Author Archives: Amy Pearl

Why Rural Towns Get Left Behind, and What We Can (Should) Do About It

If it doesn’t make a lot of money, is it not worth doing?

That’s the general response to just about everything in the business world, from helping a company raise money, to offering legal services, to brokering business buy-outs when someone needs to retire. There are many important middlemen who grease the wheels of an economy, helping provide unique expertise. When a place is small, and business isn’t always brisk, this expertise is often missing. These services are as essential in rural towns as urban ones, so what (and who) picks up the slack when a service would make all the difference to success but simply doesn’t exist?

RedTire gets it.

YES! Magazine just put out its April 2017 issue, and it contains an interesting article about a service headquartered in Kansas, called RedTire. It helps ensure that businesses in need of a new owner don’t go out of business, by assisting with finding and settling in a new owner. Their tagline is great: “Retiring and aspiring business owners can apply today.

Photo cred: Jay Lowell, Concordia Blade-Empire, via KU School of Business

In Concordia, Kansas, population 5,000, they made sure the local pharmacy stayed open, a huge boon to a tiny town that has relied on that business for the last 40 years.

“RedTire has nothing to do with tires; instead, the name is short for the phrase “Redefine Your Retirement.” The staff do everything from appraising the business to vetting the buyer, and even offer counsel after the deal is done.”

So, how do they do it when other for-profit businesses can’t or won’t? As always in rural towns, it takes a village, or, a creative partnership where people wear a variety of hats.

Turns out the University of Kansas hosts (and essentially underwrites) the RedTire program. The program’s success is built around the involvement of business students who staff the service. They get paid as they learn in a real world setting, while making a real difference in their community. Brilliant!

The kicker? The program does not charge for its services. This has caused folks interested in replication to turn away. I say, phooey on them. They don’t get it.

Our experience in rural Oregon.

Photo cred: Baker County Tourism

I run a nonprofit program called Hatch Oregon that helps entrepreneurs raise money using a new “crowd-investing” law in Oregon. It’s a new model of raising capital from your community, and has the power to transform the inequitable financial system. Turns out that many of our clients are in rural communities, outside urban Portland. Frankly, most of Oregon is rural. And guess what, they haven’t got much money.

The USDA provided us with a grant a few years back, to offer our program in rural Joseph (pop. 5,000) and Baker City (pop. 10,000) in rural NE Oregon. We did train the regional economic development district staff (funded by state, federal, and foundation dollars), but no one else in town was beating down our doors to learn how to provide the same service as a business. When servicing small business and rural communities, there’s just not much money in it.

What are rural town leaders supposed to do?

For the most part, they do without. Right now (early April), I happen to be working in a small town in Scotland (pop. barely 3,000). Yesterday, I picked up the local paper in the cafe/craft/bakery shop. The leading cover article was about the Royal Bank of Scotland pulling the plug on over 20 banks in small towns all over Scotland. This coastal area of Fife alone will lose six of their branches on high streets up and down the coast. Town leaders and citizens are “angry and dismayed.” While the reason sounds plausible (400% increase in online and mobile banking) there’s an entire generation of folks who don’t trust the internet with their money, and local tourism depends on a local bank. What will these folks do? Who cares?

Decision-making based on how much money an entity can make is an increasingly dangerous one. Whether it’s fiduciary duty to shareholders (which has been called into question recently) or just a regional firm with their heads in the numbers and their hearts in the freezer, it’s a slippery slope to reduce every decision to a quantitative data point. It also implies the decision-makers won’t feel the effects. These days, it’s harder and harder to avoid the fallout. What we do to others we do to ourselves, in very important ways. Taken together, this profit-over-people mindset of making decisions, especially effecting people in small places, feels like a social and economic catastrophe waiting to happen.

Let’s reach across silos.

Photo cred: Baker County Tourism

I believe we’ve got to do what Kansas did, and reach across silos to create mutually beneficial partnerships with all kinds of unusual suspects. Universities, community colleges, nonprofits, hospitals, libraries, corporations, tourist organizations, and government agencies should begin to look at themselves as community catalysts in new ways.

Perhaps every town needs a “Community Collaboration Coordinator” who is paid by a bit from each entity (now there’s an idea). This person is given the time and authority to identify, troubleshoot, and suggest solutions with the aim of creative collaborations and mutual benefit. Rather like a regional solution “ombudsman.”

What do you think? What else should we be doing in rural communities?

The post Why Rural Towns Get Left Behind, and What We Can (Should) Do About It appeared first on Hatch Innovation.

Entrepreneurs, Prepare Yourselves for the Crowd


Raising money from your community takes a different approach.

HTF_AmyPearlSome of you may have heard of our InvestOR Ready Accelerator, a program designed to prepare entrepreneurs for a community public offering. The truth is, it could more aptly be called a ‘slow’erator. While it jumpstarts some things for entrepreneurs, it reveals other things that need to be examined more closely—such as financial projections, planning your market strategy, and how much money you really need. Many of the entrepreneurs we have worked with come into the program feeling confident about their business plans, but they often realize they’re not quite ready as they thought.

This “big reveal” is the real power and value of our accelerator. And here’s the trick—doing a community public offering, the act of asking your community to invest in you and believe in you, is an entirely different experience than asking an angel or bank for money. Sure, there are overlaps in what you need to provide, but there’s a difference in the response you get. When you ask a banker, a venture firm or an angel investor for money, they are experienced in reviewing plans and often know much more than you do, so their questions are extremely targeted. However, when you put up a community public offering, you suddenly have as your market your Uncle Joe, your next-door neighbor, and a kid from the next town over. The questions they ask turn out to be some of the best questions an entrepreneur can get, often even being the hardest to answer.

The crowd comes first.

The first thing to understand about a community public offering and our accelerator is that dealing with crowdfunding includes crowd-gathering and crowd-building. So we start with helping you build your crowd. Establishing campaign ideas for both your fans and your investors as soon as possible is critical. We talk about building both your reputation and recognition through social media, email, and word of mouth.
We also set expectations for the work ahead. Founders and small teams are already trying to launch or grow a business and raising money is often a full-time job. We know what it’s going to take, and so we help you prepare for that work.
The second thing we look at is the readiness of your business for raising money. What does it mean to be ready to raise money? It means being ready for those basic questions and ready to answer them in the clearest way possible. It turns out this is the most difficult thing for entrepreneurs to do. Tell me in one sentence what your business is about. I’ll bet you can’t do it. Why do you need money? Specifically. Exactly. What is your market and how do you know?
We also help you confirm 1) what kind of entity you should be (or become) that is right for your business’ future, and 2) what kind of financial deal you should be offering. Legal and financial experts also join us to explain the different opportunities for business models.
The third section is writing your prospectus. The prospectus is a unique document; writing it can be an exhilarating, clarifying, frustrating, terrifying experience. This thorough document outlines the terms of your financial deal and reveals everything material about your business, all while being as compelling as possible.
Much of the accelerator process is working with your peers in the cohort. As you write your prospectus, you get peer reviewed as well as have others in our community provide feedback. The end result is a document that anyone can understand and be inspired by. As a combination of your dreams and hard work, your prospectus reveals your personality, your way of looking at the world and how that unique perspective is manifested within your business.

Keep it simple.

The thing we repeat over and over again is that while you will be enamored with whatever it is you’re making—whether it’s baseball bats, ice cream, beer and so on—investors want to know about three things when they talk to you. The first is you. The second is your business—not your product, but your business viability and what value it will create in their community. And third, the terms of the deal—when and how they will get their money back. That’s it. Simple, but a lot harder than it sounds.

The post Entrepreneurs, Prepare Yourselves for the Crowd appeared first on Hatch Innovation.

100 have ComCap16 tickets so far…You?

A letter from Amy Pearl: I’m really excited about the speaker lineup for our second annual community capital conference, ComCap16! It’s shaping up to be the first-ever national gathering of leaders and experts working to implement the new state-based local investing...

The post 100 have ComCap16 tickets so far…You? appeared first on Hatch.

A Woolen Mill, Baby Goats, and a CDFI!

I want to introduce you to a clever finance guy who is masquerading as a marketing guy. I find this oddly refreshing, aside from the fact that it was so damned successful. John Kuhry of the California EDFC,...

The post A Woolen Mill, Baby Goats, and a CDFI! appeared first on Hatch.

Crashing and Burning: The Stock Market, Money, and You

When yields on the 10-year Treasury note fall below 2%, you know the final vestige of a “safe” investment on Wall Street has fallen. Is the shit hitting the fan and should you pay attention? We...

The post Crashing and Burning: The Stock Market, Money, and You appeared first on Hatch.