Equal Exchange is a worker-cooperative that sells Fair Trade coffee, chocolate, and other staples. They created a revolutionary way of raising money from investors. Investors receive non-voting preferred stock, and if the co-op is ever sold, any excess revenues would go to another Fair Trade organization. Investors make money via annual dividends, and Equal Exchange actually has to turn investors away. They currently have about 550 investors and have sold over $17M in preferred stock.
Dan’s job is to raise capital and manage investor relations. Dan says that now is a great time to raise capital because, based on his experience, when Wall Street crashes, investors become more aware of the importance of investing in alignment with their values.
Dan has learned from experience that the most important way to cultivate investment is by building relationships with values-aligned people. When talking to potential investors, remind them that all investment is risky, but at the end of the day, whether you make money on your investment or lose it all, it’s nice to feel good about what your money is doing in the world.
When Wall Street crashes, investors become more aware of the importance of investing in alignment with their values.
Once you have investors, you have to communicate with them and not just send them a check each year. Help them see why they should be excited about their investment. Tell stories about your impact—be as specific as possible. Click here for an example of what Equal Exchange sends to their investors.
Keep building relationships with your investors. If you’re ever in trouble, they will be the first ones to support you.
If you’d like to learn more about raising capital using the same principles as Equal Exchange, click here for information on our upcoming online book study of Raise Capital on Your Own Terms: How to Fund Your Business without Selling Your Soul.
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