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Place-Based Investing Gathers Steam

April 2016


Recently, local investing has started to attract more buzz among investors and entrepreneurs. They’re interested in strengthening local and regional economies, as well as small companies, through what’s also known as “place-based” investing. In fact, a large contingent of people now consider it to be a form of impact investing.

Case in point: Canopy, a new social enterprise with a platform for making place-based investments in the Pacific Northwest accessible to a large number of investors.

“Place-based investing is a powerful way to strengthen local economies,” says Craig Muska, president and founder. “Leveraging investment capital to support local businesses, entrepreneurs and infrastructure development has a significant, long-lasting impact within those communities.”

Founded last year by Meyer Memorial Trust, The Russell Family Foundation, and The Laird Family Foundation, Canopy was born out of a Seattle-based family office with an interest in impact investing; it’s intended to make grants and investments in affordable housing, education, the environment and nonprofits. All those organizations have a slightly different take on investing in their region, while, of course, looking for promising investments for the 95% of their endowment they’re not required to distribute  annually.

Most notably, Canopy’s founders want to accomplish a few goals. For one thing, they’re trying to address the lack of many impact investing opportunities in the developed world. That’s because the vast majority of these efforts are focused on developing nations. And while, of course, these places benefit from the investment, there still is a need for such activity closer to home, they felt. Plus, potential investors have been hobbled by doing their own, discrete due diligence and research, a distinctly inefficient use of their resources.

Ultimately, Canopy is after developing a model for regional investing that could tie together different organizations at various stages of the investment process, uncover difficult-to-suss-out local investment prospects, address the lack of established investment funds and adopt a slower, patient-capital approach more suited to many local opportunities.

To that end, with the University of Oregon and others, Canopy launched an effort to survey and map the investment opportunities in the region by analyzing points of connection among regional players and gaps in the flow of capital, all aimed at uncovering evidence of collaborations and developing new initiatives. It just debuted an interactive online map that displays this information.

In addition, the company is helping to research regionally focused funds, thereby helping investors to collaborate, share information and ramp up the due diligence process. They’re also supplying that information to fund managers. And they’re going to train entrepreneurs and fund managers in how to structure impact investment funds and raise money.

For now, Canopy  is focused on building up four funds in the region; they were chosen from a pool of 30. Eventually, the group is going to broaden its scope to include, say, angel investor groups and direct investment in local businesses.

About its business model: Revenues will come from members’ subscriber fees, plus consulting and educational work done for clients. If it all succeeds, more areas in the country might follow Canopy’s example, increasing opportunities for  investors–and entrepreneurs–in other regions.


This article was written by Anne Field from Forbes. This reprint is supplied by BNY Mellon under license from NewsCred, Inc.  

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