Investment Crowdfunding – Part 20 of 20+ Series – Valuation of Non-Monetary Benefits
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.
It’s not all about the money! Investment in a small business has consequences beyond the bottom line and ROI. Talk to any economic developer and they will point out all of the good things that come out of the continuing operations of a small business within a community. These people work hard to recruit and retain small businesses to operate within their communities.
?Small businesses:
·?????? Provide jobs and wages
·?????? Buy products and services
·?????? Pay sales, property, and income taxes to different governments
·?????? Often sponsor or support community organizations and projects
On Tuesday, Devin Thorpe with SuperCrowd used the example of the investment crowdfunding package offered by Greens Gone Wild as an illustration of how investing in a small business can create an impact:
·?????? Selling healthy food
·?????? Promoting healthy diets
· Woman-owned business
·??????? All the items in the first list
Devin leads the Impact Cherub Club that invests in small businesses using his ‘passbook savings’ approach with monthly regular investments in small businesses to build wealth over time. He has published books on the positive impact of small businesses which include Crowdfunding for Social Good, Financing Your Mark on the World . For investors, Devin is very firm in his position that you can make money investing in small businesses.
The Greens Gone Wild offering memorandum, Form CF-2 Disclosure Statement, and financials can all be viewed and downloaded on their crowdfunding page at CrowdSprouts .
?In yesterday’s edition of Instant Funding, I laid out the monetary valuation of an investment package that included both equity ownership and products. There are several ways to assign value based on what the investor cares about. The investment package was intentionally designed to promote Greens Gone Wild products as it targets existing and future customers within its campaign.
?A small business should consider the non-monetary benefit that can be realized by an investor in addition to ROI, products, discounts, or other monetary benefits. These items may represent little or no value to certain investor candidates. For those candidates who assign non-monetary value to an investment, this value may be the sole reason for investing or simply act as the tipping point that caused an investor to choose this small business over other investment opportunities.
?When people invest in a particular small business for non-monetary reasons it may be very difficult, if not impossible, to assign a value. Since the value may vary greatly with the individual investor candidate, the challenge of assigning value is even more difficult. There are many ongoing efforts to assign social value to such outcomes as environment, social, and governance (ESG).
?From the standpoint of the small business, it may be simpler to ask the question of whether the non-monetary benefit will or will not affect the decision to invest. If the benefit is important, then the small business must determine whether those people to whom the benefit is important can be readily identified enabling a targeted promotional campaign. It is the difficulty of the identification of investor candidates based upon a non-monetary benefit that will influence a small business to pick some other group as the primary target of their capital campaign.
However, non-monetary benefits may still contribute to an investor candidate making an investment decision in favor of the small business. Therefore, when designing an investment package like that of Greens Gone Wild, consideration should be given to what a small business can add to its investment package that makes it more appealing and differentiates it from those small businesses only offering equity ownership. Consider how the small business can help its team, its customers, its neighborhood, its industry, and its community. The non-monetary benefits may be viewed as the 'icing on the cake' or the 'cherry on top' which represents the deciding factor.
Rarely will non-monetary benefits be the sole reason for an investor candidate choosing to invest in a particular small business. Investors will still want a basic investment that has the potential to pay back the investment with some level of return.
?Don Cohen
?I was a guest Wednesday and will be a guest again Friday on Don Cohen’s show (Monday through Friday at 9 am MST) on at 9 am MST where we will be talking about buying and selling businesses.? I engaged Don as a coach to help me set up the Successful Funding show on LinkedIn Live. He has been assisted by Kelle Steinecke (The Awesome Journey Show) and Harvey Tuck (The Franchise Show) who have been mentoring on the use of LinkedIn, the publication of the Instant Funding newsletter, Restream and guest management.
?You may go to his LinkedIn profile to see posts of all of his shows including the one where I have been a guest.
?Motivated Money Half-Day Workshop
?Subscribers to the Instant Funding Newsletter are invited to attend a half-day workshop where I will present my Motivated Money Method to raise capital. Subscribers qualify for a 20% ($100) discount from the standard $500 price. Use the discount code: Instant Funding
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?Thursday, February 29 -? 9 am to 1 pm MST - Zoom Online
?The workshop will instruct on the Motivated Money Method of raising capital that targets investor candidates who are 'most motivated' to provide needed capital. Attendees will receive a workbook, templates, and a video recording of the workshop. A single organization may have up to three representatives may participate for a single registration fee.
??Successful Funding Show
?Michael Podolny will be the guest on the next Successful Funding show on Tuesday, February 16 at 8 am MST. Michael is the Founder and CEO of Theodora Africa – a nonprofit that trains women in Africa to be virtual assistants and then arranges the sale of their services to small businesses in the United States. The availability of these services can be a great help in filling the gap in support personnel while having a positive impact on the lives of these women in Africa.
?Devin Thorpe was my guest on my Successful Funding show last Tuesday. We had a very energetic discussion on impact investing and crowdfunding. Devin was very clear that it is possible to build wealth by investing in small businesses through crowdfunding. And, each operating small business has a major impact on the community in which it operates. You may view the show in the posts on my LinkedIn profile at:
?The Successful Funding show will repeat weekly at 8 am MST on Tuesdays on my LinkedIn profile.
?Founded in FOCO
?I will be presenting a workshop on the topic of What is Your Funding Potential? on March 8 from 11:00 am to 12:30 pm in Fort Collins, Colorado at the Founded in FOCO event.
?SuperCrowd 2024
?I will be co-hosting the SuperCrowd 2024 event: “The Impact Crowdfunding Event of the Year” which will be held April 17th and 18th online.
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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.
9 个月Non-monetary benefits include impact that contributes not only to the investor but also to the investor's community.