DIFFERENT MONEY IN DIFFERENT BUCKETS – PART 3 – PEOPLE WANTING TO MAKE AN IMPACT
Karl Dakin
I help you overcome challenges to raising capital. Take advantage of my Motivated Money Method to identify those investor candidates that are most likely to invest. Top expert in fundraising.
QUICK CALENDAR
July 8 – Don Cohen Show – 9 a.m., MDT – LinkedIn Live
July 9 – Successful Funding Show – 8 a.m., MDT – LinkedIn Live, Facebook and YouTube
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FUNDING POINT – DIFFERENT MONEY IN DIFFERENT BUCKETS – PART 2 – PEOPLE WANTING TO MAKE AN IMPACT
?In consideration of the multitude of possible funding sources for a community investment fund, people who want to make a social impact may be the most motivated candidates. With that generalization, the prospect of gaining investment from this source requires a more detailed assessment.
?People who want to make a social impact may include:
·?????? Everyone in the world
·?????? People who live to make the world a better place
·?????? People who want to invest and are willing to put purpose ahead of profits
· People who consider the impact of an investment to be a bonus.
Like yesterday’s assessment of community residents, the diversity of people who want social impact represents the full spectrum of possible motivations that may drive an investment decision.
?All investors are making investments in their self-interest. For people seeking impact from their investments, the only question may be which is more important: a rate of return on their investment or achieving social impact?
?For everyone else who may make an impact through investing, investing is simply the vehicle to cause impact. Most people may find causing impact through investing to be new. They may have little or no experience in investing. Some find investing distasteful because they associate making money with the bad parts of capitalism.
?However, creating a sustainable enterprise which has impact as its mission is for me the ultimate accomplishment. Not only is the entity causing impact, but making enough profit to make impact tomorrow and the next day and next year and into the next several decades is a victory.
?When a person makes an impact investment, they should use two scorecards: (1) the common scorecard of profits and return on investment and (2) an impact scorecard that shows how much social change was achieved.
?Social change may take the form of:
·?????? Higher employment
·?????? More roofs over people’s heads
·?????? More food in people’s stomachs
·?????? Reduction of crime
·?????? Greater opportunities through training and education
·?????? A place to gather and enjoy other members of the community
·?????? Equality
·?????? Truly representative government
RCI plans to raise funding in four stages:
· Seed Funding – high-risk funding to design and raise funding for a first-of-kind fund with a newly organized management team that will be expended quickly toward a Regulation CF capital campaign where the money may be paid back.
·?????? Community Investment Fund – a pooling of money from many investors toward the goal of causing revitalization of an underserved community in a manner that will create momentum for future economic growth that will take one year to invest and five years to work until investors may be paid back with both an appreciation of their investment and noteworthy and measurable impact.
·?????? Real Estate -construction lending (short term) and mortgage lending (long term) that will leverage down payment money from the Fund financing, increasing the size and number of real estate investments.
·?????? Business – equity ownership or revenue shares that multiply the investment from the Fund to grow existing businesses within the community and to recruit strategic businesses into the community
·?????? Programs and Projects – a cafeteria of several types of funding that match with one of the other types of funding or change the quality of the opportunity to qualify for other types of funding for purposes like workforce training, certifications, special applications, or other outcomes.
?A person wanting to make an impact may consider investing in Seed Funding of a Community Investment Fund if they anticipate that designing, funding, and operating a series of community investment funds will have a greater impact than anything else within their community or in communities across the United States. Until the time that RCI officially names the community for which it plans to establish a community investment fund, a person wanting to make an impact may wait till seed funding is raised to see if their community is selected. Other people may simply want to wait and see how the first community fund is achieving successful impact before making any investment. Early-stage investing will most likely come from an individual, family office, or social organization that has an existing relationship with one or more members of the RCI team and shares their vision for what a series of community investment funds may accomplish.
?A person wanting to make an impact may consider investing in the community investment fund if:
·?????? They see a benefit to themselves, either directly or indirectly
·?????? They see a benefit to someone they know
·?????? They see their investment as a way for them to both make a statement and see measurable impact outcomes
An investment in the Fund is far more likely once a community has been selected and the person is a member of that community. It is anticipated that by the time the Reg CF offering is launched, the community will be selected and a number of real estate properties and businesses will have been identified as investor candidates. An offer through Regulation CF will include lower dollar-priced investments that almost anyone can afford. A person wanting to make an impact may find investing in the Fund is one of the few options they have to make an impact. The fund will function as a proxy for the person by taking action and putting money into work within a community. An investment in the Fund will be for a term of six years, which may prove too long for most people.
?A person wanting to make an impact may invest in real estate purchased by the Fund or in a business in which the Fund makes an investment if:
·?????? The investment makes the concept of making an impact very tangible, measurable, and visible. Not just a statement or a promise but actual activities that can be verified.
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·?????? The investment acquires assets that may return money to the investor
·?????? One or more of the investments is of a term, size, or risk threshold that is suitable to the person
The dollar amounts and investment terms will vary, providing multiple investment opportunities that may match the person’s capabilities and preferences. Landowners may take a carried interest in properties sold to the Fund, which will reduce the dollars needed and enable investment in other real estate. An investment in local businesses may cause existing investors to double down and spur neighboring businesses to financially support the businesses around them.
?A person wanting to make an impact may provide different funding that may augment or amplify funding from other sources. Funding may occur after and separate from investment by the Fund with the Fund’s investment changing the characteristics and potential for a property or a business. Funding may take the form of a grant, contract for services, debt financing or equity.
?The more information becomes available about a Fund and where it will be invested, the easier it will become to determine which people may invest based on the type of projected impact.
?As more people invest, it will become more normal and acceptable.
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SUCCESSFUL FUNDING
NEXT WEEK, TUESDAY, JULY 9, my guest on the Successful Funding show will again be Jeff Dangremond. As a wealth advisor, he guides his clients in making impact investments. We will discuss investing in communities.
YESTERDAY, my guest on the Successful Funding show was Eric Hanson. Eric and I discussed investing in communities. He shared the story of an Expo held in the city of Spokane, Washington, in 1974. Starting with a big idea, city leaders advanced the idea into a series of major actions, resulting in relocating the railyards, recruiting Ford Motor as an anchor tenant, and turning skepticism into hope. Each major participant worked cooperatively because they had their own self-interest to benefit. They brought over 6 million visitors to a city with a population of 115,000. What a success!
You may see a recording of the show at:
You can see all of my shows at the time of broadcast or recordings of past shows at my profile on LinkedIn.
?DON COHEN SHOW
THIS MORNING, I was a guest on Don Cohen’s show. Don and I talked about ‘financing.’ The conversation touched on several challenges, common mistakes, and best practices.
You may see a recording of today’s show at:
I was also a guest on Don’s show on Monday where we talked about ‘community funding.’ We explored the complexity of investing in a bundle of real estate and local businesses with the goal of catalyzing an economic turnaround and establishing a growing, evergreen source of funding.
You may see a recording of Monday’s show at:
Don is an expert on LinkedIn, particularly on the use of Live streaming to build brands and communities. We will discuss using LinkedIn as a social media platform for building communities that support raising funding.
All shows where I have been a guest can be viewed on Don Cohen's LinkedIn page under Posts.
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?Karl Dakin, the Capital Coach
Dakin Capital LLC
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I help you overcome challenges to raising capital. Take advantage of my Motivated Money Method to identify those investor candidates that are most likely to invest. Top expert in fundraising.
4 个月Have you tried causing impact through investing?