[T]he Vermont State Employees Credit Union announced a new partnership with a company Wednesday that could boost a change in state policy that eases rules on how Vermont businesses can raise money from local investors.
The company, Milk Money, hopes to help the small businesses raise investment funds. The company facilitates crowdfunding on a local level — something like KickStarter for Vermont. It was launched in July 2015.
In 2014, the state adopted a new policy that makes it easier for Vermonters to invest in in-state businesses. Some small businesses said the previous policy was difficult to navigate and could require a significant legal or other financial investment.
Under the new policy, companies can raise up to $2 million in stock equity from investors. Businesses can recruit supporters through social media or other means, and each individual can contribute up to $10,000 each. Investors are not required to be accredited.
VSECU’s subsidiary, Vermont Heritage Financial Group, invested in Milk Money. VSECU CEO Rob Miller said the partnership indicates a new initiative for the credit union of trying to encourage more partnership around local business.
Economic Development Commissioner Joan Goldstein celebrated the partnership at the event Wednesday. She said that the new regulations allowed businesses to bridge the gap between being a very small business and growing to larger sizes.
Vermont’s regulations had been outdated she said, but the shift in policy for the Vermont Small Business Offering Exemption, or VSBOE, in 2014 was significant.
“Now Vermont has really the most progressive local investing regs in the country,” Goldstein said.
The response in the early days of the new program has been significant, she said.
After having 14 filings in as many years under the old VSBO regulations, seven businesses filed under the new regulations in the last year alone, she said.
Goldstein called the swell in numbers “a vote of confidence that this is really the right direction.”
When Jack Gilbert opened a restaurant in Manchester, he didn’t anticipate the demand that would emerge for his sauces beyond the restaurant.
Now Gringo Jack’s hot sauces and other products are common on shelves around the state. The company is in the process of expanding its line of salsas, barbeque sauces and chips, and Gilbert said they’re in part looking to Vermont investors to support their growth.
Speaking at the event, Gilbert said that his business draws heavily on a broad range of other food producers in Vermont, and manufactures in state.
“We’ve all been supporting local. We’ve all been buying local,” Gilbert said. “It’s now time we start investing local.”
Shirley Richardson, owner of Vermont Chevon, recently heard from an Indian restaurateur in Minnesota who is interested in sourcing goat meat from her.
Richardson launched her company in 2011. The small operation converts dairy goats from the farm to meat. Demand is growing, she said, but she’s limited by the number of hours she can put in.
Now Richardson is looking for investors under the new VSBO regulations to help her take the next step. She’s hoping to raise about $50,000 to fund a new sales and operations manager position. That can help her expand her business and serve wider markets, she said.
Miller, the VSECU CEO, celebrated the partnership between the credit union and Milk Money.
“We believe that great things happen when people come together,” Miller said.
Read the story on VTDigger here: With new alliance, VSECU explores state’s updated securities rules.