Community Capital solves a fundamental problem — our economy doesn’t work for everybody, it works great for a very small group of very well connected, wealthy, and powerful people, but works very poorly for the rest of the people. How do regular and ordinary people take back the economy and make it work for them? Community Capital is a way to take back the economy and make it work for everybody. The winner takes it all economic paradigm is on the collapse and community capital is one emerging paradigm to replace the old economy.
What is Community Capital
Community Capital provides an opportunity for every group of people to invest, to profit, to own, and to engage in the civic discourse of their community they live in and become socially, politically, and economically empowered! The goal is to have everyone participate in the economy as investors and not just workers and consumers. If your role in the economy is simply as a worker you are feeding labor into the machine or if you are only a consumer then you are not getting a benefit for your input. The only way to fully be invested in the economy is as an investor or business owner.
In this age of wealth inequality, runaway development and gentrification, it’s easy for communities to feel powerless in the face of rapid change, but real estate crowdfunding is helping change that dynamic. A revolution in early stage finance is changing the way local communities relate to capital formation, real estate development, entrepreneurship, and job creation. The JOBS Act, is transforming how early stage investing and community economic development works. Crowd investing has created the infrastructure for local communities to shift some of the $65 billion investment capital on Wall Street to Main Street and into power to small businesses, real estate development, and tech businesses that lack access to capital to grow and prosper.”
Crowd investing offers an alternative financing source for developers and entrepreneurs and allows the community to be the financiers for these deals. As investors, we don’t always necessarily get access to these deals XYZ developer that we’ve never seen or heard of before comes in and before you know it, the whole neighborhood gets turned around. Crowd investing, allows individuals to play a role in their community. They can actually see their money being put to work, and potentially get a return or interest. Even a single $100 or $500 investment in an apartment complex in Detroit, for example, can help to turn a block and a community around. There is empowerment in community capital strategies.
Robin Hood and Community Capital
A group of researchers in France and Spain may have solved one preliminary puzzle toward getting us to that point. In the paper “Crowdsourcing the Robin Hood Effect in Cities,” published in June 2018, in the journal Applied Network Science, the researchers describe a computer algorithm they created that attempts to “rewire” the complex network of commercial transactions and shopping trips people take part in every day. The goal is to redirect more money to poorer neighborhoods so that the wealth differences between rich and poor parts of a city are evened out.
The study used data from 150,000 people and 95,000 businesses in Barcelona and Madrid, and on the surface the pattern of transactions and the money spent revealed that some neighborhoods were up to five times wealthier than others. But researchers were shocked to find that if as few as 5 percent of commercial transactions were changed—so that capital flows from richer to poorer neighborhoods—income inequality in those cities was drastically reduced, up to 80 percent.
Buy Local Economics
We are not only looking to level the “financial capital” playing field but by empowering aspiring local business owners and real estate developers through crowd investment and community capital. But, we’re also trying to level the “social capital” playing field by connecting these same business owners and developers to the crowd.
Our goal is to create a new paradigm where investors become customers and brand advocates for the local businesses and real estate development where they invest their time, talent, and treasure. We want to create investors that become customers of the businesses they have invested in and promote their brands on social media, provide business advice, or make valuable connections to potential suppliers, customers, or business partners. We are excited about the potential of crowd investing and community capital to significantly strengthen local entrepreneurs and developers social capital over time.
ProjectCrowd is creating an economy where everybody has the opportunity to invest on a level playing field. Ownership is core to power and when everybody has the opportunity to invest and own something in their community they are empowered and will become more civically engaged in their community.
Supporting local-owned businesses will create jobs, build wealth, build up communities and provide economic prosperity. In turn, this can help decrease crime by infusing money into communities, which can then support schools, libraries and community centers. The children of that community — and of all communities — who grow up seeing businesses owned by all races will understand there is a level playing field in the world of entrepreneurship and that everyone has access to the American dream. Don’t our children deserve to live in a world of diversity shown in every facet of our communities? If you want to learn more about how to crowd investing can help your build a strong local economy then Please Visit ProjectCrowd.co!