CERO is a five-member worker-owned cooperative on a mission to encourage composting and create jobs in the low-income Boston neighborhoods of Roxbury, Dorchester, and East Boston. It’s a small but unusually diverse team: two of the five worker-owners are African-American, two are Latinas, and one is white. Setting the minimum investment in their DPO at just $2,500—open to any resident of Massachusetts—by the end of the year CERO had raised the $100,000 they needed to go into a bank for a loan. In January 2015 they did just that, receiving a $100,000 line of credit from the Cooperative Fund of New England.
How can an owner sell a growing, highly profitable business to the workers when they can’t pay what the business is worth? With our help, Real Pickles raised $500,000 in just two month through a Direct Public Offering, or DPO, in which it sold non-voting preferred stock to investors in Vermont and Massachusetts. Real Pickles was able to convert to a worker-owned co-op — instead of leaving the business, the former owners became equal co-owners, with more time for life. Read a detailed case study.
When a Port Townsend, WA, store closed, it left a gaping need for basic goods. Committed to shopping locally and fostering economic vitality in their community, a diverse group of residents opened Quimper Mercantile Co. with nearly $750,000 in proceeds from a DPO in which common stock was sold to Washington residents. Many Port Townsend and Washington residents bought stock not just for themselves, but for their grandchildren. Now that’s an investment in the future!
For more than 11 years, the nonprofit People’s Grocery of West Oakland has received national recognition for its many creative efforts to provide access to fresh produce, affordable groceries, and education about nutrition to a neighborhood of 25,000 people with no real grocery store. Out of this has grown People’s Community Market, which is using a DPO to raise $1.2 million to open a new, high-quality grocery store in the neighborhood. Investors purchased non-voting preferred stock with an annual 3% cumulative dividend. The corporation is not required to pay dividends or redeem stock for the first seven years of the investment. Investors also received a discount card that they can use at the store when it opens. The minimum investment was $1,000.
Farm Fresh to You, a much-loved family farm and CSA that delivers organic produce to customers throughout California, used a DPO to create a “Green Loan Program.” Through the program, investors purchase promissory notes with a variable interest rate that is tied to current market rates. Interest on the notes is paid in credits toward organic produce rather than in cash. An investor that moves out of the company’s service area can be paid a cash return at one percent less than the variable rate. Farm Fresh to You renews its permit every year so that it can use the Green Loan Program as a permanent source of capital. So far, it has raised approximately $2 million.
Mendocino County CDFI completes $360,000 raise for Ukiah wool mill
In what has been called a “blueprint for funding local economic development,” the Mendocino Wool and Fiber Project has been fully funded through a DPO by Economic Development and Financing Corporation (EDFC), a Community Development Financial Institution (CDFI) based in Mendocino County. In total, 76 individuals and 11 organizations invested in EDFC, and the average investment amount was $4,070. As for geographic representation, the majority of investors, 77 percent, were from Mendocino County. The remainder of investments, totaling $108,000, came from investors outside of Mendocino County. Hear from EDFC’s John Kuhry in an interview on 90.7FM Berkeley KALX’s Method to the Madness radio program.
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