Economic Vitality Action TeamEconomic Vitality Action TeamPresentation to the Corvallis

Economic Development Commission

February 10, 2014

Robert Mauger

ECONOMIC VITALITYECONOMIC VITALITY

Goal 1: By 2020, 50% of residents and businesses will

support the local economy through buying, investing,

and/or producing locally.

Goal 2: By 2020, 90% of businesses will use sustainable Goal 2: By 2020, 90% of businesses will use sustainable

practices.

Goal 3: By 2020, 50% of residents will engage in

community networks that meet their needs while minimizing

resource consumption.

Economic Vitality Action TeamLocal InvestingLocal Investing

Film Screening

Darkside TheatreJuly 2012

Economic Vitality Action TeamLocal Investing FocusLocal Investing Focus

“Small Change, Big Change”

Community Investing ForumNovember 2012

Economic Vitality Action TeamLocal Investing FocusLocal Investing Focus

Corvallis Sustainability Coalition

2013 Town HallMarch 2013

Common Common Aims with theAims with theEconomic Development CommissionEconomic Development Commission

•• In support of all three goals of the Economic In support of all three goals of the Economic Development Strategy and Smaller Step 2Development Strategy and Smaller Step 2

(August 2013) Requests to the Economic Development CommissionEconomic Development Commission

• Be aware of a survey recently released by the Action

Team regarding capacity for local investing

• Survey is available at tiny.cc/EVATsurvey or from • Survey is available at tiny.cc/EVATsurvey or from

Coalition homepage at www.SustainableCorvallis.org

• Please invite us back to share the results.

Survey Participants

Local Investing Local Investing Background (Q1)Background (Q1)

Own Own Business? Business?

(Q2)(Q2)

Business info Business info (Q3 (Q3 –– 5)5)

Seek Seek investment? investment?

Investment need Investment need

Yes (78)Yes (78)

Yes (33)Yes (33)

(188 people)(188 people)

188 people, including:188 people, including:•• 78 business owners78 business owners

•• 33 seeking investment33 seeking investment•• 138 people interested in 138 people interested in

investing locallyinvesting locally

(Q2)(Q2)investment? investment?

(Q6)(Q6)

Investment need Investment need (Q7(Q7--12)12)

Wiling to Wiling to invest? invest? (Q13)(Q13)

Contact Info & Contact Info & Thank youThank you

Investor Info Investor Info (Q14(Q14--18)18)

Yes (138)Yes (138)

50

100

150

200

Q1. Indicate your familiarity and interest in the following:

-50

0

JOBS

Slow Money

Comm. Dev. Fin. Inst.

Angel

DPO

P2P

Crowdfunding

Self-Directed IRA

Community Investing

LION

Co-ops

Solar Financing

Locavesting 101

Want to learn more

Familiar

Want to participate

NOT interested

Q1: Other topics of interest:• Mid sized local profitable companies interested in investors to fund expansion

• Options that qualify for inclusion in IRA

• Community gardens/orchards financing.

• Investing in local food systems and local arable land.

• Investing in single-family houses to rent to low-income families

• Non-economic ones like Hours Trader and barter.

• local investing of IRA funds in a Real Estate Investment Trust as a funding vehicle for a community land trust

• farmlands IPO, REIT for community land trust

• Options for low-income folks to get involved in investing locally• Options for low-income folks to get involved in investing locally

• *Occupy Money* by Margrit Kennedy (2012)

• The JAK model and "demurrage." practiced by Sweden's JAK Bank since 1965.

• Portland has a thing called Supportland - which is a rewards card for spending money at local businesses.

• Socially Responsible Investing

• SWOT, BEC, WIN, WAC, Other angel conferences

• Move Your Money

• "De-growth.

• Effect of "economic growth" on climate.

YesYesYesYes35%35%35%35%

Q2. Q2. Q2. Q2. Do you own or manage a Corvallis-area business or plan to start a business in the area?

MaybeMaybeMaybeMaybe7%7%7%7%

NoNoNoNo58%58%58%58%

Business SectionBusiness Section78 Responses78 Responses78 Responses78 Responses

Q3. What does your business do?

Solar ElectricitySkilled labor - finish carpentryEco home remodelsI make and sell bioregional jewelry & am an entertainment specialistNonprofit youth services providerI don't know yet.Fresh culinary herbs, eggs, small conference centerBookkeeping services and interior plantscaping (I have two businesses)Local produce, local crafts, local music venueelectronics repair and service

Business, life, and conflict coachingInsurance/Investment ServicesFitness Training, sell Yoga suppliesSocial service based economic developmentpermacultureA temporary employment agency serving Benton CountyFiber Arts Instruction; Recreation services, eg. cycling and dance instructionJewelry salesCarpentryarchitecture

Publish a region directory of green and natural healthy business & topicsBooksMovie theaterBuild BicyclesDesign ServicesIndependent Environmental ConsultingHandmade art and jewelryNon Profit dedicated to eliminating the use of toxic chemicalsGrow tree fruits, possibly produce cider and/or perryRent a duplex near campuselectronics repair and service

manufacturingGraphic Design / PrintingpsychotherapyFinancial Plannerproperty managementgeneral contractor/handymanartisan bread bakery using local organic ingredientsArtisan breadsWine shop (bottle shop)Sell seedsServicesBicycle Shop

architecturecreative reuse center like SCRAP in Portlandproperty managementfood serviceDietary supplementsProduceLandscape architectural servicesIllustration, Craft PrintmakingWriting and editing servicesInterior Plantscaping and bookkeeping businessesNonprofit development, bookkeeping, organizingCinema

Rent a duplex near campusLandscape design, consulting, maintenance, rainwater collection, raingardensSmall non-profit scientific organization specializing in research, conservation, and educationHigh techI am looking for startup opportunities in any industryFarmingBooks and educational lecturesHealth careConsultingWe provide integrative chiropractic and functional medicine servicesSolar panels, software

Future startup

13 (19%)

Less than a year

Q4. How long have you been in business?

Less than a year

8 (11%)

1 to 5 years

12 (17%)

More than 5 years

37 (53%)

None

25 (36%)

Six – 15

2 (3%)

16-50

5 (7%)

over 50

1 (1%)

Q5. Estimate the number of full time employees.

One – Five

37 (53%)

Yes,

11 (15%)

Q6. Is your business (or startup) likely to seek an

investment or loan within the next 24 months?

Maybe,

22 (30%)

No,

41 (55%)

0

2

4

6

8

10

12

14

16

18

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Q7) What purpose(s) would your business

apply a loan or investment toward?

Also mentioned: Also mentioned: remodel home to house cooperative commercial bakeryremodel home to house cooperative commercial bakeryweatherizing, landscaping, energyweatherizing, landscaping, energy--system upgradesystem upgradedeveloping websitedeveloping websiteBuying new processing equipmentBuying new processing equipment

Exp

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15

20

25

30Q9. Identify the order in which you would expect

to access each source, if at all. 6

5

4

3

2

1

0

5

10

Family, Friends,

and Fans

Bank or Private

Institution Loan

Personal Cash

or Credit

Government or

Nonprofit Grant

or Loan

Offering Equity

or New

Ownership

Sale of Business

Assets

1

Also mentioned:Also mentioned:

CrowdCrowd--funding, Grants, Advance Salesfunding, Grants, Advance Sales

Q10. Q10. If borrowing money, what annual percentage If borrowing money, what annual percentage interest rate would work for your business?interest rate would work for your business?

Responses: Responses: 2.52.53333334455555555556666667788888888101010101010

Average: 6.125 +/Average: 6.125 +/-- 2.3 Standard Deviation2.3 Standard Deviation

40%

50%

60%

70%

80%

90%

100%

Q12. Q12. Q12. Q12. In order to access investments or loans from local investors, would you be comfortable with the

following?

Yes

0%

10%

20%

30%

Sharing your business plan, idea, or model with investors

Sharing your profit and loss statements and balance sheets with investors

Sharing your financial

projections with investors

Personally guaranteeing business debts to investors

Maintaining personal ongoing

relationships with investors

Yes

Maybe

No

Yes,42 (23.7%)

No,39 (22.0%)

Q13. Q13. Q13. Q13. Are you interested in making direct investments in Corvallis-area businesses?

Maybe,96 (54.2%)

Investor’s SectionInvestor’s SectionInvestor’s SectionInvestor’s Section138 Responses138 Responses

Yes, 32.5%41

Q14.Q14.Q14.Q14. Have you ever directly invested in, or lent

money to, a small business or startup?

Q15. Q15. Q15. Q15. Have you ever (co-)owned, managed, or started a small business

or startup?

41

No, 67.5%85

Yes, 45.7%58No,

54.3%69

40

60

80

100

120

140

Q16. Q16. Q16. Q16. How important are the following considerations to you if investing locally?

0

20

High reward

Tech/innovation

Engage re: Corvallis’ economic future

Entrepreneurship & startups

Personal control over investments

Learning about Corvallis businesses/ideas

“Move Your Money” from W

all Street

Local food prod.

Existing Corvallis-area bus.

Bringing/keeping business in Corvallis

Low Risk

Promoting sustainability

Not important

Somewhat important

Critical

Other Responses: Other Responses: •• investing in my own community's future. investing in my own community's future. •• See all of Corvallis independent of Wall StreetSee all of Corvallis independent of Wall Street•• Investing in agriculture land with water rights. Local food systems/industries: cannery, dairy, etc.Investing in agriculture land with water rights. Local food systems/industries: cannery, dairy, etc.•• Figuring out how to safely and not foolishly get out of carbonFiguring out how to safely and not foolishly get out of carbon--villeville•• Quality screening for social investment valuesQuality screening for social investment values•• Supportive local culture and government.Supportive local culture and government.•• Free Enterprise mentality.Free Enterprise mentality.

Q16.Q16. Important considerations if investing Important considerations if investing locally?locally?

•• Divesting in carbon energyDivesting in carbon energy•• Setting up investing locally to be universally accessible, within reach of ALL income levels.Setting up investing locally to be universally accessible, within reach of ALL income levels.•• Land trusts for farmers and for housing so that people can get a start without the high costs of the Land trusts for farmers and for housing so that people can get a start without the high costs of the

current market on profit. current market on profit. •• I would like to see businesses be not for profit and trade with one another without interest costs and I would like to see businesses be not for profit and trade with one another without interest costs and

take the profit margin out and still "make a living"take the profit margin out and still "make a living"•• Move $ away from "too big to fail" banksMove $ away from "too big to fail" banks•• Increase our local antiIncrease our local anti--fragility to perturbations in the energy or monetary supply: preparing for worst fragility to perturbations in the energy or monetary supply: preparing for worst

case, e.g. biking more and learning to carry big or heavy things by bike.case, e.g. biking more and learning to carry big or heavy things by bike.•• ReRe--directing PERS investments (I am an OSU retiree)directing PERS investments (I am an OSU retiree)•• I don't have any money invested directly in Wall Street, but I'm sure that some of my money is indirectly I don't have any money invested directly in Wall Street, but I'm sure that some of my money is indirectly

going to corporations (i.e., through the credit union and through my retirement funds in the California going to corporations (i.e., through the credit union and through my retirement funds in the California State Teachers Retirement System). I'd rather see that money stay in Corvallis.State Teachers Retirement System). I'd rather see that money stay in Corvallis.

Q17. Q17. What types of projects would you be most What types of projects would you be most excited about funding?excited about funding?

•• Food, alternative energyFood, alternative energy•• natural farming/permaculture, agroforestrynatural farming/permaculture, agroforestry•• ones that employ 50+ people & pay good wagesones that employ 50+ people & pay good wages•• grocery in south Corvallis, sustainable and varied grocery in south Corvallis, sustainable and varied

renewable energy, and natural resource projects.renewable energy, and natural resource projects.•• Food and farmingFood and farming•• Alternative energyAlternative energy•• local sustainable foodlocal sustainable food•• sustainable farmingsustainable farming•• The key for me is meeting the ownersThe key for me is meeting the owners•• I'm open to hearing what's out there.I'm open to hearing what's out there.•• local music venues, farmers, food producerslocal music venues, farmers, food producers•• selfself--reliant bed and breakfastreliant bed and breakfast•• Basic needs: food, housing, transportation, energyBasic needs: food, housing, transportation, energy•• aligned with community prioritiesaligned with community priorities•• Core goods or services. Not "product of the day" Core goods or services. Not "product of the day"

businesses.businesses.

•• Local BusinessLocal Business•• Solar and other renewable energy/energy efficiency Solar and other renewable energy/energy efficiency

projectsprojects•• green technologies, value added food production,green technologies, value added food production,•• those with potential for reducing resource those with potential for reducing resource

consumption and/or improving quality of lifeconsumption and/or improving quality of life•• Interested in those things that keep Corvallis' unique Interested in those things that keep Corvallis' unique

character.character.•• Peaceful ones. I'd want to know the proprietors.Peaceful ones. I'd want to know the proprietors.•• Community land trust, food production and processingCommunity land trust, food production and processing•• Local food production; food system support Local food production; food system support

entrepreneurship; sustainable projects (triple bottom entrepreneurship; sustainable projects (triple bottom line)line)

•• Traded sector firms, tech manufacturing, energy Traded sector firms, tech manufacturing, energy technology, with a local food company tossed in for technology, with a local food company tossed in for good measure.good measure.

•• small business start ups that pay success forwardsmall business start ups that pay success forward

•• Food, energy and transportation projects. Bike Food, energy and transportation projects. Bike shares, community solar, locallyshares, community solar, locally--sourced delivery sourced delivery food, and the list goes on.food, and the list goes on.

•• Local food production.Local food production.•• Energy, food productionEnergy, food production•• Sustainable businesses and local food productionSustainable businesses and local food production•• Traded sector with great working conditions: bring Traded sector with great working conditions: bring

money into Corvallis from outside areamoney into Corvallis from outside area•• solar electricity productionsolar electricity production•• construction/buildingconstruction/building•• alternative energy, lowalternative energy, low--income housingincome housing•• New technology or softwareNew technology or software•• Farm relatedFarm related•• food production or food processing, garment food production or food processing, garment

production, tool production, recycling processingproduction, tool production, recycling processing•• manufacturing tools for organic growersmanufacturing tools for organic growers•• Food processing, farms, other small businesses, Food processing, farms, other small businesses, businesses.businesses.

•• A local building development rather than out of state A local building development rather than out of state developersdevelopers

•• Community agriculture, renewable energy systems, Community agriculture, renewable energy systems, bikebike--powered mass transit, and similarly green/planetpowered mass transit, and similarly green/planet--safe enterprisessafe enterprises

•• Sustainable local food systemsSustainable local food systems•• Local food production, housingLocal food production, housing•• Sustainable food systems and distributed generation Sustainable food systems and distributed generation

systems (electric)systems (electric)•• Community solarCommunity solar•• Local foodLocal food--relatedrelated•• Sustainability, Alternative Movements, EducationSustainability, Alternative Movements, Education•• Cooperatives, sustainable venturesCooperatives, sustainable ventures•• EcoEco--friendly innovationsfriendly innovations•• Local people with ideas to benefit the local communityLocal people with ideas to benefit the local community•• Organic agriculture and food processing, Organic agriculture and food processing, biocharbiochar

productionproduction•• Natural resources, OSU / HP/ spinoutsNatural resources, OSU / HP/ spinouts

•• small business start ups that pay success forwardsmall business start ups that pay success forward•• Local electricity generation and fuel production, local Local electricity generation and fuel production, local

food processingfood processing•• sustainable power projects, local food projects, sustainable power projects, local food projects,

sustainable housingsustainable housing•• local solarlocal solar•• Farming, local essential food saving businesses, land Farming, local essential food saving businesses, land

trust housing. As these projects got going I could trust housing. As these projects got going I could would invest more money as times went on.would invest more money as times went on.

•• Local food related projects jump to mind, but we are Local food related projects jump to mind, but we are open to suggestions.open to suggestions.

•• Sustainability and food productionSustainability and food production•• First would be food processing/production, after that, First would be food processing/production, after that,

but tend toward the small creative typebut tend toward the small creative type•• Not sure. Open to ideas. Has to be sustainable.Not sure. Open to ideas. Has to be sustainable.•• Sustainable with growth potential (to put more folks to Sustainable with growth potential (to put more folks to

work)work)•• Projects that directly add to food security or reduce Projects that directly add to food security or reduce

the carbon footprint of our communitythe carbon footprint of our community•• Local food manufacturing, alternative transportation Local food manufacturing, alternative transportation

manufacturing, businesses that employ and teach manufacturing, businesses that employ and teach skills to teenagers.skills to teenagers.

•• Food processing, farms, other small businesses, Food processing, farms, other small businesses, especially those improving community sustainabilityespecially those improving community sustainability

•• Local production for local usesLocal production for local uses•• alternative energy and transportation and alternative energy and transportation and

organic/sustainable agricultureorganic/sustainable agriculture•• Food production and sustainable technologyFood production and sustainable technology•• small manufacturingsmall manufacturing•• Projects that directly support a clean energy future, Projects that directly support a clean energy future,

local food production, and water conservation.local food production, and water conservation.•• Traded sectorTraded sector

< $500

16%

19$10 - $50k

16%

19

> $50k

6%

7

Q18. If you identified local business(es) you were willing

to invest in, what amount would you consider investing or

lending?

Under $500

$500 to $1k

18%

22

$1 - $5k

22%

27

$5 - $10k

22%

27

Under $500

$500 to $1000

$1000 to $5000

$5000 to $10,000

$10,000 to

$50,000

5

10

15

20

25

30

35

40

45

50Q19. Which of the following describe you?

0

Oregon State University student

Oregon State University alumni

Oregon State University

staff/faculty

A small business

owner/manager

An employee or form

er

employee of a large corporate

employer

Seeking employment or change

in employment

Retired

An “accredited investor,” as

defined by the SEC …

A “sophisticated investor,” as

defined by the SEC …

Thank You!Questions / Contact

Economic Vitality Action TeamAction Team Leader, Robert Mauger

(541) 250-0542 Robert.Mauger@maugerlaw.com(541) 250-0542 Robert.Mauger@maugerlaw.com

Next Meeting, Friday, February 28, 2014, 2:30 PM

Business Enterprise Center, Conference Room

460 SW Madison Ave., Suite 1

www.sustainablecorvallis.org

www.facebook.com/SustainableCorvallis