Investment Crowdfunding Platform Launches In Ithaca

The buy local movement isn’t new. But now, an initiative in Ithaca is offering a different kind of opportunity: to invest in local businesses. Crowdfunding platforms like Kickstarter and GoFundMe are nothing new and are donation based. The new Ithaca Exchange is investment crowdfunding. 

“Investment crowdfunding works with businesses to create actually SEC approved investment opportunities. Which means the businesses need to promise some type of financial return to investors.”

That’s Stephanie Geller. She’s the founder of Community Wealth Builders in Baltimore. The group works to develop more equitable and inclusive neighborhood economies. They launched their Maryland Neighborhood Exchange program in 2019. 

“Even existing black businesses had a very hard time accessing growth capital. And some of it's due to just systemic racism that's built into the system. Others just have to do with how banks you know, it's very hard to get commercial loans to begin with.”

Data from the US Commerce Department shows that minority-owned businesses are more likely to be denied credit, and to pay higher rates when they can get loans. Plus the wealth generated from interest payments typically leaves the local economy. 

“So, through this model, people can invest in local businesses for as little as $10, $100. It's up to the business to set. But in terms of creating asset building opportunities, especially for populations that have been left out of traditional asset building, this model is amazing, right? Like it's there's so much knowledge someone has to gain to begin investing in the stock market or to begin investing in complicated securities. But if you know the business in your neighborhood, the pizza shop, is raising community capital, you can walk in there, you can see their business, you can talk to their owner. So it's a really cool way, particularly in Baltimore with a high proportion of residents that have been really left out of traditional asset building opportunities, for people to start building wealth.”

The Ithaca Exchange is a new initiative of Local First Ithaca and is closely modeled on the Baltimore project. You can meet Stephanie and learn more at an event starting at 6:30 Wednesday night at Buffalo St Books.