Let’s be honest for a moment. When we eat out, 99% of us (disclaimer: fake stat we made up) don’t go beyond leaving a standard tip if we were impressed with our meal and service. And for places like auto shops, there’s a slim chance anyone leaves a tip at all. Say their service or product blew us away – maybe we go online and leave a 5-star review.
Then that place closes down.
“Hey, that sucks, I had so many great memories there,” you might exclaim while rapidly googling for a new favorite spot.
Such is the Circle of Life Consumerism. But what if you’re a loyal and invested customer?
Rewind to that 5-star review.
What if you could do more? What if you could give them the leg up they need to survive and still have potential returns?
It’s curious, isn’t it? Investing is often touted as the end-all be-all; but for most people, it ends at Wall Street.
We’re emotionally invested in our communities, yet we’re financially invested in Wall Street.
Enter Reg CF.
Go beyond the 5-star review with regulation crowdfunding, or Reg CF, (we prefer to call it “Local Investment Crowdfunding”).
You might be wondering if Reg CF isn’t some new start-upy fad, but it’s not. No, no, it’s been around for centuries. We time-traveled a couple weeks ago, click on the Flash icon below if you missed it. We’ll take you way back in time. And if you need more convincing, here are Reasons to Invest Local with Regulation Crowdfunding.
So, you’re convinced. You love local, you want to diversify your investments and you’re passionate about supporting the place you love, but how? How does one go about investing in small businesses? Since that’s the title of this post, congrats, you’re in the right place.
It’s a pretty easy process. In fact, it’s three steps. We’ll speak specifically from the Vicinity standpoint, since, you know, that’s who we are. Take careful notes:
Step 1 – Create an account.
Step 2 – Choose an investment opportunity.
Step 3 – Invest.
Simple.
But how do you decide which investments to make? That’s a tough question because it depends on your motives. You will want to consider your values. Going for the crazy stuff? That’s cool, do it. Going for a good story? We all love one. Trying to see regular cash disbursements? Pick a rev share deal, and cash 👏 those 👏 checks (if the business continues to succeed, that is – there are always risks in investing).
Read the story behind each business you’re interested in. Note the team involved and their bios: do they have the right experience? Are they passionate? Articulate?
Next, review common questions they get and ask any additional ones you have. Asking questions is a brilliant way to get a feel for the team behind a company based on their answers.
For many people, a personal connection to their investments is the fun part, but what matters next is looking at the financials and documents the business provides. People who are analytical (like our very own Co-Founder Josh Rollins) will love this section because it’s where you dig into the meat and potatoes of the company’s current financial state and potential.
Finally, look at the risks. Each business is required to disclose these, and while you’re not required to read them, neither are you required to check the forecast before leaving the house….considering the risks is the responsible way of investing in local shops and small businesses. While they can’t predict the future, at least you’ll better understand what you’re getting into.
To recap:
- Create an Account
- Choose investments
- Invest
It’s really that simple. And did we mention you can invest with as little as a couple hundred dollars? You don’t have to be an accredited investor. So if you…
- Want equity in an investment property near you,
- Want to invest in a local business,
- Want to invest in startups,
Then consider Reg CF as an option.
Now, if you’re a business owner, a caveat here is that you do have to run a successful campaign. But with the right marketing and strategy, that shouldn’t be a roadblock!
But what does all this look like?
To break it down, the basic flow looks like this:
What does investing through the platform cost you?
We charge nothing upfront and only get paid when you do – we receive 1% of the returns paid back to investors from the business. For business owners, it’s a standard 8% charge upon completion of a successful raise campaign.
If you need more specific help, shoot us an email at [email protected] and we’re happy to answer questions.
And if you’re ready to take that step, be cool and join our early bird waiting list by emailing [email protected]. We will send you exclusive updates and make sure you’re kept in the loop regarding investment opportunities through Vicinity Capital. Sign up here to join our mailing list and get all the latest info from Vicinity.
That was like the email solicitation Fists of Fury. We promise it’s all worth it!
