Interested in the process to start a legal cannabis business in California? Watch our webinar with attorneys Kim Arnone and Daniel Dellafosse to learn about capital raising, entity formation and compliance for the California cannabis industry.
Is your business ready for more funding? Watch our webinar replay on Regulation A+. Learn how to identify when your business is ready for a larger raise, receive an overview of the regulatory process for Reg A+, and hear how Reg A+ offerings can be promoted.
Crack open your notepad, listen in, and email us with any questions you have about the Reg A+ process at firstname.lastname@example.org.
Revalue Investing is a great example of an advisor leading this movement of new professionals who are willing to work with individuals to help them understand the risks and rewards when contemplating local, unlisted investments in companies that the large advisors refuse to consider. Revalue overcomes the large advisors’ risk aversion and limitation of liability by deploying smart disclosure methods. They know that by remaining agile, nimble and sized-right for communities, they can navigate through those risks without laying down heavy-handed restrictive practices.
My contribution to the session was that for community capital to be successful, we need professionals to participate with a different mindset and approach compared to what otherwise happens in a globalized and anonymous hyper-capitalist system that has almost nothing in common with community capital. Today’s uber-financialized economy does, however, have one essential connection back to communities – it needs to plug in everywhere so that it can extract far more than it contributes. That is one of the essential ingredients behind the myth of shareholder primacy.
Many of today’s professionals like to boast about their ability to charge as high of fees as whatever the market will bear. And because that approach mirrors how their clients behave, there is a built-in circular support system that gives no outward thought to how their actions directly contribute to our accelerating global crises, including the depletion of essential resources, climate change and state failures.
One important antidote to this flat-world mentality is the work happening on the ground, in communities, all over the world. Work by people who understand the value of strengthening community bonds, and fostering the recognition that without each other’s support, we end up as weak as our weakest link in the community chain.
Successful community capital markets are going to require professionals to operate under a new paradigm, and businesses in turn need to self select out of the professional system that contributes to damages to their communities by utilizing those professionals that have committed to work for fair and reasonable wages. This new paradigm no longer tests the limits of what businesses can bear, but instead adopts a reformed service model that does not force those companies to have to pass on the higher costs to their customers, and their community.
With few exceptions, community support relies on its own members, not from those extracting wealth from the community and into the out-of-town bank accounts of a very small group of exceedingly wealthy families. That kind of extraction leaves in its wake an ever increasing income and wealth gap that multiplies the damages to the health and well-being of a community, and professionals who don’t work to counter this impact are in turn contributors to it, and partly responsible for the effects.
We need a new breed of professionals who come to work each day with a different kind of commitment, and a revised expectation of compensation. These professionals must help the rest of the community to understand that for a community capital market to thrive, we have to think about a different way of investing in ourselves, where “returns” and “exits” are not the primary reason to support businesses, and where people primacy takes the place of the old shareholder primacy myth. As Michael Shuman added, this may call for the adoption a professional’s fiduciary responsibility to the community itself, not just to any one client.
This kind of self-imposed fiduciary responsibility to the community would mean curtailing work that is at odds with the needs of the community. It would call on professionals to select out of providing services that contribute to the extraction, and to bring their fees into alignment with those that need their help. It would call on professionals to challenge the myths, like shareholder-primacy – myths that foster the continued support of the extractive economy, and to examine and build practices around a more fair and just society.
These approaches by no means require taking a vow of poverty. For professionals to be truly effective for their community, they should align their mission and their compensation with the same expectations as those community members they serve.
Doing well by doing good may not go as far as community needs it to go. Doing well enough and doing good may be more to the point.
KALX Method to the Madness host Lisa Kiefer speaks with Maker’s Common founders Sarah Dvorak and Eric Miller about their new Berkeley eatery/market’s focus on American cheese producers and charcuterie, their challenges, mission and unique model of investment, a direct public offering (DPO). Click play below to listen to the full interview.
Work for or operate a nonprofit organization, innovation hub, accelerator, or incubator? Are you a community leader or economic development specialist? Do you want to learn about community investment funds and community capital raising? Join Cutting Edge Capital’s webinar onJuly 27th at 11 a.m. PT with Kim Arnone and Brian Beckon to learn in depth about community investment funds and how they can propel your mission and community vision. Click here to save your spot now!
Kim Arnone Vice President, Cutting Edge Capital
Kim specializes in developing community capital raising strategies for social enterprises, cooperatives and nonprofits. She works primarily on investment offerings that can be publicly offered and that are open broadly to community members. Kim has assisted a wide range of enterprises in successfully raising capital; from a worker-owned green waste recycling company to an organic farm, from a rural community development fund to an urban food coop. Kim has been with Cutting Edge for 5 years and has been practicing law for 20 years. She has her Juris Doctorate from Hastings College of Law, where she was editor-in-chief of the Women’s Law Journal. Kim lives, works, and plays in Oakland.
Brian Beckon Vice President, Cutting Edge Capital
Brian is an attorney with over twenty-five years of experience working for nonprofits, start-ups, and publicly-traded companies. As a principal of both Cutting Edge Capital and Cutting Edge Counsel, Brian’s work is now focused on direct public offerings, corporate structuring, and strategies for community capital to help build a more equitable economy. Brian has served as General Counsel for RSF Social Finance, Clean Power Finance, and LendZoan; and before that as Corporate Counsel for Sybase and Catellus Development Corporation. He earned his J.D. from the University of the Pacific McGeorge School of Law and started his legal career with the North Bay law firm of Gaw Van Male. Brian is a member of the California Bar and serves on the boards of the Mount Diablo Music Education Foundation and the Neto Community Network.
If you tuned into KALX, Berkeley’s 90.7 FM station, at noon today, chances are you heard Cutting Edge Capital’s Vice President Brian Beckon compellingly break down community capital on Method to the Madness with Lisa Kiefer, a weekly show that showcases the innovative spirit of the Bay Area. Click play below to learn more about the world of community capital.