= seen as a funding and ownership mechanism for a Community-Owned Business
"An investment fund provides venture capital (equity) or loans (debt) to an entrepreneur. Unlike traditional venture capital, community-development investment funds have less interest in high returns and more interest in stimulating new businesses – especially great business ideas that cannot gain access to capital (or sufficient capital) through traditional channels. Instead of owning and operating a business directly, a community can use this tool to invest in one or more businesses – and, potentially, revolve the capital into more new businesses over time.
Many examples exist of community investment funds organized to foster new industries such as manufacturing, software development, or biotech. However, few investment funds have been organized to invest in new, small-scale retail, service, or arts and entertainment businesses.
The National Trust Community Investment Corporation (NTCIC), for example, makes real estate investments in projects that qualify for historic or New Markets tax credits. Beginning in the 1990s, the Local Initiatives Support Corporation (LISC) began making equity investments to establish supermarkets as shopping center anchors in neighborhoods with underserved food alternatives.
The LISC retail project began with a $2.4 million investment in a Pathmark built in East Harlem, New York, by the Abyssinian Development Corporation. In 2005, in the Fruitvale neighborhood of Oakland, California, LISC, through the Unity Council Community Development Corporation, provided a $580,000 loan to acquire a site for a new farmers market.
Originating out of an identified need for local jobs, in 2008, the Unity Council launched "Made in Oakland" ("mio," for short, or "mine" in Spanish), a storefront-based apparel design and manufacturing business. The project was capitalized with money from the Unity Council and a jobs-creation grant from the U.S. Department of Health and Human Services. As a condition of the grant, mio was required to find a for-profit partner in a related industry. It partnered with Los Angeles-based The Evans Group, which creates patterns and samples for emerging designers. The Unity Council and mio director/designer Hiroko Kurihara expect the social and retail venture to create 60 to 70 new jobs for low-income Fruitvale-area residents.
As towns like Powell and Saranac Lake have raised capital through the creation of shareholder corporations, a community could apply the same approach to raise venture capital and make equity investments in new downtown businesses. Even without creating an investment fund, individuals or groups can make loans to small businesses using social-venture lending programs like VirginMoney (formerly CircleLending), a service used to generate formal promissory notes and third-party-managed repayment systems." (http://www.preservationnation.org/main-street/main-street-now/2010/marchapril-/community-owned-businesses.html)