About The Investment Opportunity
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 do not play an active role in assisting friends to pool their money to make an investment in People’s Community Market. However, individuals are free to organize among themselves as they wish to pursue their economic interest.
You can donate money directly to People’s Community Market. However because, we are not a tax exempt or charitable organization, your donation will not be tax deductible. If you’re looking to make a tax deductible donation we suggest making a donation to our sister nonprofit organization People’s Grocery.
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.
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.
About The Store
People’s Grocery is a non-profit that was founded in 2002 has operated numerous food projects (including the Mobile Market and the Grub Box), urban gardens and nutrition education programs in West Oakland. Peoples Community Market (PCM) is a for-profit business that is working to develop and operate a neighborhood food store in West Oakland. PCM has emerged out of the work and experience of People’s Grocery, but it is a separate organization with its own board of directors and staff. The two organizations may partner in a number of ways such as conducting community outreach, providing job training to PCM’s employees and offering nutrition education and health services to its customers. Both organizations were founded by Brahm Ahmadi.
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.
There are many complex factors behind why supermarkets can’t or won’t open stores in lower-income urban areas. A few of the main reasons are:
- Higher development costs in densely populated urban areas where there is limited land availability for building larger supermarkets. One study concluded that it can cost up to 30% more and take up to three times as long to build a grocery store in a densely populated urban area.
- Supermarkets tend to suffer from higher employee turnover in lower-income areas where fewer residents have job training and job experience. Large supermarkets also lack the ability to provide the in-depth employee training and ongoing support necessary to mitigate this problem.
- Supermarkets tend to experience high rates of product loss from shoplifting, employee theft, damaged and spoiled products, and errors in recording the purchase and sale of products.
- Most supermarket chains are unable to customize their product mixes and services to the preferences and needs of specific communities. These large chains can have a difficult time adapting their products to the desires of communities with a high degree of cultural diversity.
We believe that there are solutions to all of these issues. Designing the right solutions requires fresh thinking, local insight and an investment of time and effort. Most supermarket chains aren’t able to make that kind of investment. There’s also evidence that independent grocers that are locally rooted can more effectively address these issues and can perform better and serve better in lower-income areas. We’re creating People’s Community Market to demonstrate solutions that can work and how independent stores can excel at providing those solutions.