Vegan investing encourages entrepreneurship
Aug 15, 2020 — Have you noticed how few vegetarian restaurants and businesses are available in south Chicagoland? Vending trucks and popups help to alleviate the problem, but only temporarily. The same is true for booths at vending events.
Enter the Vegan Investing Club, where we vegetarians have an opportunity to put our money where our mouths are. I’m not talking about those occasional visits we make to vegetarian favorites. Nor do I mean the efforts we make to create meetups so that larger numbers of us patronize these businesses.
No, I mean pooling our money, however little that is, with others to encourage fledgling vegetarian entrepreneurs to take that step in the dark to make others aware of feasible nonflesh options to feed and clothe themselves.
According to the website www.veganinvestingclub.org , membership involves three phases – joining, receiving invitations to invest from 1-2 test companies, and being notified each month of 10 prospects. The pluses for investors are reports on the vegetarian economy, notices of new offerings, and testimonies from other vegetarians who have successfully invested in equity crowdfunding. When the business invested in becomes successful, shareholders could obtain perks like discounts in advance, bonus shares and other bonuses.
Equity crowdsharing differs from angel investing and venture capitalism because not all the private investors have to be affluent. In other words, Joe and Jacinta Blow can invest in vegetarian companies they believe in – even if they only have $100. Once they decide to invest, they can become informal ambassadors for the company by encouraging others to patronize the business. They can cash out when it goes public or is acquired by another business.
With equity crowdsharing, prospective business owners don’t have to depend on just wealthy people to start their dream because others who believe in them are contributing to the pot. They also receive free advertising from their informal ambassadors.
The cons to joining the club are similar to those for other stock investors: losing money if the business fails, difficulty in selling shares unless the business is acquired or goes public, and decreased percentage in ownership as other investors join.
Currently there are no plant-based mutual funds because not enough plant-based stock companies exist. The new US Vegan Climate Exchange Traded Fund tracks the Beyond Investing US Vegan Climate Index, which “excludes companies engaged in animal exploitation, defense, human rights abuses, fossil fuels extraction and energy production, and other environmentally damaging activities.” Even so, 15 percent of the ETF’s assets are in megacaps – Microsoft, Apple, Facebook, J P Morgan Chase and Cisco – despite complaints that the companies fall short in social responsibility.
Claire Smith, chief executive officer of the index, credits its refusal to fund companies that profit from the sale of animal flesh with eliminating 43 percent of S&P 500’s market value. As a result, Amazon, Walmart, McDonald’s and Berkshire Hathaway are absent from the index.
So until enough plant-based businesses go public, investing clubs, angel investors and venture capitalists are necessary for the current and potential ones to exist.
Are you willing to help fledgling vegetarian businesses stay afloat despite COVID-19 or other obstacles? How can you do that besides investing in them?