A Tipping Point for Values-Based Investing

In 2020, EntryPoint had great conversations with 40+ thought leaders across the country on The Cackle and we all want more!  So in 2021, we are continuing the conversation with those guests to dig a little deeper into topics that matter. Like values-based investing. 

Keep Cackling with Angela Barbash from Revalue

When Emily Heintz and I spoke in the early days of the COVID-19 pandemic, a shift in the world was already afoot. We had no idea what the following year would bring societal energy to put our money where our values are.

On The Cackle, we discussed why aligning our investment strategy with our personal values was beneficial and necessary for the revitalization of our communities, some of the cool resources that exist, and how people could learn more. So much more has happened since then, as the values-based investing movement hits a tipping point and becomes more mainstream by the day.

Wait what??
If you are still swimming in alphabet soup trying to wrap your head around the terms used in the video or here in this post, you are not alone. Here is a great article from our friend Sonya Dreizler on the terms. And here is a great graphic from our friends at Adasina Social Capital about the spectrum of investments, from extractive to regenerative.

The Rise of Values-Based Investing

In November, the U.S. Forum for Sustainable Investment (US SIF) released the 2020 Trends Report. US SIF tracks all investment dollars that are screened for environmental, social, or governance criteria in the U.S. and releases the figures every two years. This is when we learned that 1 in every 3 dollars in the U.S. is now screened for values, up from 1 in every 4 dollars two years ago, which itself is up from 1 in every 20 dollars 10 years ago.

Next, in response to pressure from investors and companies in the face of COVID, the Securities and Exchange Commission (SEC) made two critical moves in November to help smooth out wrinkles in the fundraising scene. The first was to increase the amount companies can raise under Reg A, Reg CF, and Reg D. In particular, Reg CF (Regulation Crowdfunding – the tool that allows everyday folx to invest in everyday businesses) now allows companies to raise up to $5 million, up from $1.07 million originally. Second, companies can now ‘test the waters’ and safely do ‘demo days.’ Did you just hear that? It was the sound of a half a million attorneys, accelerators, and company fundraisers breathing a sigh of relief for the first time in a decade.

Finally, in the big picture, in 2020 capital commitments to Reg CF issuers rose by 77.6% from $134.8 million in 2019 to $239.4 million in 2020. The average raise increased from $298,331 in 2019 to $308,978 in 2020. COVID came calling and investors answered. Over 700,000 investors have mobilized, and this does not even include state-based regulation data which has not yet been collected.

Making it Easier to Get Started

Now, let us talk about the cool new resources that exist in the world since I last hung out with Emily on The Cackle. In September, the Local Investing Resource Center went live with new content we created for the Advisor page. Why would we create such rich, free content for our competitors? Because other advisors are not our competitors, they are our co-creators of a better world. If you are a DIYer investor or a business about to go out to the community for capital, you will find these resources valuable too.

Then, in October, the Michigan Economic Development Corporation published a cool field guide we authored for them, so the technical assistance providers and economic developers among you have a handy one-stop-shop for the things you need to know if you want to get your feet wet with all these new tools available to the businesses you are serving.

But hey, Revalue is by no means the only cats in town putting phenomenal work out into the world. In just one year, a whole slew of new resources has gone live! Check out Michael Shuman’s latest book on using self-directed IRAs to invest locally or his Local Economics 101 video series. Wander over to the Sustainable Economies Law Center’s The Next Egg to hang out with investors from all over the country who are exploring how this all integrates with their world, but without the commitment to a single investment advisor. If you are a business owner thinking of raising local capital, check out Jenny Kassan’s book and support community on the topic or Crowdfund Better’s tools and tips on their website. Thinking of launching a community investment fund? There is even now an accelerator for that out of Boston Impact Initiative and a handy handbook from the National Coalition for Community Capital (NC3)!

It is hard to overstate how much of a tipping point we are at for values-based investing – societally, socially, environmentally, consciously. The clip at which people are turning their attention to deeper discovery of themselves, their role in the world around them, and how systems must change to support a more generative today and tomorrow is inspiring and relentless (in all the good ways). We hope you have fun tapping any or all of these new resources!

About Angela Barbash & Revalue

Angela Barbash is CEO of Revalue, an independent registered investment advisory firm founded in 2013, located in Ypsilanti, Michigan. Revalue is an employee-owned Certified B Corporation® that provides fee-only financial planning, public investment management, and community investment due diligence services designed for values-driven organizations and investors.