SAN FRANCISCO (CBS SF) — The recent anger directed at Wall Street is also stoking a new philosophy of investing known as “Slow Money.”
Entrepreneurs who take their lead from the slow food movement ideal of locally-grown gathered at San Francisco’s Fort Mason Center Wednesday for a three-day conference to meet investors who don’t see a contradiction between small scale and big growth.
The idea is for individuals to invest small amounts of money directly into local food-related businesses. Investments generally start around $1,000.
“By taking a little money out and putting it to work near where we live, we keep the economic benefits of that investment circulating in the local economy,” said Woody Tasch, a founder of the movement, and an organizer of this week’s conference. Tasch said the benefits also include more local jobs and a cleaner environment.
“Where you spend your money, where you place your money, how you hold it, what you do with it. Every one of those is an act of expressing your values,” said Joel Solomon. His investment firm, Renewal 2, is a boutique operation out of Vancouver that invests in companies whose products are fair trade, organically grown or otherwise market green consumer products.
Like Solomon, the small business owners from across the country at the 3rd National Slow Money Gathering want to make money by doing the right thing.
KCBS’ Margie Shafer Reports:
Much of the slow money movement has steered capital to small food enterprises. The Berkeley restaurant Gather has often been held up as a poster child for a new model of finance.
“We really had to be creative about how we used SEC laws and various guidelines and exceptions to craft the equity deal that we crafted so that we could involve both accredited and unaccredited investors,” said co-owner Ari Derfel.
Where slow food encourages the preservation of regional cuisine, slow money lets anyone with even $100 or $1,000 put their money in a values-driven investment.
Derfel and his partner got their venture off the ground with funding from 100 investors from the community, rather than the 35 deep pocketed investors attorneys recommended they seek out instead.
“An accredited investor is not an easy person to find. They have to have a significant network. They need to make a lot of money. And we said, that’s not going to work for our model. We need a lot of people making small investments.”
And after four months, a restaurant that treats vegetarians and omnivores equally with a menu of food entirely from California that’s 50 percent meat and 50 percent veg turned a profit.
Slow money isn’t just for start-ups. The companies at Fort Mason represented many different stages of growth serving both small and large markets.
This experiment in citizen finance still faces hurdles, in particular the onerous regulations that make modern stock markets so efficient, said author Amy Cortese.
“It’s easier for most people to invest in a company halfway around the world than one in their own backyard because securities laws make it difficult for average people to invest in a small private company,” she said.
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