Kevin Lynn is an Analyst at Social Enterprise Associates. He lives in Portland, OR, and can be reached at kevin@socialenterprise.net

Introduction
As an increasing number of business start-ups have a bottom line that take environmental and social returns into account, a persistent shortage of capital continues to threaten the success of small businesses across the country. Even fewer resources exist for those enterprises that prefer to remain true to their local values and are unwilling to accept the remote control of venture capitalists and angel investors.

For an individual, it's even harder to get involved. Most people don't know of any way to support community ventures beyond donating their spare change to Starbucks' "Create Jobs for America" program. Fortunately, innovative measures at the margins are helping to find the link between engaged citizen-investors and worthy community ventures.

The Direct Public Offering (DPO)
Many of us have heard of an IPO, or Initial Public Offering, but what's a DPO? A DPO is a Direct Public Offering (see Wikipedia's definition here). As Amy Pearl from Springboard Innovation explains, "Briefly, it's a way to legally offer shares for investment in an enterprise to people who don't usually get to invest directly in anything. That would likely be you and me, probably, since this group comprises 96% of us."

The important difference is between "accredited" and "non-accredited" investors. Accredited investors are determined by SEC regulations and individuals only qualify if they have a net worth of $1 million or more. Anyone not fitting under the SEC regulations is considered to be a non-accredited investors and is subject to different rules.

Securities regulations put in place during the height of the Great Depression were designed to protect both investors and borrowers from fraud, but it was only with the passage of the JOBS Act in 2012 that small businesses have been able to carve out significant exemptions from some of the most onerous regulations.

Now, community ventures can use a DPO to raise up to $1 million from up to 500 non-accredited investors without triggering major SEC disclosure rules.

Technology is changing the name of the game
The initial push for the JOBS Act came from proponents of crowdfunding (for a longer discussion of crowd funding, check out our recent article). New technologies have created a grey area where the regulations designed to protect investors from fraud are closing potential opportunities for community ventures to raise necessary capital.

What we need is a qualitative shift in these regulations. The SEC and other regulatory bodies have to recognize that when a community chooses to invest in its own venture, it is a reflection of a set of values that do not need to be regulated.

Upcoming events
Remember, when you shop and bank locally, you are strengthening and empowering your community. Get involved by getting connected to other "localvestors" at some of these upcoming events:

Shop Small is November 24th, the Friday after Black Friday. Grow your local economy by shopping at small businesses in your area.

Be sure to tune in to Drew Tulchin's TEDx talk this Saturday, November 3rd, on Local Investing For All. Check back on our site to see the video of the talk.

The Re:Forum, hosted by Springboard Innovation in Portland on November 8th, is a chance for members of the community to learn more about what local investing really means.

Check out your local BALLE and LION chapters for calendars with a list of upcoming events.