A little over a year after launch, Community Wealth Builders has a new crop of Baltimore companies seeking capital and investors on the Maryland Neighborhood Exchange. Instead of using Robinhood to invest in a company nationally, the platform allows residents to invest in the mom-and-pop shop next door.
For business owners, it opens a new avenue for access to funding. The lack of capital for Black-owned businesses is a systemic issue. In 2020, 3% of the $147.6 billion in venture capital invested in U.S. businesses went to Black founders, according to Reuters. Community Wealth Builders seeks to bridge that gap for local entrepreneurs by preparing businesses to launch campaigns on crowdfunding platforms like Wefunder and Mainvest. These investments offer equity in the business, democratizing a process that tends to be in the hands of an elite few. It’s an approach made possible by changes to federal regulations in recent years.
At the same time, Community Wealth Builders director Stephanie Geller is working with businesses in Baltimore.
“She helped us connect the dots,” John Matthews, CEO of Prothymos Innovations told Technical.ly, adding that she “opened our eyes to funding vehicles that were advantageous to us.”
But it’s not just businesses Community Wealth Builders supports. Like the name implies, the community is proactive in informing residents in Baltimore about their ability to be investors and own a stake in the businesses in their neighborhood.
“We’re also trying to educate people in [Baltimore] about grassroots investment and crowdfunding,” said Geller. The goal is to “get people to understand the impact they can have on the local economy by taking a small percentage of their investment dollars from Wall Street to Main Street.”
Often, that investment can be as little as $25 or $100, according to Geller. For a recently launched campaign for e-Bless, $100 is the minimum investment.
The flagship product for Prothymos Innovations, e-Bless is an electronic giving and gifting platform to help churches and other nonprofits save money on taking in donations, and reward people for giving. Think Cash App, but for religious orgs and charities. Where other donation apps like Givelify or Tithely are only a one-way street towards nonprofits, e-Bless allows nonprofits to send money and set up a reward system for givers.
Matthews has gone through the circuit of pitching to different investors, and having to know somebody that knows somebody to get him through the door into the rooms where investments happen. In these rooms, the outcomes for Black founders can be dim, if they can even get in the room at all.
“Equity crowdfunding puts more control in the hands of the founder, and to me that’s priceless,” said Matthews when it comes to starting a campaign on platforms like Wefunder or Mainvest. “You set the terms. Instead of someone trying to muscle you out of 20, 30% of your company because they’re an early investor, you say I may do 20% or 25.”
Other companies on the exchange are:
Donte Kirby is a 2020-2021 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Robert W. Deutsch Foundation. -30-
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