Now that the US Securities and Exchange Commission has finally developed some preliminary rules for crowdfunding, I’m starting to see an interesting trickle of new hyper-local crowdfunding sites focused on local business investments and local community projects. For example, I just received a note yesterday about Dubvee, a West Virginia-focused platform, seeking investments for a new glass factory in the state. Other recently opened local sites include CoPhilly (Philadelphia), Adirondack Gives (NY), IowaArt (NE Iowa), and the Pluribus Fund (DC). I’m barely scratching the surface with these examples, but I think we can expect a boom in local crowdfunding sites in 2014. (For background on crowdfunding, see this helpful infographic from BALLE).
This is a very promising trend as long as expectations are managed. Local crowdfunding makes sense as part of a wider Buy-Local or Invest-Local effort. Setting up a platform is not too complicated, but marketing and managing the effort requires some work and needs to be integrated with other local strategies. Likewise, while a crowdfunding site won’t single-handedly transform a local economy, it is just one more tool to help local business and to keep investments flowing in a community. Moreover, while it’s nice to encourage local investment in local projects, there’s no reason why local businesses shouldn’t also try to attract outside investment from national or global crowdfunding sources. Yet, if a handful of new projects or new businesses can get a leg up in the marketplace, that’s a great accomplishment as well. Look for more on this topic in the coming year.