exchange photo courtesy of Shutterstock
