While buying coffee at the local coffeehouse or a book at the independent bookstore certainly helps keep these companies in business, it might not be enough to help them grow or expand and keep up with the seemingly limitless capital of global corporations. Sometimes you want to do a little more to keep your favorite businesses (and your community) prosperous.
Now there's a new way to really invest in your local businesses and get perks at the same time.
Building off Kickstarter's successful crowdfunding platform that helps fund artistic projects, Smallknot allows you to invest in a specific project from a local business. Tiered perks (depending on how much you invest) help incentivize investment. For example, an independent radio station is looking to revamp its online presence. Help them out with $100 and you can play out your childhood fantasy of hosting a radio show. Or help a design shop put out their latest "ethically made" collection and get double the amount in store credit.
Why is it important to invest in these projects? The founders of Smallknot explain on their website why this type of investment is so important for small businesses, "Small business finance is broken. This is about a broken system. The financial system just isn't built for the smallest businesses that make our neighborhoods special. The places we spend our lives. Small business lenders can’t make enough money from Mom ‘n Pop unless they squeeze them to death on interest rates or just ignore them altogether."
And soon, crowdfunding investment could mean more than just perks from the business, Fast Company's Kelsey Campbell-Dollaghan reports:
[A] new bill called the Entrepreneur Access to Capital Act could change the crowdfunding game by letting small businesses offer stock options in addition to perks. In a New York Times Op-Ed, Amy Cortese explains how the act would help small businesses and the platforms that support them: “the proposed crowdfunding changes would make it easier for entrepreneurs to tap ordinary investors--often customers or people in their social networks--for funds, with the promise of a return.”
It's a bill that would not only benefit investors and businesses, but entire communities.
Currently, Smallknot is only in New York and Greenville, S.C., but has plans to expand to cities nationwide.