Invest Local: Putting Your Money Where Your Mouth Is
You may shop and eat local but do you invest local? Houston-based NextSeed started in 2015 and has made investing locally possible in a way that wasn’t available before. NextSeed is a community-driven investment and financing platform, which means it’s the newest, and one of the only forms of true local investment available to the average Houstonian. It’s changing the way people in Houston—and across the US—invest their money.
How does it work? With NextSeed, you choose a local project to invest in and your money goes to the business to help with its startup costs.When the business starts generating revenue, you begin receiving payments in monthly installments - with a potential financial upside. Bob Dunton, co-founder and CTO of NextSeed says, “We’re trying to change the way people think about investing. It can be something that’s local and therefore more real to investors in their day-to-day lives.” This new way of supporting your community and the businesses in it can make the investment process feel more personal and tangible.
NextSeed’s business model was made possible within the last few years. The Texas State Securities Board voted in October 2014 to adopt its own investment crowdfunding rules. Title III made this kind of investment possible nationally when it went into effect in May 2016. Crowdfunding laws were created because in general small businesses struggle getting access to loans and investors. Business owners often have to give away the majority of equity in their business just to get the funds to start their business. These laws changed regulations and gave local mom and pop businesses greater access to new funding sources, without having to give away their equity in the process.
Texas was among the first states to make this kind of crowdfunding possible so it was a natural place to start NextSeed. Abe Chu, co-founder and CMO shared, “It made sense for us to start here.” As a Houston native, he knew the area and the potential of the city’s small business community.
Abe attended Bard College at Simon's Rock, an alternative college in Great Barrington, MA, where he met the other founders and the seeds of NextSeed started. At Simon's Rock, he met Youngro Lee and Bob Dunton—the school encouraged them to see themselves as a force for change in the world. After graduation, they went their separate ways but stayed in touch. When Youngro, who went on to pursue a law degree, saw the changes in regulations around crowdfunding he started talking about it with the others. He was excited about the idea of local investment and as they discussed the idea together, they realized that they had to take the risk to see if they could make a successful business helping small businesses get access to funding. In the process they found that their passions and skills suited the business; Youngro with his legal background, Abe in marketing, and Bob in tech. Bob said when the time came, “I knew I was always going to regret it if I didn't take the leap.”
Now, with 32 businesses funded successfully through the platform, NextSeed is making a difference in Houston and beyond. Bob shared, “We’ve worked with a co-working space, a boutique hostel and a hair salon—it’s these types of businesses that are driving local economies and creating jobs."
But is local investment for everyone? NextSeed thinks so. We have a range of investors on our platform - some invest a few hundred dollars, and others invest thousands, said Dillon Sorenson, Content Marketing Manager. It’s an equal-opportunity investment option that’s lowered the cost of entry for those who want to invest in something other than large stocks and bonds. And, since it is a national platform, you can invest in places that matter to you. Whether it's where you're living now or where you're from—you can make a difference to the community, and businesses, you care about.
Beyond just helping businesses, NextSeed is a platform that is built to connect people. "We think having people more invested in local community businesses will strengthen the economy and help people work together, treat each other well, and grow together. We think that's pretty powerful," shared Abe.
Do you have a business plan you’re developing? Do you know someone who is? NextSeed would love to hear what you’re thinking about, the new projects you’re working on. Reach out to them at nextseed.com and they’ll be excited talk to you to see if you’re project could be a good fit for their platform.
