Mobilizing Local Investors
It’s safe to say that local investing cannot happen without the participation of informed and motivated citizen investors. Approaching people to talk about money can be daunting. It can be hard to know who has money to invest, and difficult to broach the topic of investing without seeming like you are trying to sell something. One way to help with this is to introduce local investing as a part of a broader local economy initiative, like a “Buy Local, Invest Local” campaign that all kinds of citizens can engage with, not just people with wealth.
Start by reaching out to reputable, well-connected community members who share your values about supporting local small businesses and already have a track record with investing some of their money locally. Investors tend to know one another, so they can more easily recruit others to the cause. Often, the people who are most open to, and comfortable with, investing in local small businesses were successful entrepreneurs themselves. They already understand the small business environment, how to read financial statements and projections, how to evaluate management, and best of all, they may be open to mentoring the business people they invest in. These kinds of investors are also great because they can help inspire confidence in novice local investors who may not have entrepreneurial backgrounds.
Are you in a position to be a local investor? It’s far easier to “lead by example,” than it is to persuade others to do something new. Even if you can only invest small amounts, you can make a stronger argument for investing locally if you are doing it yourself, or at least starting to engage in the process. Generate some excitement, and new recruits for the cause, by organizing community outreach events to educate and attract new investors, and business showcases to connect investors with business people.