#RebuildTheHood2020: I plan to disrupt inner city development through a money pooling method used by other communities for at least a century
On January 31st, 2020, I’m launching Neighborhood Grocery’s equity crowdfunding campaign, offering 200,000 shares of company stock to Michigan residents to help us raise the capital to acquire our first grocery store location in Detroit. As of today (January 24th, 2020), I’ve received over $25,000 in financial commitments from over 450 interested investors. I’m incorporating a method, crowdfunding, to unite the hood. This method has just been made legal, but its been used effectively by organized communities for at least 100 years.
Mark my words: Equity crowdfunding will be the fundraising future for civic development, particularly in cities like Detroit. More people are stepping up to battle issues like displacement, and poverty through social entrepreneurship. With the creation of the JOBS Act of 2012, the way entrepreneurs can secure capital has been disrupted, putting more power into the hands of grassroot enterprises looking to leave a better social footprint on the world. But if we really think about it, the concept of crowdfunding, especially for community development, isn’t new at all.
Think about it: How are our nation’s Chinatowns, Arabtowns, Koreatowns, Mexicantowns, and others created and maintained? They’re practicing crowdfunding, just in an informal way.
In 1994, Cecil Adams described the money kye, an informal money pool mastered by Korean Americans where, “10–20 people contribute to a cash pool each month. The ante can range from $75 or $100 to thousands of bucks. The pot is given to a different member each month, who invests it as he or she sees fit, usually in a business, home purchase, or the like, although there is nothing to prevent somebody from blowing it at the track. When everybody has had a turn, the club disbands. The money is not a loan and you don’t have to pay it back.” That’s basically a form of crowdfunding. More than Koreans, Adams says, “The concept is hardly confined to Koreans; Chinese have the hui, West Indians the susu, and Ethiopians the ekub.” We are learning a technique others have spent at least a century mastering.
The uniqueness of these money clubs lie in the amount of success they have. There’s no laws to prevent people from defaulting on a crowdfunded loan or investment. That should make these pools highly risky, right? Wrong. These groups of people value community. They view each other as family. They attend church together. All of their children attend the same schools. There’s no way to avoid the shame of defaulting on your “family” so they simply don’t do it.
What about rules? The management, and maintenance of these communities are in the hands of the people who live there, not government officials, or big corporations. Most of all, there’s a widespread sense of pride, and effort to preserve the beauty of the land and their cultures because of their collective ownership.
Most importantly, these clubs build the foundations to their area’s economies. These communities believe in supporting their own. They shop for all of their essentials in their neighborhoods. This local money multiple effect spins out luxury businesses — bars/spirits spaces, jewelry stores, etc.
Although informal, these money clubs are basically the crowdfunding vehicles for these communities. The great thing about today is that Americans have the same opportunity to accomplish civic economic development through legal means. One of the most groundbreaking pieces of legislation produced in our American history is the Jumpstart Our Business Startups Act of 2012 by President Barack Obama, that allows small businesses the ability to sell equity in their businesses to anybody in the nation regardless of their economic status.
Before the JOBS Act, only accredited investors (Americans with high net worths) could legally invest in American companies. With the creation of donation crowdfunding sites like GoFundMe, we saw the power of common people pooling their funds together for civic efforts. Now, more companies like my community owned grocery store concept Neighborhood Grocery are leveraging technology, and equity crowdfunding to build small businesses in our communities.
In Detroit, we’re seeing gentrification, and displacement. This is the cure. Starting in January, Neighborhood Grocery is pushing to launch the city’s first community-owned, smart grocery store. I’ve put in work in almost every community in Detroit. I think the Islandview/Greater Villages corridor presents one of the greatest opportunities for a concept like Neighborhood Grocery.
We’re geared to launch the fund on the 31st, but interested investors can make a financial commitment now.
View the company’s FAQ sheet here.
Check me out explaining the investment in detail on the company’s Facebook.
RW
Rafa Wright
Instagram — @fairo_rafa
Twitter — @fairo_rafa
Neighborhood Grocery
Instagram — @neighborhoodgrocery
Facebook — @neighborhoodgrocery
