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  • November 28, 2016 10:35 AM | Anonymous

    A key question in creating a capital community or any association is ‘how big’.  This question must be answered in several ways: (1) what is the scope of the community, (2) how many members should be in the community (3) how large should be the activities or programs of the community. 

    This question is now being raised as work is underway to establish new capital communities on topics ranging from greenhouses to transportation.

    Answering these questions is critical to the success of the community.  Too large may make the community unfocused, lacking in member-to-member engagement and incurring costs in operations that push fees too high.  Too small may not generate enough interest, result in cliques that inhibit new member participation and incurring costs in operations that push fees too high.

    The scope of a capital community refers to which organizations can seek support in raising capital and those that cannot.  In the very short time since forming the Space Capital Community (https://www.meetup.com/Space-Capital-Community/), questions have been asked, “Does this include drones, geospatial mapping, technologies that have both a space application and a terrestrial application, only private commercial flights or also government programs, etc.?”  The short answer is: all of them. 

    This is the challenge.  Bigger is not always better. 

    The ultimate goal of a capital community is to help selected organizations successfully raise capital.  This goal is best achieved if each member of the community has a sense of camaraderie with most of the other members.  This feeling of belonging will be diminished if there is not a high degree of commonality.  As an example, investing in drones will not create the same feeling as investing in a Mars habitat.  This is not an insurmountable barrier as is demonstrated by political parties with widely divergent views.  However, there still must be a core principal, belief or cause that must be shared amongst the members.

    Simply raising money is not enough.  It is expected that commonality of members will be achieved when a particular organization (business, social enterprise, charity or community project) actually brings their product or service to market as a consequence of raising capital.  Members will identify with the outcome, not the process.  However, the process of working together is essential to achieve the outcome.

    It may be assumed that the more members within the capital community, the more that it can accomplish.  This assumption is only true if enough members work together to help an organization successfully complete their campaign.  If too small a percentage of the members participate, the goal of the capital community will not be met.   

    As an activity or program, a capital community may want to establish an investment fund or a financing fund.  It may be assumed that the more money in the fund, the more organizations that the capital community can be support.  However, large funds typically make large single investments.  Small investments become rare.  An inability or failure to make small investments may defeat the purpose of the capital community.  A capital community may create one or any number of different funds of different sizes to target and support organizations that fall within the scope of the capital community.

    The larger the fund, the more that it may benefit from dedicated and professional managers.  However, the use of professional management may cause members to feel out of touch in that they are not engaged.  In addition, if all a capital community accomplishes is outsourcing of investment decisions, the members are not sharing their knowledge, contacts or other resources.

    At this point, there is no right answer.  We are in an era of experimentation.  As an example, the Space Capital Community may find that the topic of ‘space’ is too large and that it may be necessary to split into two, five or dozens of other capital communities.

    It is anticipated that a very large number of capital communities will be formed under hundreds of different topics.  Collectively, these capital communities will create a new capital marketplace where local money can be better matched with local businesses.  In effect, the capital industry is being decentralized with greater participation and control by average individuals.

    The lessons learned from forming these capital communities will be shared at Comcap Colorado (http://www.comcap.us/colorado) to be held on February 1, 2017.  Registration is now open for on-site participation and remote viewing.

    Karl Dakin, President

    Colorado Capital Community PBC

    karl@coloradocapitalcommunity.com

    http://www.coloradocapitalcommunity.com


  • November 25, 2016 12:22 PM | Anonymous

    Company contact:

    Karl Dakin, President or

    Wayne Dicksteen, Director – Space Capital Community

    Colorado Community Capital PBC

    Main: 720-296-0372

    Karl@ColoradoCommunityCapital.com

    http://www.ColoradoCommunityCapital.com

    A Capital Community has been established to support organizations in raising capital within the space industry.

    A conference will be held to create and foster ‘capital communities’ across the State of Colorado to advance Colorado’s capital industry ecosystem. 

    DENVER, CO—November 28, 2016—A working group has been established by Colorado Community Capital PBC to support businesses,  social enterprises, charities and community projects in raising capital within the space industry.  https://www.meetup.com/Space-Capital-Community/.

    An exploratory meeting was held at the DaVinci Institute (https://www.davinciinstitute.com/) in Westminster on November 14, 2016 where participants received an invitation from Karl Dakin, President of Colorado Community Capital PBC, to establish a space industry themed ‘Capital Community’.  Participants included a book author, a developer of a Mar’s colony theme park, an astronaut tourism adventure, a developer of STEM education, an astrophysical observation center, a manufacturer of transportation vehicles, business consultants and a financial advisor.

    Upon completion of the discussion, participants viewed the first episode of the Mars six-part series produced by National Geographic featuring Elon Musk and the efforts of SpaceX to put people on Mars.  http://channel.nationalgeographic.com/mars/

    The first program of the Space Capital Community will be held on December 19 at the DaVinci Institute, 9191 Sheridan Blvd #300, Westminster, CO 80031 at 6 pm.  It will feature a panel review of the International Association for Astronomical Studies, a charity, and its intent to raise capital to fund development for new STEM education programs and the construction of the Starhaven Observatory in Strasburg, Colorado.  It will be followed by a presentation on a capital source and discussion of future activities for the Space Capital Community.

    “The programs of the Space Capital Community will be more like the peer to peer programs of 1 Million Cups and not at all like Shark Tank.  We are taking the collective knowledge of a custom crowd and focusing it on organizations that need help in raising capital.  As a Capital Community, we will all get smarter every time we help one of our member organizations successfully raise capital,” said Wayne Dicksteen, Director – Space Capital Community.

    “A Capital Community acts like a volunteer fire brigade that comes together as needed, when needed, to support the capital campaign of an organization within their community.  A Capital Community may be framed as a geographical area, an industry, a social cause or other topic in which the members of the Capital Community have common interests,” said Karl Dakin.

    Access to capital remains a key challenge to starting and growing businesses, social enterprises and community projects in Colorado.  Without capital there is less innovation, fewer new products and services and fewer jobs – all important factors in strong, sustained economic growth. 

    With new state and federal crowdfunding laws and regulations, everyone is now enabled to invest in and provide financial support to a Main Street organization.  The United States passed the JOBS Act in 2012 and the State of Colorado passed the Colorado Crowdfunding Act 2015.  These changes enable public promotion of a capital campaign and the unlimited participation by non-accredited investors that comprise 97% of the population.

    Space Capital Community (a temporary working name) will recruit people interested in the space industry, space travel and commercialization to come together.  These people may contribute their time, their network of contacts and their cash to advance organizations in this industry.

    Over time, this group may elect to establish its own legal structure, either for profit or nonprofit, that may act as an association, an extension of an existing space advocacy group, an investment club or an investment fund.

    The formation of the Space Capital Community is a step forward in the evolution of a capital industry ecosystem in Colorado.  The design, development and operation of Capital Communities are the focus of the upcoming ComCap Colorado conference that will be held on February 1, 2017 at the University of Colorado South Campus.  http://www.compcap.us/colorado.

    ###


  • November 21, 2016 8:45 AM | Anonymous

    In preparation for the upcoming ComCap Colorado conference (http://www.comcap.us/colorado) on community capital, a pilot ‘capital community’ was formed by Colorado Capital Community PBC to support to support businesses, social enterprises, charities and community projects in raising capital within the space industry.  https://www.meetup.com/Space-Capital-Community/.

    A small group of people were invited to meet and discuss the concept of a ‘capital community’, how it may serve their personal goals, what such a group might accomplish, the activities of the group and what type of business structure might best suit the group.

    Participants were asked if a ‘capital community’:

    • ·         may help their organization raise money, whether it may help them in making investments, to enable them to participate in capital campaigns for different organizations and/or to solve a community problem;
    • ·         would serve a member to make money, to have fun, to experience adventure, to do good, to build a stronger local economy and/or to share with others having common interests
    • ·         would engage in activities of acting as a distributor of existing information, in the development of new and more detailed information, in providing advice to investors, in providing advice on how to raise capital, in giving organizations an opportunity to tell their story, in presenting educational programs and/or in supporting organizations in conducting capital campaigns;
    • ·         should choose no business structure or structure itself as an association, as an investment club, as a fund to finance capital campaigns, and/or as an investment fund.

    Participants were also asked how much, if anything, they may commit in terms of dollars, time and network contacts to support the ‘capital community’ or to support an organization raising capital.

    The small number of responses do not serve as hard data, but indicated a strong interest in working together to support organizations seeking to raise capital. 

    With this information, as a first stage in development of the ‘capital community’, a Meetup group was formed by entering into a six-month service agreement.  http://www.meetup.com

    A temporary or working name was chosen: Space Capital Community.  This highly descriptive name and associated key words and bio will improve the ability to promote the existence of the capital community within Meetup’s automated promotional services.  Feedback will be gathered from members of the capital community to select a formal name that is suitable for novelty, differentiation, trademark and buying a URL.

    Work is underway to customize this platform with documents, graphics and other information that is helpful in encouraging people to join the capital community and providing value to members. 

    More information on member preferences is now being collected at the Space Capital Community Meetup through ongoing polling (an included service of Meetup) of members.  Based upon information received in the initial survey, monthly membership dues have been set at $20.  This amount will be monitored to make sure it is not too high.  As additional activities and benefits are achieved, this amount may be increased.

    Work is underway to design the first program to be held in December.  At present, the program will include three components:

    • ·         Organization Presentation – an organization seeking capital will be recruited to make a presentation where they will share details on their capital needs, their stakeholder analysis, and their capital strategy within the framework of their mission and business plan.  This presentation may be critiqued by an expert panel and/or peer reviewed by the audience
    • ·         Capital Source Presentation – a source of capital (investor, fund, foundation, government agency, etc.) will be recruited to make a presentation on how organizations may access their capital.  An actual or fictional organization will be walked through the application/pitch and approval/funding process.
    • ·         Capital Community Building – existing and prospective activities of the capital community will be reviewed so that action may be taken to improve the capital community.

    Progress to this point is revealing a number of activities that will fill gaps within the capital industry ecosystem in gathering and organizing information on different capital sources and the establishment of ‘experts’ as capital coaches on where and how to access capital.

    Karl Dakin, President

    Colorado Capital Community PBC

    karl@coloradocapitalcommunity.com

    http://www.coloradocapitalcommunity.com


  • November 07, 2016 9:19 AM | Anonymous

    As progress continues at the federal and state level to roll back regulations restricting small businesses from raising capital, the embracement and support of investment crowdfunding has met with reactions that may seem curious or confounding to both small businesses and potential non-accredited financial supporters.   The industry that matches capital seekers with investors has its own culture: a variety of traditions, customers, expectations and dialects that has arisen over the history of humankind.

    One of the key cultural distinctions within the capital industry is whether an investment offering is viewed as an opportunity to share the rewards of a particular venture or whether it is viewed as a just another building material.

    In the first perspective, an entrepreneur is seeking capital to advance an idea, produce a new product or service or to grow the business in which the opportunity has been structured.  There is a clear risk in making this capital available and there may be a reward if the venture should prove successful.  In structuring the offering, the entrepreneur is balancing the value of the different contributions of resources to the business over time when the risks of the venture are completely different.  The intent is to pay back the investor their investment with a return that is appropriate. 

    Reasonable people can and will disagree over what is an appropriate allocation of success.  Less reasonable people will attribute all of the success to themselves and may treat investors as ‘lucky’ to be extended the privilege of putting their money at risk with such a cool entrepreneur.  Still others may want to keep all of the money and may even use it inappropriately for their personal benefit.  This is one of the reasons that the character and integrity of the management team remains the single most important factor in making an investment.

    Crowdfunding presents new ways to allocate success to new investors – individuals without wealth who are classified as non-accredited.  In addition, crowdfunding presents an opportunity to provide non-monetary rewards to investors: status, privileges, benefits, shared values and achievement of common goals.

    In the perspective of a person who treats capital as a type of building material, crowdfunding will often be rejected.  An entrepreneur who is seeking to build a business to flip it by selling to someone else, will look at the price and time to conduct a crowdfunding campaign as more expensive than a simple loan or single large dollar investment.  Any additional price paid for capital or any additional time expended in raising the capital is viewed as a direct impact on the total cost and the projected profit of the project.

    There has been significant discussion of crowdfunding as giving the average person an opportunity to invest in projects with high rates of return – just like wealthy people do.  However, there is no incentive to an entrepreneur to engage in crowdfunding when he or she has other options for money and money is treated solely as a cost of doing business.  So, opportunities for the average person to ‘get rich’ through investment crowdfunding will be limited.

    High risk opportunities will frequently be presented within crowdfunding where entrepreneurs have been unable to obtain money from other sources.  Some of these opportunities may also have the potential for high rewards and some of them are will just be bad opportunities.

    The general rule of raising capital is to acquire money as quickly as possible at the lowest price with the least effort.  Investment crowdfunding will commonly not win this foot race with other sources of capital.  Increasing the price of money, the time to raise money or the complexity of raising money will result in greater risk of failure.

    The general rule of raising capital should be re-examined where the conduct of a capital campaign serves to increase sales.  The greater good of the venture can be achieved by raising money from existing and future customers leading to more sales.  In this situation, spending the money and taking the time to engage in investment crowdfunding may be justified.

    This topic and related issues on community capital and investment crowdfunding will be the subject of workshops presented by Colorado Community Capital PBC at Colorado Lending Source on November 17 and December 15.  http://www.coloradocommunitycapital.com/events.   In addition, the first ComCap Colorado conference on raising money for Main Street organizations will be held on February 1, 2017.  http://www.comcap.us/colorado.


  • October 30, 2016 3:12 PM | Anonymous

    A study just released by the Kaufmann Foundation entitled CHANGING CAPITAL: Emerging Trends in Entrepreneurial Finance reveals data on five shifts on who, where and how entrepreneurs find money.

    http://www.kauffman.org/~/media/kauffman_org/research%20reports%20and%20covers/2016/emerging_trends_in_entrepreneurial_finance.pdf

    The Kaufmann Foundation is, in my opinion, the leading foundation in the world dedicated to entrepreneurs.  The Foundation has previously published some of the most detailed analysis of where entrepreneurs raise money and one of a few to recognize the negative impact on entrepreneurs of the Dodd-Frank legislation.  This report, relying too heavily on easily accessible information, is top heavy on information on venture capital and angel investing.

    The first trend is that venture capitalists are establishing more mega funds and small funds.  The smaller funds are making individual investments of small dollars.  Although using the same business model, the significant differences between the high and low end of this spectrum suggests that maybe a new class of funds is evolving.  It is not clear whether these funds are new players in this segment of the capital industry or if this is a change in strategic focus for some existing players.  In the past, increases in first round and small dollar raises has been an indication of too much money and not enough deals – forcing venture capitalists to look outside of their normal comfort zone.

    The second trend is the growing use of online platforms – investment crowdfunding.  As has been discussed in other articles, nearly all of the early stage growth in investment crowdfunding has been by accredited investors with a very high percentage of deals in real estate.  I expect this trend to accelerate with a quickly growing segment – an ultimately the largest segment – will be comprised of businesses offering consumer products and services receiving investments from non-accredited investors.  This growth may become even faster as secondary markets / local exchanges are established.

    The third trend is the growing number of deals that are occurring outside of the ‘usual’ places.  Several possible causes for this trend are identified.  Again, established venture capitalists may be looking outside of their backyards for deals that have less competition for money.   Product crowdfunding, specifically Kickstarter, is mentioned.  This type of crowdfunding is not so much a shift away from institutional money, but a completely different source of money – the average person.   With all of the new options for investment crowdfunding, the next study should examine whether people are pulling money out of their retirement funds and directing them to Main Street businesses.

    The fourth trend is the continuing expansion in women led businesses and their growing success in obtaining capital.  Historically, women have experienced parallels in raising money to obtaining comparative salaries – lower dollar amounts and taking more time to raise money.  Some of this trend may be the number of new programs, projects and funds that are dedicated to women.  Most of these new sources of capital are comprised of and managed by women.  Venture capital and angel investing is less and less a ‘man’s game’.

    The fifth and most important is experimentation in new capital models.  ‘Fintech’ also known as ‘financial technology’ has become a buzzword.  Block chain technology threatens to disrupt payment processing while improving privacy and reducing cybercrime.  Investment crowdfunding, a segment of the capital industry that is growing all by itself, is mutating into all kinds of new capital hybrids.  Investment crowdfunding is blending with product crowdfunding – creating a potential for customers to become the largest source of funding for small business.  Crowdfunding is now coming in flavors of factoring, inventory financing, financing of funding, and peer to peer lending.  Combinations of capital – capital stacks – show great promise to follow a business from startup to profitability.

    All of these changes in the capital industry will give businesses, particularly startups and small businesses, a much larger selection of funding option.  It is not expected that these changes will replace any of the current players, but simply extend the industry in different directions.

    This topic, with a focus on 'community capital', will be the subject of the upcoming ComCap Colorado conference on February 1, 2017.  http://www.comcap.us/colorado.

    Investment crowdfunding using a consumer/customer approach will be presented by Colorado Community Capital PBC at Colorado Lending Source on upcoming workshops on November 17 and December 15, 2016. http://www.coloradocommunitycapital.com/events


  • October 24, 2016 7:03 AM | Anonymous

    Crowdfunding requires a ‘crowd’ to obtain ‘funding’.  Recognition of this market truth raises the question of “How do I build a crowd?”  Crowd building can take several forms and different approaches.  One of these is creating a crowd of ‘fans’.  Taken from the word ‘fanatic’, a ‘fan’ is a person who follows your work, holds you in a special form of adoration or respect and commonly likes to describe himself or herself as having an affiliation with you.  We have all seen sports fanning wearing the apparel of their favor team.

    So, how does this work for a business, social enterprise or community project?  I have adapted some ideas from my book ‘Everyone’s an Expert’ that I co-authored to address the need for people to distinguish themselves in today’s world of too much information.  With the Internet and the seemingly infinite amount of social media with posts and videos about almost anything, if you do nothing you can hide in plain sight.

    For an individual, I recommended attaining the status of an expert.  I recognized that people who authored a book, spoke in from a room and who taught a class were accorded higher status.  So, I recommended that you write (books, blogs or letters to the editor), that you tell your story in front of different audiences (civic, professional or business organizations) and that you teach others what you know (webinars, workshops or classes at educational institutions).

    All of these things have to be done in public where they can be seen and heard.  I have stacks of hard drives with studies and projects that I worked on that nobody knows exists.  Therefore, people cannot care, be interested and become a fan of mine on this work.  This often happens with social media if you have no one visiting your website or who are not members of your online group.  A story has to be told at an ‘Internet’ crossroads like a billboard on the highway where everyone can see it.

    Creating a fan requires engagement.  You have to ask their opinion (and listen to it and possibly act on it by making a change in your product or service).  You have to create opportunities where they can demonstrate their loyalty and you recognize that loyalty.  Holding a sale just for VIP customers is one form of this action.

    Creating a fan requires quality.  Fans want to look good.  They will not tell their friends and family and associates within their network about you if you make them look bad.  Fans are a reflection of you.

    Fans want appreciation.  They want opportunities to ‘belong’ to a group.  This may a special card, an invitation to a special event or just a word of thanks.  Fans are looking for something that sets them apart just as you and your organization want to be viewed as something special.

    Fans want to participate.  They are looking for some activity that goes beyond the shopping experience.  This may take the form of a concert, an introduction to a celebrity or joining forces to support a local charity.

    All of these recommendations act to elevate your fans ‘above the crowd’ where they enjoy a sense of pride and camaraderie that is associated with your organization.

    All of these recommendations require work.  Loyalty does not come cheap.  It is necessary to interact with and react to your customers, suppliers, resellers and others who know of and benefit from the success of your organization.  This work is time consuming and can become overwhelming.  Techniques, methods, and systems are needed to impact all of your fans with a single action.  You must be efficient.

    You must be visible.  You must use your own channels of communication and any available social media to tell your story and your interaction with your fans where everyone can see it.  Brag on your fans in public.  Give them the tools to retell your story and their role in it.  The best way to build a crowd is to borrow everyone else’s.  Fans will not only lend you their crowd, but drive you to their crowd in their own car if you give them the opportunity.

    This topic and related topics on investment crowdfunding will be presented by Colorado Community Capital PBC on Thursday, October 27 or November 17 or December 15 at workshops on Customer Crowdfunding at the Colorado Lending Source.  For more information or to register, go to http://www.coloradocapitalcongress.com/events.

    In addition, you can register now for ComCap Colorado – a statewide conference on community capital and forming capital communities to address access to capital for Main Street organizations that will be held on February 1, 2017.  Go to: http://www.comcap.us/colorado.


  • October 17, 2016 8:32 AM | Anonymous

    Community capital will be the focus of a statewide conference, ComCap Colorado, which will be held on February 1, 2017.  http://www.comcap.us/colorado

    You are invited!  Please download an invitation and share it with everyone in your network.

    The National Coalition defines ‘Community Capital’ for Community Capital (NC3) as “capital that remains in the community, comes from the community, and benefits the community - ultimately strengthening community.” NC3 is working to move a significant portion of the estimated $40+ trillion Americans have in long-term savings from Wall Street to local and social entrepreneurs”http://nc3.comcap.us/ 

    Community capital may be considered ‘alternative capital’ – money from a source different from common sources such as banks or angels.  Community capital may also be viewed as any capital that can be obtained from a source within a short distance from your current base of operations: equity, debt, revenue share, asset sharing, licensing, sale of assets, grants, gifts, deferred compensation, earnings, factoring, leasing and lines of credit.

    The goal of ComCap Colorado is to foster new and support existing ‘Capital Communities - a group or crowd that acts in concert to support capitalization of one or more businesses, social enterprises or community projects. A Capital Community acts like a volunteer fire brigade that comes together as needed, when needed, to support the capital campaign of an organization within their community.  A Capital Community may be framed as a geographical area, an industry, a social cause or other topic in which the members of the Capital Community have common interests.  A Capital Community may be established at different levels: informal groups, a program within an organization, an investment club, an impact fund or an investment fund.

     Attendees of ComCap Colorado will meet Colorado leaders within the capital industry, will learn about and be introduced to a wide variety of local capital sources, learn about, obtain tools and receive support to start Capital Communities.

    With the recent rollback in securities regulations at the state and federal level, everyone is now enabled to invest in and provide financial support to a Main Street organization.  The United States passed the JOBS Act in 2012 and the State of Colorado passed the Colorado Crowdfunding Act 2015.  These changes enable public promotion of a capital campaign and the unlimited participation by non-accredited investors that comprise 97% of the population.

    ComCap Colorado is a collaboration of Colorado Community Capital PBC (formerly Colorado Capital Congress) http://www.coloradocapitalcommunity.com, the Jake Jabs Center for Entrepreneurship at the University of Colorado http://www.ucdenver.edu/academics/colleges/business/industry-programs/entrepreneurship/Pages/default.aspx and Hatch Innovation http://hatchthefuture.org/.  ComCap Colorado will be held at the Colorado University South Campus at 10035 Peoria Street, Parker, Colorado 80134.

    This topic and related topics on investment crowdfunding will be presented by Colorado Community Capital PBC on Thursday, October 27 at a workshop on Customer Crowdfunding at the Colorado Lending Source.  For more information or to register, go to http://www.coloradocapitalcongress.com/events.

    Karl Dakin

    Dakin Capital Services LLC

    kdakin@dakincapitalservices.com


  • October 03, 2016 8:55 AM | Anonymous

    Access to capital remains one of the greatest challenges to small businesses, social enterprises and community projects.  Raising capital is a difficult activity. It can become an impossible activity if the organization does not have enough capital to conduct a capital campaign. 

    So, the question is presented:  If an organization does not have the resources to raise money, is it possible to raise money to raise money?  Whenever an entrepreneur encounters an insurmountable obstacle, it is necessary to take one step back and adopt a strategy specifically to address that obstacle. 

    The simple answer to the question is ‘Yes’.  However, the entrepreneur must conduct two campaigns instead of one.  Each campaign will be different in terms of size, target and story.

    Say for example, an organization seeks to raise $500,000.  This capital campaign may be targeting wealthy individuals (angels), average people (non-accredited investors), strategic partners or other stakeholders.  The type of capital may be equity, debt or revenue share.  However, the organization has completed a campaign plan and has determined that it will require about $30,000 in order to conduct the campaign with a high probability of success (over and above time committed by the organization).  $30,000 that it does not have.

    It will be necessary to first conduct a capital campaign to raise the $30,000.  Although this campaign may target some or all of the same people of the original $500,000 campaign, it will be limited to quick money: capital from people already known to the organization who have a strong interest in its success.  The $30,000 campaign will not simply be a smaller version of the $500,000 campaign.

    The investment deal will most likely be structured as a bridge loan – a debt of short duration – just long enough to complete the capital campaign.  The loan may be paid back out of the money raised in the $500,000 campaign.  As an additional incentive, the supporters of the $30,000 campaign may be offered an opportunity to roll over their investment into the $500,000 campaign at preferential (discounted) pricing.

    Because of the short duration, the investment in the $30,000 campaign may be perceived as having a lower risk than the $500,000.  This may actually be false in that a failure to raise the $30,000 may bring the organization to a halt or actually force it to shut down.  The $30,000 campaign may be accurately portrayed as an ‘all or nothing’ gamble. Because of the dependency upon successfully completing the $500,000 campaign, an organization may have to make the same quality investor pitch for the $30,000 campaign as the $500,000 campaign. The organization may find itself in a situation where ‘you can’t get there from here’ with no options on raising the $30,000.

    The smaller dollar size of the $30,000 campaign may make the loss affordable (the investor is able to withstand the negative impact of a loss of the investment) to certain supporters.  The affordability of the loss may be increased by spreading it out over a group of investors – a capital community – with no one person bearing the brunt of the entire risk.

    The smaller dollar size of the $30,000 campaign may enable more people to participate in providing support – people who may provide $100 of support each in the $30,000 campaign that could not provide financial support of $500 or $1000 that might be sought as a minimum investment in the $500,000 campaign. 

    The smaller dollar size may also enable the organization to qualify for local community and economic development support.  Money for the $30,000 campaign may come from an impact fund or be treated as a grant or program related investment (PRI) from a local foundation.

    If the target audience changes from the $500,000 campaign to the $30,000 campaign, the organization must also change its story.  The story must amplify the relationship with the leaders of the organization (friends, family, associates) or the positive impact on the supporter (strategic) or the positive impact on the community (jobs, economic activity, tax revenues) or addressing a community problem.  There must be an affinity between the organization and the supporter that is not based upon an investment return on investment.

    Since the $30,000 campaign is intended to pay the costs of the $500,000 campaign, it is possible that some of the costs can be deferred – a commercial line of credit – from the service providers (lawyers, accountants, IT, marketing) and other vendors.  This will act to reduce the actual cash that needs to be raised to less than $30,000, making the goal easier to attain.

    This topic and other topics related to investment crowdfunding will be presented by Colorado Community Capital PBC at Colorado Lending Source on October 27th (For more information or to register, go to http://www.coloradocapitalcongress.com/events) and at ComCap Colorado on February 1, 2017 (For more information or to register, go to https://www.eventbrite.com/e/comcap-colorado-tickets-27899952509).

    Karl Dakin

    Dakin Capital Services LLC

    kdakin@dakincapital.com

    720 296 0372


  • September 19, 2016 12:49 PM | Anonymous

    I first presented the concept of a ‘capital community’ in late 2014 as a needed component within a proposed capital ecosystem.  In this original vision, a ‘Capital Community’ was framed as “a collaboration of businesses, chambers of commerce, economic development agencies and programs, community foundations, civic organizations and churches” that would take a leadership role within a community to improve access to capital.

    Continuing work on the concept of ‘Capital Communities’ has led to refinement and expansion in concert with the concept of ‘Community Capital’ established by Hatch Innovation and the ComCap Initiative.  https://www.comcap.us/

     Definition: Capital Community is a group or crowd that acts in concert to support capitalization of one or more Main Street businesses, social enterprises or community projects with Community Capital.

    Definition: Community Capital is capital that remains in the community, comes from the community, and benefits the community - ultimately strengthening community.

    Community Capital, while inclusive of bank financing and angel investing, also includes every other form of capital that might be found within a particular community.  It may include grants, gifts, competition awards, government programs, program related investments and all forms of alternative financing.  Whatever gets the job done!

    In the original concept of a Capital Community it was anticipated that the Community would create an inventory of all capital within the community and that this information would be made available through a person or program that may be called a Capital Coordinator – a central point of knowledge and contacts. 

    The original concept had a very strong ‘geographic area’ look and feel.  ‘Local’ was considered to be a district, town or an area where ‘everyone knows everyone’.

    As investment crowdfunding has continued to evolve towards the largest approach to raising capital for startups, small businesses, social enterprises and community projects, so has the concept of a ‘Capital Community’ evolved.

    A Capital Community may now be defined as a geographic area.  However, the area may be a city block, a city, a region, a state, a country or the entire world.

    A Capital Community may also be defined as a vertical niche representing a social cause or industry – a grouping based upon common social goals or similar business interests.  For example, a Capital Community interested in greenhouses may be based upon a group of greenhouse manufacturers, a group supporting local food production or a group of community garden managers.

    The need for an inventory of Community Capital and for one or more Capital Coordinator’s remains.  How and where this information is collected and applied may take many forms.  A Capital Community may be an investment club, a civic organization, an impact fund, a charity or other organization.  The Capital Coordinator may be housed within one of these organizations or within a local chamber of commerce, economic development office or Small Business Development Center.

    An organization seeking to raise money through investment crowdfunding would greatly benefit if it becomes the center of attention of a Capital Community.  In addition to its own networks, an organization may gain the expected benefit of working with a Capital Community that may directly invest, provide support services to the capital campaign and introduce the organization within the given Community. 

    An organization may identify a Capital Community while completing a Stakeholder analysis of who may benefit from the success of the organization [see other articles on Stakeholders at Colorado Community Capital PBC- http://www.coloradocapitalcongress.com  or at @karldakin on LinkedIn -  http://www.linkedin.com/in/karldakin].

    This topic and related topics on investment crowdfunding will be presented by Colorado Community Capital PBC (formerly the Colorado Capital Congress) this Thursday, September 22nd at a workshop on Customer Crowdfunding at the Colorado Lending Source.  For more information or to register, go to http://www.coloradocapitalcongress.com/events.

    Karl Dakin

    Dakin Capital Services LLC

    kdakin@dakincapitalservices.com


  • September 12, 2016 9:43 AM | Anonymous

    Many entrepreneurs launch a business as a natural consequence of addressing a problem.  They take the first step on a journey that may lead to success.   Too often, entrepreneurs look at their feet instead of the horizon when taking that first step.  Their focus on ‘next steps’ will lead to action.  Action is to be rewarded over those who simply talk.  However, without a defined goal, it becomes difficult to determine if progress is being made and if one is moving fast enough down the path.  And, it becomes difficult to raise capital.

    Raising capital is largely an act of shifting resources of the future to make then usable today – a time machine.  This act is demonstrated by a loan where money is received today in exchange for its repayment with interest in the future.

    The person holding the resources today – an investor (however that may be defined) – must be convinced that an event will occur in the future that will result in their repayment – a return of their resources. 

    Investors do not invest in today.  They invest in tomorrow: the date in the future when they get repaid their investment.

    In order to obtain needed investment, entrepreneurs must create a vision of that future date with such clarity that the investor will part with their resources and make them available to the entrepreneur – a form of self-fulfilling prophecy. 

    The clarity of the vision may be measured in terms of risk.  A very clear vision represents a low risk.  A murky vision represents a high risk.

    The lower the risk, there will be more investors that will be willing to part with their resources.  The more investors willing to part with their resources creates a marketplace for the opportunity presented by the entrepreneur that drives down the price of the investment.

    Entrepreneurs must do everything they can do to create this clarity of vision.  These efforts are reflected in strategy and planning, in knowledge of markets and customers and in the design of the products and services down to the finest detail.  There must be defined and measureable goals.  Each goal will have a number of milestones that will show progress towards success.  All of this information must be recorded and shared with members of the team to assure agreement and understanding of individual responsibilities.  This same information must be presented to prospective investors to share with them the clarity of the vision thereby reducing their concerns about the risk of the venture.

    In reality, no plan is perfect.  Projections seldom come true.  Businesses fail.   However, it is well recognized by investors that a good strategy will adapt to changing conditions and will evolve as a business grows with a higher probability of success.

    It has been said that a good business plan and management team will attract investment.  The alternative is an unending series of capital pitches that never results in funding.

    The entrepreneur should not start a new business without his or her goal clearly in mind.  This may be solving or mitigating a problem.  It may include selling out the business to someone else who will grow the business to be all it can be.  It may be something else - as long as the finish line is so well marked that everyone will know when it is crossed. 

    Investors may join the entrepreneur for part or all or part of the journey.  This is another value for milestones.  Different investors may support the entrepreneur at different time and in different ways.  They all need milestones to frame their investments.  The raising of capital is its own milestone.

    The entrepreneur may need to develop a new skill in talking in milestones like a conductor between train stations calling out the next stops and estimated time of arrival. Some entrepreneurs may find this form of expression difficult to master and will need to be able to put on their money raising hat and assume the role of the pitch person when called upon.

    The end of the story is the beginning point for planning and the recruitment of resources.

    This topic and matters related to investment crowdfunding will be presented at a workshop on Customer Crowdfunding on the morning of September 22nd at Colorado Lending Source by Colorado Community Capital PBC (formerly Colorado Capital Congress).  For more information or to register for this workshop, go to: http://www.coloradocapitalcongress.com/events

    Karl Dakin

    Dakin Capital Services LLC

    720 206 0372

    kdakin@dakincapital.com


720 296 0372

7148 S. Andes Circle, Centennial, CO 80016

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