Local investors get creative with new tools

Peter Quinn led a team of local investors to buy Quimper Mercantile in a direct public offering.

Peter Quinn led a team of local investors to buy Quimper Mercantile in a direct public offering.

When the local general store went out of business, the residents of Port Townsend, a small Washington city northeast of Olympic National Park, didn’t have many options for buying snow shovels and other everyday merchandise.

Instead of racking up thousands of collective miles making the 50-mile round trip drive to the nearest Walmart, a handful of residents decided to pool their money and open a new general store.

For funding, they turned to a process called a direct public offering, which allows communities to pool their money and invest in a new company — or, in this case, a new general store.

Although little-used, direct public offerings are gaining in popularity as investors pull money out of the stock market in favor of investing money directly in the community.

The effort is part of a much broader movement called “local investing” that, with the help of websites like Kickstarter, is increasingly connecting mom-and-pop investors with the business down the street.

Although Portland is considered behind other cities, it’s quickly catching up. Several local resources have sprung up to connect small businesses and retail investors.

• Springboard Innovation plans to use the direct public offering route to open an eastside incubator for startups. It’ll also host a series of seminars on local investing this year.

• LION:PDX is a new organization modeled on the Port Townsend success and seeks to match local businesses and investors.

• Slow Money Northwest has tentatively planned a June event that would connect small business owners and retail investors.

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