The biggest news in the investment world right now is perhaps Twitter’s stunningly successful initial public stock offering last Thursday, which left the company valued at approximately $24 billion. Some pundits, however, see Twitter’s IPO as another indication that we’re poised at the edge of a tech bubble similar to the one that decimated Silicon Valley in the late 1990s, when investors threw boatloads of cash at companies with unsustainable business models.
Though a widely used social media site like Twitter isn’t exactly Pets.com, there are some investors that, for reasons of an impending bubble or otherwise, are rejecting the current high-growth tech paradigm. Instead, they’re focused on “locavesting,” or the grassroots creation of a sustainable new economy through impact investing in local and social enterprises. Angela Barbash of Ypsilanti-based sister companies Reconsider and Revalue is one of them.
Barbash says there is a lot of research that supports the idea that the true backbone of the American economy is small businesses, not companies like Twitter and Facebook. Despite that research, investors continue to favor big, high-growth tech companies over mom and pop retail operations. “Economic development agencies haven’t quite gotten that [research] yet,” she notes.
Barbash is a financial advisor who worked at Edward Jones for five years. In 2008, she says, she saw the writing on the wall. “Clients didn’t want to be tied up in global investing,” she explains. “There was no integration between local investing and global investing.”
In 2011, she went to a Slow Money conference in San Francisco. Although there were lots of financial professionals there, she couldn’t find a single one that was aware of a local mutual fund. One person told her there would be no local mutual funds until someone found a way to make money off them.
It was with that conversation in mind that Barbash and her partners launched Reconsider and Revalue in June. Reconsider, for its part, works with small businesses and gets them certified to be investment-ready by reviewing their business plans and financial projections. It also offers contract CFO and COO services to social enterprises.
Reconsider looks at capital not only in financial terms, but in human and spiritual
