Andy's Book Review: "Locavesting: The Revolution in Local Investing and How to Profit From It."

Locavesting: The Revolution in Local Investing and How to Profit From It, by Amy Cortese; reviewed by Andy Terrell.

“You can save your community. Nobody else is going to swoop in. The government is not going to come in and dump buckets of money on the street. Corporate America is not going to come in and save our town. It’s our town and our responsibility to make sure that we continue to exist”
- LoriSchuh of the Clare (Michigan) Downtown Development Corporation

​I recently watched the film Too Big To Fail, based on Andrew Ross Sorkin’s book of the same name. I remember feeling frustrated and even a little angry at the disconnect between Wall Street and Main Street. The repercussions of the bailout were not favorable to the smallest of small businesses who found credit lines and potential investments into their businesses dry up.

​A week later, I picked up Amy Cortese’s optimistic book Locavesting: The Revolution in Local Investing and How to Profit From It, a thought-provoking look at how investors and businesses all over the country are connecting through alternative ideas. Many of these alternatives use local sources, and Cortese does a terrific job in explaining how these programs work in simple, layman’s terms – something much appreciated by someone (me) who struggled with the most basic economics courses in college.

Cortese moves across the spectrum with programs such as Community Development Financial Institutions (CDFI) through community banks and credit unions to Peer to Peer (P2P) or “crowdfunding” opportunities whereby many, perhaps hundreds, of investors make small amounts of money available. Oftentimes, these investors make these funds available not because they hope to make a significant return but simply because they believe in what they’re doing.

​SEC regulations, written in the 1930’s with little realization of how the future world would change, are being challenged by many of these groups in an attempt to change the rules set to favor the large institutions. This book was published in May 2011 and the results of these challenges are not yet known. If successful, Cortese believes that the playing field will level somewhat and more of these alternative, grassroots movements will form.

​Cortese also discusses the explosion of cooperatives occurring all over the county. There may be no better example of locavesting than the co-op model. Cortese uses the example of the Blackstar Co-op Pub and Brewery in Austin, Texas. Over 2200 people invested money in amounts ranging from $100 to $3000 to raise over $600,000 to build the brewpub. While still in relative infancy (they just celebrated their fourth year in business), this community-owned brewpub stands as a model of community support and belief in a project. It shows how good things occur when everyone pulls together.

​Locavesting reads as a “how-to” guide for small businesses while taking time to explain concepts that may be foreign to many readers. It’s a hopeful look at how tens of thousands of people all across the country are looking for a different way to invest and help keep their local businesses alive. As someone involved in our own “Think Local” movement, I’m keeping my fingers crossed that we’ll see more of this kind of thinking in the future.