Capital Communities have existed in one form or another for a long, long time. Therefore, the creation of new capital communities may be incorrectly viewed as just more of the same. Largely, I want to reject this perception. This rejection will be demonstrated by who may be a member of a capital community, why a person may become a member and how they can act in collaboration with other members to do great good within their communities.
Anyone may join a capital community. No one is barred by reason of what work they do, by how much money they make or their personal/individual reasons for becoming part of a group. In the past, laws and regulations served to result in groups comprised only of wealthy individuals – accredited investors. This result may have been caused by a requirement that each individual invest cash and/or the amount of cash required was high ($1,000, $5,000 or even more).
A capital community may invest in any business, social enterprise, charity or community project. As individual members or as a group (some restrictions still apply). The organization receiving the investment must still conform to state or federal securities laws, but with investment crowdfunding almost any organization is eligible. Depending upon the different crowdfunding laws, there are still some types of businesses that are barred.
A capital community may invest any type of resource. An investment or offer of financial support is not limited to cash. It may include money, time, buildings, equipment, introductions or other items of both monetary and non-monetary value.
A capital community is expected to focus on matching local resources with local organizations. It may support an organization at a state or national level.
With these expanded and less restricted parameters, who may join a capital community?
It is expected that members will fall into one or more of four categories:
A capital community is like a microcosm of a community it represents: a geographic area, an industry or a social cause.
In addition to the capital community itself, a ‘Supporter’ may also include the local chamber of commerce, the local economic development center, civic organizations or others concerned with the general welfare of a community. Supporters may be hyperlocal (less than a county or city), a city, a county or an entire state or region.
Seekers (anyone looking for capital) may include any business, social enterprise, charity or community project that can generate sufficient revenues from receipt of capital investment to repay the capital and generate a minimum average return on investment.
Sources of capital include not only banks, angel investors and venture capitalists, but also customers and employees of a business, vendors and suppliers, distributors and retailers, taxpayers within the community, foundations and social causes. It is critical that Sources include individuals and is not limited to organizations and institutions.
Services includes any individual or organization that provides talents and knowledge in the planning and implementation of capital campaigns. Services include marketing, IT, legal, accounting, banking, crowdfunding platforms.
An optimal capital community may include two or three Supporters that are representatives of the community, a number of Services (it has been suggested one of each type necessary to complete a capital campaign), a number of Sources (again a cafeteria of common types) and a number of Seekers.
The capital community needs to be big enough to support a continuing stream of capital campaigns and not so large that everyone doesn’t know everyone. It is anticipated that each individual’s commitment to support any individual capital campaign will be influenced by the commitment of others within the community. To keep a sense of ‘everyone knows your name’ while getting big enough to address the needs of the community, it may be necessary to create chapters or ‘team’s that work on specific campaigns.
There is a substantial body of published knowledge available on small group management that will speak to a need for good leadership, common vision or shared values, and each individual’s willingness to make a significant contribution to the group. Education will be important as individual members improve their skill sets within this more broadly defined capital community.
Colorado Community Capital PBC is working towards establishment of a large number of capital communities. Knowledge gained in this effort will be shared through blogs like this one or at briefings, workshops and conferences to be presented in the near future. http://www.coloradocommunitycapital.com
Karl Dakin, President
Colorado Community Capital PBC