Direct Public Offerings (DPOs) are a way to raise capital by selling securities directly from a company to large numbers of unaccredited investors in the public. DPOs are an alternative to both private offerings of securities to small numbers of accredited investors and to underwritten public offerings in which brokers sell securities to their clients.
We are utilizing the DPO model to raise the equity portion of our project financing (as working capital) because, as a startup business proposing to operate a grocery store in a lower-income neighborhood, we haven’t been able to secure capital from traditional private and institutional investors. The DPO allows us to implement an authentic and grassroots community investment campaign in which residents of California, of diverse economic backgrounds, can become Founder and Shareholders in creating People’s Community Market.
Federal securities regulation in the United States only allows small business conducting public stock offerings to take on a total of 500 shareholders. In order to ensure that we reach our fundraising goals while being limited to a total of 500 shareholders, we have set the minimum investment at $1,000. We feel that this is a low enough amount to allow many California residents of diverse economic backgrounds to purchase shares. We have partnered with Credibles to allow individuals and families, for whom $1,000 is still too high of an amount, to help create People’s Community Market by pre-paying for groceries through the purchase of Credibles in amounts between $50 and $500.
We have partnered with Credibles to allow individuals and families, for whom $1,000 is still too high of an amount, to help create People’s Community Market by pre-paying for groceries through the purchase of Credibles in amounts between $50 and $500. Additionally, we have created a support role, called Champions, in which individuals and households who want to support our mission, beyond investing, spread the word about what we’re doing to their own network of family, friends, neighbors and co-workers. Please visit our Be a Champion page to learn more about how you can help us reach our goal.
People’s Community Market is a startup business that is currently in its pre-development phase. We have undertaken a thorough planning process and have assembled a seasoned leadership team. We have raised over $1.2M in working capital through a public stock offering in which over 400 California residents purchased shares in our company. The success of that campaign helped us establish a credible negotiating position with property owners, financial institutions and key partners. We are now working to secure a site, as well as institutional financing for the acquisition of the site and construction of the store. Once we have secured a site, we plan to launch a second campaign to raise $786,000 in additional public investment.
The timeline for when we’ll open our store will be determined by when we’re able to reach an agreement with a property owner for a location, as well as when we’re able to secure the institutional financing necessary to acquire the site and construct the store. While we currently have good momentum in our negotiations with property owners and financial institutions, we don’t yet know when we’ll complete these efforts. Once we have secured a site and the necessary financing we’ll move to finalizing our construction phase. We estimate that construction will take about six months to complete.
We have conducted extensive study of the West Oakland trade area and identified the areas within the community that are most optimal for a retail store location. From this study we have targeted a cluster of sites that are located at the center of the West Oakland community at the busiest intersection in the neighborhood. This location offers many ideal characteristics including a high residential population density in the immediate vicinity and easy access by public transportation with 10 bus stops and 5 bus routes within a 5-minute walking distance. We are currently negotiating with three different property owners to either purchase or lease a site for our store. We anticipate securing site control by the Summer of 2015.
In November 2012 we launched a grassroots DPO campaign to raise $1.2M in seed capital by selling preferred shares to California residents who want to support PCM’s vision, mission and proposed social impact in West Oakland. We successfully reached our $1.2M goal at the end of 2013. At the point, we “retired” the campaign and shifted our focus to securing a location and institutional financing. We plan to launch a second DPO campaign to raise $786,000 in additional public investment once we have secured a location and institutional financing. However, California residents who are interested in buying preferred shares in our company don’t have to wait until we have launched a new campaign to purchase shares. Shares can be purchased at this time by following the step-by-step process outlined on the Buy Shares page.