Lately I’ve been thinking about money, investment and generational barriers. I volunteer at my local community garden located in Sonoma, California. The 6 acre property was a gift from Pauline Bond, schoolteacher and a gardener, to the City of Sonoma. Sonoma Ecology Center maintains it to promote sustainable garden & farming practices in the community. The garden offers its full time residents and its part time city dwellers a chance to learn foods journey from soil to plate.
Recently I met a young man at the garden. I’ll name him Russ. Russ accepted a position to manage, educate and generally care for my garden treasure. This 25 year old young man exudes confidence and commitment. Russ is paid minimally for his skills due to the financial constraints of a donation based community project. Its true the garden produces and sells the finest organic fruits, vegetables and eggs but the revenue from these incredible foods hardly pays wages.
My recent conversation with Russ got me thinking about his investment challenges. He has few, if any, options to invest in private food and agriculture companies in line with his values. I’m aware of his obstacles. A small dollar investment, his non-accredited investor status, and his lack of due diligence knowledge. Together, these obstacles make it nearly impossible for Russ, who given access, can add much value as a stakeholder.
Many non-accredited and younger investors are unable to participate in sponsor ed syndicates raising capital for early stage companies. I began to think about what alternatives are available for principled non-accredited would be equity investors. How to provide investment opportunity, transparency, education and ultimately access to deals. My new friend Russ can invest his time but not his hard earned capital.
The founder at Knives and Forks, a Canadian investment co-op located in Vancouver may have found a way. The co-op is focused on food sustainability, and may be an interesting model to explore as we continue the discussion about how to provide non-accredited investors with opportunities to participate in impact investing.
How it works. Interested investors join Knives and Forks as a member of the co-op. Members of the co-op are eligible to invest in the co-op’s lending activities. Members attend pitch sessions where they hear local businesses pitch their ideas. Members get to vote, one vote for each member, on their favorite business. Finalists then move to the investment committee for approval. Pitch sessions build community and provide a forum for connection. Members can discuss a companies stakeholder values, mission and purpose. Members become engaged in the investment process.
Its not just about financial returns. Social returns are a part of the total returns. Forks and Knives members are told they will realize a economic return of approximately 2% on their investment. However there are other ways measure returns in the form of benefiting their community, their environment and their local employment market. I see Knives and Forks as a model worth contemplating for investors as it creates tremendous alignment of stakeholder interests for non-accredited investors.