Reconsider and Revalue: Fostering Community Impact Through “Locavesting”
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terms, she says. It goes beyond pure profit to consider what other benefits a company provides its community. Because of that analysis, Reconsider says it is painting a much more in-depth picture of a company’s worth to investors.
According to Barbash, a big part of Reconsider’s mission is to educate local and state economic development offices, as well as faith-based organizations, about the importance of community impact investing. This summer, Reconsider partnered with the Washtenaw County Office of Community and Economic Development to release a report assessing community capital strategies and suggesting more impactful ways to deploy municipal investment dollars.
This is where Reconsider’s sister company, Revalue, comes in. Revalue is registered firm that is dedicated to “fostering deep connections between clients, their community, and their resources.”
Barbash says that Revalue charges 1 percent per year to manage between $250,000 and $1 million of an investor’s capital. It currently has $1.2 million in assets under management and hopes eventually to grow that amount to $100 million so that it can seed its own investment fund.
However, Barbash admits that, so far, it’s been a challenge to convince municipalities to abandon the old paradigm for community impact investing. “We have found over the past six months, as we’re really making an effort to reach out to progressive communities or investors, that while one or two people [within the entity] may get it, they don’t have the support of the rest of the decision makers,” Barbash says. “It’s an uphill battle. We’re fortunate that the Washtenaw County board was pretty progressive.”
As Reconsider and Revalue do outreach work around the state, there is hope for locavesting on the horizon. House Bill 4996, introduced by State Rep. Nancy Jenkins (R-Adrian), would create an exemption to existing securities regulations that would effectively enact the equity crowdfunding provisions of the April 2012 JOBS Act.
HB 4996, which passed 108-0 in the House last week, would, under certain circumstances, allow companies to raise capital through online crowdfunding platforms. Under current regulations, businesses who use a site like Kickstarter are technically asking for donations in exchange for gifts or other rewards. If HB 4996 is passed in the Senate, Michigan will be the third state nationally to allow businesses to trade equity in their company in exchange for crowdfunding investment.
Barbash went to Lansing to testify on behalf of the bill, which also essentially allows individuals to make equity investments the same way investment firms would. “Consumers are becoming more aware of the impact that they can have both with their buying decisions and the decisions they make about their investment dollars,” she says.
Reconsider also recently announced it will be the “media partner” to Indianapolis-based Localstake, an online investment website that doesn’t need a change in regulations to operate. Localstake is an online marketplace connecting companies raising $1 million or less with individual investors. Investors can register on the site to look at the various companies raising money and request due diligence documents.
Barbash, who calls Localstake “an awesome platform,” says it was looking to expand to Illinois or Kentucky, but Reconsider made the case for that expansion to happen instead in Michigan—and was successful. A kick-off reception will be held from 5 p.m. to 7 p.m. on Dec. 4 at Ann Arbor SPARK East to celebrate the announcement.
So while Barbash and the rest of the Reconsider team clearly have some work to do, she says she’s optimistic that locavesting will catch on in Michigan. “We’re trying to get the word out to investors,” she adds. “We’re really the only firm in Michigan that’s independent and passionate about community impact investing.”