Crowdfunding startups have become ubiquitous, so it’s important to know which of the many might apply to your next project. There are crowdfunding resources now available for funding major life events (medical expenses, travel, piloting lessons), developing mobile apps, creative projects, solar energy initiatives, and more. Crowdfunding startup Localstake makes it possible for community members to invest in local businesses.
Closer Community Ties
“We see private business investing as an attractive asset class that has not been available to most investors. It’s an investment that can provide the alternative exposure from the stock market that many investors are demanding,” says cofounder Brandon Smith.
By connecting local business with investment at the local level, Localstake aims to make the connection between the two in order to provide not only investment, but new networks of community members interested in seeing growth and expansion at the local level. Business looking to raise up to $1,000,000 in investment from investors are eligible and the investment options include issuing equity, loans, or revenue share securities. In addition, businesses at varying stages of their evolution are eligible to apply.
Growth And Development
“It’s easier for investors to research and understand the market and business when it is located in their community. Local investors contribute capital, but also become customers and advocates, ultimately helping grow sales of the business they invest in. Local investing brings a tangible connection to your investment” says cofounder Kevin Kitchen.
They figured that investors feel that much more secure when what they have invested in is within reach. There’s an element of pride as well as feeling that investors truly are a part of the business’ as well the community’s development.
Cofounder Kevin Hitchen puts it this way, “The reason we wanted to focus on local investments is because of the added protection it brings to investors. We quickly saw many other benefits. Local investments are easier to research and check up on. You can go talk to the entrepreneur or ask your friends about them. From a business prospective, not only does the investor supply capital but they become customers and advocates. Ultimately a business can have customers anywhere, but for the most part, they always start local.”
Another added element to Localstake has been its ability to create networks not only within local communities at a city level, but as well as at a statewide level. Government officials, associations, mentors, and advisors are able to form fruitful relationships that serve to build the infrastructure or ecosystem that otherwise wouldn’t have been as concrete.
Most recently, Localstake has launched Localstake Academy which is an interactive tool for potential investors used to teach them the basics of investing. The educational platform teaches them the ins and outs of private business investment. Items such as the term sheet, due diligence, and valuing a business are covered in depth.
Cofounder Ryan Flynn explains, “As we look at this from an investor’s perspective, education is an important component of introducing this asset class to everyday investors. The goal of Localstake Academy is to provide individuals with the knowledge they need to make educated investment decisions when adding private business investing to their portfolio.”