Crowdfunding as a Placemaking and Community Revitalization Tool

What is Crowdfunding? Is the use of small amounts of capital from a large number of individuals to finance a new business venture or project.Is the use of small amounts of capital from a large number of individuals to finance a new business venture or project. Types of Crowdfunding Reward/Donation – essentially donating money to support a cause. Examples: Kickstarter or IndiegogoReward/Donation – essentially donating money to support a cause. Examples: Kickstarter or Indiegogo Investment Crowdfunding – funding a start-up or expansion of a business venture by borrowing from, sharing revenue with, or selling equity to many investors.Investment Crowdfunding – funding a start-up or expansion of a business venture by borrowing from, sharing revenue with, or selling equity to many investors.

Michigan Invest Locally Exemption - MILE 4 th state to have a law/regulation – dozen now have one on the books4 th state to have a law/regulation – dozen now have one on the books Allows businesses to raise capitalAllows businesses to raise capital –Up to $1 million without audited financial statements –Up to $2 million with audited financial statements InvestorsInvestors –Accredited can invest unlimited amount –Non-accredited can invest up to $10,000 in any one campaign

Why Crowdfunding is Important for Communities Economic and community developmentEconomic and community development Local opportunity to diversify local economiesLocal opportunity to diversify local economies Attract & retain talentAttract & retain talent Better Communities Better MichiganBetter Communities Better Michigan

Three Part Success Local entrepreneursLocal entrepreneurs Local investorsLocal investors The communityThe community

Local Entrepreneurs Start or grow a businessesStart or grow a businesses Massive gap in the market to access capitalMassive gap in the market to access capital Build customer baseBuild customer base

Tecumseh Brewing Co. Experienced microbrewery production and management team Located in the heart of downtown Tecumseh Building already owned; established following of local supporters First to be fully funded under MILE law

Local Investors Opportunity to invest in what they know bestOpportunity to invest in what they know best Bring more than fundingBring more than funding –Customers –Promoters –Advocates Local $$ stays localLocal $$ stays local

Main Street Community Partnership Main Street Community Partnership 22 Adrian residents invested in building on Main Street22 Adrian residents invested in building on Main Street 7,400 sq. ft. of mixed-use space7,400 sq. ft. of mixed-use space Provided stable landlord to a long-term expanding first floor retailer.Provided stable landlord to a long-term expanding first floor retailer.

The Community Strengthens existing/new relationshipsStrengthens existing/new relationships Diversifies local economyDiversifies local economy Enhances the emotional connection to a communityEnhances the emotional connection to a community Fills vacant buildings and empty lotsFills vacant buildings and empty lots

CrowdfundingMI Online platform – platform – Crowdfunding Partners

National expert in business crowdfunding Fundamental focus on local businesses, local investors, and local community partners. Locally-focused marketplace o CrowdfundingMI.com

National expert in real estate crowdfunding. Fundrise gives citizens the power to invest directly in local real estate. Citizens can build places through public ownership.

New program with MEDC and Patronicity for public space crowdfundingNew program with MEDC and Patronicity for public space crowdfunding

Public Spaces Community Places Just kicked off July 2014 Matching grant for public space improvements Dollar for dollar match up to $100,000 Community/Organization must crowdfund for public project through Patronicity If they meet the target, they get the matching grant from MEDC Projects must be ready to execute upon being awarded the grant and must be in a community with a traditional downtown

So far 11 projects have been funded totaling $263,000 in MEDC grant moneySo far 11 projects have been funded totaling $263,000 in MEDC grant money 4 projects are currently live4 projects are currently live Several slated for spring kick-offSeveral slated for spring kick-off 100% success rate (so far)!!!100% success rate (so far)!!! Turn around for approval is within days (some have been hours)Turn around for approval is within days (some have been hours) Application guidelines can be found on patronicity.com and crowdfundingmi.comApplication guidelines can be found on patronicity.com and crowdfundingmi.com Application is actually filled out onlineApplication is actually filled out online

Next steps Educate local entrepreneurs and investorsEducate local entrepreneurs and investors Support complementary law: Local Stock ExchangesSupport complementary law: Local Stock Exchanges Highlight and share success storiesHighlight and share success stories Continue to promote Public Spaces Community Places programContinue to promote Public Spaces Community Places program

CROWDFUNDINGMI Send Michigan is pro-business message to entrepreneursSend Michigan is pro-business message to entrepreneurs Game-changing chance to further propel and enhance our economyGame-changing chance to further propel and enhance our economy Michigan has the opportunity to serve as a magnet for the creative, talented classMichigan has the opportunity to serve as a magnet for the creative, talented class

Questions Contact Info: Summer Minnick