Investing on main street refers to investing in local communities and businesses, rather than just sending capital to Wall Street and big corporations. There are two major reasons why investing locally on main street is gaining popularity: investors are increasingly focused on their own communities, and entrepreneurs are thriving locally. However, there are also challenges like lack of access to talent and ambitious thinking. To invest smartly on main street, entrepreneurs need to find mentors, build relationships and see the bigger picture beyond their locality. Overall, investing locally creates a positive multiplier effect through job creation and recirculating money in the community.
Investors now focused on local communities
Earlier, investors used to mainly put their money in Wall Street and big tech companies in few states like California and New York. But data shows that 81% of new businesses don’t get any venture capital or bank loans. This capital concentration leads to job losses in smaller communities when profits are transferred back to big corporations. But now investors realize the importance of investing locally because it leads to 3-5 times more economic impact by recycling the capital within the community through local job creation and growth.
Entrepreneurs thriving in local areas
Research shows that the number of new startups established annually has declined over the past 30 years. But this doesn’t mean lack of good business ideas. Entrepreneurs in small towns face challenges like lack of funding and ambitious thinking. But with the right mentorship and access to local capital, they can build sustainable and self-sufficient businesses, just like coastal entrepreneurs do by bootstrapping first before raising money.
Educating local entrepreneurs is key
Local entrepreneurs often lack connections and don’t do enough research before pitching ideas. They need education beyond domain knowledge too – like how to choose the right investors, raise just enough capital and keep control of their companies. Building relationships and communities is crucial as an entrepreneur’s network can fill skill gaps and attract investors. They should also learn to think bigger and have a compelling vision before approaching investors.
Investing locally creates a multiplier effect
When capital is invested and retained locally, it leads to 3-5X more economic impact because the money recirculates to create jobs, development and growth within the community. Entrepreneurs get not just funds but also mentors, resources and strategic advice from local investors who are invested in the community’s success. Such collaborations and clusters drive innovation and make the local economy self-sufficient and sustainable.
Investing locally on main street is critical for creating jobs, supporting local businesses, retaining capital and driving economic growth in small towns and communities. With the right education, relationships and access to local capital, entrepreneurs can build successful and sustainable companies.