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Reply To: Live Chat with Crowdfunder – Friday 17 July

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The other thing to add is that in addition to them being great at raising the often significant sums projects need, there’s two other advantages.

Firstly, being owned by the people who will make or break the enterprise in the future is really helpful. If I live in a community and the pub’s been celarly sturggling, when a new landlord come in, and she’s really nice, but whilst I might make a mental note to use the pub more often, at the end of the day, whilst it does benefit me to have a pub in my community, the risk is all hers.

But if I own it, I’m invested in the success. It matters to me that my pub stays open and thrives. Firstly, it’s the way I might get a small reutrn on my invetsment, and secodnly, it’s my responsibility, not the Landlord’s. I’ve ceased to be a vicarious member of my community, who wants the good stuff without putting my own time and money and committment on the line, and am instead an engaged member. That’s great for the pub, great for the community I’m not more part of, and good for me too.

Secondly, if you do have a capital project, who else is going to back it? Social investment gets a lot of buzz, but they often want returns of 7-10% which can be frightening to people. How do you pay for that in the first place? What if you can’t pay it – will they seize our building etc? The same is true of banks.

The alternative might be grants, but they get harder and harder, and they make you dance a tune maybe you don’t want to dance to, but feel you have to. Or even if you get it, do you really have that community support? The wrong time to find out if the day you open the doors.

So community investment seems to tick all the boxes – it proves you’ve support, it’s patient capital who aren’t gagging for a financial return, but want a social return. We say it’s the right kind of money, from the right kind of people over the right timescale for the best kind of motives.