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Part 1 of 4 in the Community Owned Business Series
Community Owned Businesses (COBs) are funded and partially owned by neighbors and other people who support the launch of a small business through an equity crowdfunding campaign.
What’s Equity Crowdfunding?
Equity crowdfunding is like Kickstarter but instead of a reward, supporters get a small ownership piece in the campaigns they support. Learn the basics of equity crowdfunding here.
The Community Percentage
Community Owned Businesses operate with one slight difference to other small businesses: a small percentage of gross revenue is diverted into a community dividend pool. For example, if Joe’s community owned coffee shop gets $90,000 in sales over a 3 month period, his business might have agreed to put 2% of those sales or $1,800 into a dividend fund for the business’ supporters.
Ongoing Money to Supporters
Supporters of community owned businesses receive a proportional amount of the community dividend pool as a check from the businesses they support on a semi regular basis. For example, if you put $500 into a campaign that raised $20,000 to launch a new small business, you might receive $45 every three months as a dividend for your support.
Learn how you can get involved in the community owned business movement here and stay tuned for the other three parts of this four-part series:
Part 2: How to Turn Supporters into Advocates
Part 3: How to Sell a Small Business with Equity Crowdfunding
Part 4: Community Owned Businesses as a New Asset Class
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