CERO is a 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. Listen to our interview with CERO here.
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.
Sonoma West Publishers
Small Town Newspaper Uses Their Own Readers to Raise Capital
Rollie Atkinson of Sonoma West Publishers describes the outcome of their 2018 DPO, “we made a big push in the final weeks with advertising in our own newspapers to reach our DPO goal of $400,000. We actually went over the goal and we ended up with just over 200 local community investors. We can now look forward to a year of lots of community and reader outreach, new journalism projects and strengthening of partnerships around our mission of informing, educating and building our local communities.” You can read our full interview with Sonoma West here.
Non-profit/Business Partnership Thrives By Meeting Community Needs
In an Oakland neighborhood that has lacked a grocery store for years, Community Foods Market opened in the summer of 2019. They used a DPO to raise $1.2 million to open a new, high-quality grocery store that includes a cafe 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. 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.
Cutting Edge Capital is a strategic practice of Cutting Edge Counsel.
344 Thomas L Berkley Way
Oakland, CA 94612