West Chester Currency

Did you know that back in the day (in the 1700's) West Chester had its own currency? This currency enabled day to day business transactions and circulated money within town. In a way, the West Chester LLC aims to do the same thing but on a year to year basis. We put investment dollars into the greater West Chester area businesses as loans or private equity positions. A portion of the earned income is reinvested in the community creating a revolving investment fund.

The West Chester LLC currently has 38 members, most of whom live and/or work in West Chester. The idea is that we are investing in our community. While the "invest local" slogan is a good way to be community minded, it's not only about that great feeling of helping our local economy. We also look for good investments and as a member-managed LLC, we are able to sit down and meet the people or companies we fund face to face. The alternative is investing in big corporations that we have no direct contact with and never will. While we have a personal stake in the outcome of Wall Street's efforts, we have no personal interaction with them. As a shareholder in the LLC, we are able to interact with the people who we are supporting on a daily basis, and spend our dollars in their shops.

Micheal Shuman has been talking about using this method of investing for several decades. In recent lectures he proposes amendments to SEC securities laws specifically aimed at enabling all people to invest locally, no matter their income level. If you take it a step further and create local stock exchanges, we could create millions of jobs at almost zero cost. He also reflects that sole proprietorships (most independant businesses) generate 3 times more profit than C-corporations (most large businesses) per unit of business. It is a compelling argument for opening up trading at local levels, especially when you consider this next point he makes.

Current SEC regulations require pages upon pages of disclosure documents to be read and signed by investors prior to making an investment. If that same investor walks into a casino to place a bet of the same dollar amount, he is expected to do nothing more than blow on some dice. Understanding the risk factors involved in an investment decision or a blackjack bet is important, but, there are some glaring differences in how a casino or a small business is expected to disclose that risk to investors. It is a process so laborious and expensive for small businesses that it becomes almost impossible to afford. Shouldn't our small businesses have the same or more opportunity to generate investors as casinos do?

Shuman has some great ideas about how to change antiquated security laws to enable local economies to thrive.

Take a look:

http://www.youtube.com/watch?v=RWM0o1rfWwE