It’s been a head-spinning year. But amid the chaos, a lot of good progress was made in the community capital field. Here are some of the top stories of 2018:
1. Coops Rising
The United Nations designated 2012 the International Year of Cooperatives, but we would argue 2018 was the year that cooperatives really began to take hold in the modern U.S. economy. In particular, worker coops—a form of cooperative where workers have a stake in the ownership, profits and management of an enterprise—have experienced a resurgence amid a concentration of corporate power, stagnant wages and wealth inequality.
At the same time, an ecosystem is developing to help new cooperatives get off the ground, including new financing initiatives from players such as the Evergreen Cooperatives and Transform Finance, to an accelerator that helps cooperatives scale and thrive.
2. Crowdfunding Gains Traction
Regulation Crowdfunding turned two in 2018, and like the toddler it is, has grown impressively. Reg CF closed out 2018 with nearly 1,500 offerings launched to date, $175 million in investor commitments, and 180,000 investors, according to Crowdfund Capital Advisors.
There are now 46 approved funding portals, and new platforms continue to join the fray. 2018 saw the notable additions of SVX US, Crowdfund Mainstreetand Buy the Block, the first African American (and woman) owned portal.
But the real story has been the results: companies (especially those owned by women and minorities) are getting funded at impressive rates. Crowdfunded companies are getting follow-on funding. And, while it’s still early, investors are getting repaid.
3. #UsToo: New Funding Options for Women and People of Color
When it comes to startups, women are creating more businesses than their male counterparts, and African American and Latina women are leading the pack. However, women, especially non-white women, still lag in terms of revenue and job creation. That is changing, as funders set their sights on underserved—some would say underestimated—groups. Venture capital firms are adding women and people of color, and new funds are spying opportunity in formerly overlooked groups. To name just a few of 2018’s debuts: Sundial and Unilever’s New Voices Fund; Grameen America’s Social Business Fund; the Entrepreneurs of Color Fund. They join innovative, grassroots-driven like the Runway Project.
New accelerator programs also debuted, including Village Capital’s VC Pathways and the Miller Center for Entrepreneurship’s wonderful Social Entrepreneurship at the Margins, focused on migrants and refugees.
4. Real Estate: Putting the ‘Place’ in Place-based Investing
The focus of local and impact investment has traditionally been small business ventures. But as rapid development and rising real estate costs threaten to displace many families and local businesses, affordable real estate is becoming an imperative. New solutions arose in 2018 that aim to keep property not just affordable, but in community hands. The approaches are as innovative as they are diverse, ranging from shared equity financing to cooperatives that emphasize democratic ownership and permanent affordability.[…]
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