Invest local

When traditional methods of raising capital, such as bank loans or fund-raising drives, aren’t available — or aren’t enough — for a nonprofit or startup business looking to achieve its funding goals, crowdfunding portals like Kickstarter, GoFundMe, and Indiegogo have of late stepped in to fill the void.

However, a new player has entered the fray with a novel approach to the crowdfunding model and the specific aim of directing Wisconsin dollars to Wisconsin businesses and organizations. nVest Wisconsin, a collaboration between the Wisconsin Bankers Association (WBA) and Crowdfund i94, enables entrepreneurs or businesses looking to raise money for a project to source contributions through its website.

What sets nVest Wisconsin apart from other crowdfunding sites is its commitment to investing exclusively in Wisconsin companies and ideas, and doing so through two avenues: direct donations toward a project or investment in a project or business through a new securities portal, which will allow people to essentially buy shares of emerging local companies to help them get started.

Mike Semmann, president of nVest Wisconsin and executive vice president and chief operations officer for the WBA, says the idea for the unique crowdfunding program has been three years in the making and came about as a direct result of appeals from WBA’s member banks.

“The banks were asking if there was another place where they could refer businesses or organizations when they’ve got capital needs beyond what the bank can provide,” Semmann says. “[The WBA] was already looking at emerging financial technologies, so we did our research and last May did a beta run on our own custom software to try to help a small festival raise a little bit of money.”

That initial foray into crowdfunding, for New Glarus’ Saengerfest, worked, so the WBA and nVest Wisconsin decided to branch out and conduct an official pilot of the program. That just-concluded pilot ran through December and included Special Olympics Wisconsin, the Madison Scouts Drum & Bugle Corps, Habitat for Humanity Wisconsin, and the Zoological Society of Milwaukee.

According to Semmann, all four nonprofits raised money toward their project goals through the nVest Wisconsin portal.

“It was really neat seeing those donations come in, a little bit every day,” Semmann notes.

Teaching the crowd

With a successful first run under its belt, nVest Wisconsin is devoting significant efforts during the first part of 2016 to educating Wisconsin residents about its crowdfunding model.

“It’s interesting because most nonprofits already have a traditional fundraising mechanism in place, so this is new for them, too,” Semmann explains. “Culturally, what we’ve found is while certain people around parts of the Midwest and the coasts have adapted to crowdfunding, by and large in Wisconsin there’s still a learning curve.”

Thankfully, the relationship with WBA is paying off in an interesting way.

Semmann says the idea for crowdfunding, believe it or not, actually began with community banks.

“It used to be that the farmer, mill owner, doctor, or banker in a small community, who was looking to expand and had a need for increased capital, could actually do that by talking to their neighbors around a kitchen table. Through nVest Wisconsin, that process is now virtual.”

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The next wave

Semmann says nVest Wisconsin already has about two-dozen new organizations and businesses interested in utilizing the site to raise capital for projects in 2016.

nVest Wisconsin is currently taking inquiries, and all anyone has to do to start the process is fill out a brief online form at donate.nvestwisconsin.com. From there, nVest Wisconsin will work with the organization on the timing and other elements of a fund-raising campaign to make it as successful as possible.

In addition, Semmann says the future of the securities side of the site is something he’s very excited about.

“We’re seeking eight different potential investment opportunities. We’re asking people who are looking to raise capital to come and talk to us to see if nVest Wisconsin would be a good fit. We hope to have those eight different projects selected between now and the end of May.

“We’ve seen the ‘buy local’ movement,” Semmann continues, “but there’s also potential to invest local, so people have a tangible investment, something they can drive by and see every single day. It’s a natural extension of what we see in Wisconsin, that people want to know a little bit more and be engaged in many different ways in their community. This is another great way that they can be engaged in their community, by making a direct investment in the businesses and organizations that serve them.”

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