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Equity Crowdfunding Gets A Boost In Vermont

Steve Zind
Shirley Richardson hopes to attract Vermont investors to her goat meat business with a type of investing known as equity crowdfunding. Richardson's company and two others are participating in the model through a web portal called Milk Money.

There’s a new effort underway to boost opportunities to put small start-up businesses together with Vermont investors. The hope is to encourage a type of investing known as equity crowdfunding. 

Not many events provide complimentary billy goat meatballs to those in attendance. But Shirley Richardson’s samples went quickly Wednesday in the lobby of VSECU, the Vermont State Employees Credit Union in Montpelier.

Richardson owns Vermont Chevon in Danville, a company that converts surplus livestock from Vermont’s goat dairies into premium meat products.

“Whole goats. Processed goats. A chef or a butcher or a grocery market may want a goat in a box. Those are our products,” Richardson says.

Her company is one of three currently seeking equity crowdfunding investors through a web portal called Milk Money.

The event was held to announce that Milk Money is getting an infusion of cash in the form of an investment from a subsidiary of VSECU.

Milk Money’s existence was made possible only in the last two years by a change in Vermont regulations known as the Vermont Small Business Offering Exemption.

The change allows Vermont companies to solicit capital from individuals who want to invest up to $10,000. Prior to the changes, only wealthy, accredited investors qualified.  

Equity crowdfunding differs from the more familiar type of donation crowdfunding done through websites such as Kickstarter. In equity crowdfunding, investors purchase stock or convertible debt in hopes of receiving a return.

Milk Money’s co-founders Janice Shade and Louisa Schibli help businesses decide whether they’re a good match for equity crowdfunding and navigate the regulations involved in seeking investors. 

“We can also help by doing investor education and bring investors looking at our site on a regular basis looking for investment opportunities,” says Shade.

“That’s a key point," adds Schibli. Right now Vermonters don’t even know that they can do this."

Since the regulations were changed, seven Vermont companies have made equity crowdfunding investment offerings.

Shade and Schibli say there is potential to increase the number significantly. They hope Milk Money will be part of that, thanks to the VSECU investment and the resources and credibility that come with it.

Rob Miller, CEO of the credit union, says his organization wants to help businesses like Milk Money not only through investing but also by providing them with access to its marketing and to a statewide network of offices that can host educational programs.

Miller says there are limits to what credit unions and other lenders can do from a regulatory and risk management perspective to help small start-ups.

He says equity crowdfunding can be an effective way to fill an important void that non-profit organizations and government also try to address.

“What’s really impressive about this is it’s even more sustainable, because it actually allows the community to step forward and support local businesses,” he says. “When you have the community stepping forward and supporting financially those local businesses, they’re also going to be patronizing those local businesses, increasing the odds that they’re going to be more successful.”

Shirley Richardson says Milk Money is helping her raise capital for a Danville goat meat business that would be hard to find elsewhere.

“We’re building a new industry,” she says.  

Milk Money charges an up-front fee for businesses it serves. It is one of two businesses in Vermont currently offering equity crowdfunding services. The other, Designbook, is a broker-dealer that works on a commission basis.

Steve has been with VPR since 1994, first serving as host of VPR’s public affairs program and then as a reporter, based in Central Vermont. Many VPR listeners recognize Steve for his special reports from Iran, providing a glimpse of this country that is usually hidden from the rest of the world. Prior to working with VPR, Steve served as program director for WNCS for 17 years, and also worked as news director for WCVR in Randolph. A graduate of Northern Arizona University, Steve also worked for stations in Phoenix and Tucson before moving to Vermont in 1972. Steve has been honored multiple times with national and regional Edward R. Murrow Awards for his VPR reporting, including a 2011 win for best documentary for his report, Afghanistan's Other War.
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