Investing in place refers to the practice of investing locally in your own community. There are some key benefits to this approach. Firstly, investing locally creates a multiplier effect, recycling money through the local economy multiple times. Secondly, it builds stronger communities by supporting local businesses and creating local jobs. However, there are also challenges such as lack of deal flow and ambitious entrepreneurs. Overall, investing in place can generate good returns while making a positive impact.
Local investment creates a multiplier effect for the community
As discussed at the Colorado Capital Conference 2018, keeping capital within the community results in a multiplier effect of 3-5 times. This is because the money circulates repeatedly through the local economy rather than being extracted by corporate headquarters elsewhere. For example, an investment in a local restaurant creates jobs for local people. Those people then spend their wages at other local businesses, which recirculates the money. This multiplier effect amplifies the economic impact of the initial investment.
Investing locally builds stronger communities
Investing in local businesses helps the community by supporting entrepreneurship and creating jobs. It enables small businesses to grow and thrive. This is impact investing in the true sense – generating financial returns alongside social benefits. For example, investing in a local clean energy startup both offers returns to the investor, and helps the environment by reducing reliance on fossil fuels. As stated at the conference, economic development requires keeping capital within the community.
However, there are challenges when investing locally
Local entrepreneurs often require more education and support compared to those in major startup hubs. They may lack experience pitching and desire overly modest goals. Local investors need to help entrepreneurs see the bigger picture. There are also limitations on available capital, with fewer large funding sources. Building relationships and community is key to overcoming these challenges.
In summary, investing locally can provide good returns and impact
Despite the challenges, investing in place has significant advantages for both investors and the community. With the right education and mindset shift, local entrepreneurs can thrive. And patient local investors who build genuine partnerships are more likely to find the gems. By integrating social impact alongside financial returns, the Colorado community provides a model for doing well while doing good.
In conclusion, investing locally creates a multiplier effect to amplify economic impact. It builds community by supporting businesses and creating jobs. With effort to educate entrepreneurs and build relationships, the challenges can be overcome. Investing in place provides a means to generate returns while having a positive impact on your local community.