Investing and the Catholic Economy
How investment will work in the Catholic economy:
The reason to invest in Catholic businesses is, simply, to build more Catholic businesses. The end result is to support the Catholic family and allow us to engage the culture more on our terms. This can reduce the pressure on those employed in the corporate sector.
There are 3 types of support: grants, loans, and equity
Grants should be available to worthy Catholic start-ups and other businesses. People at the parish level, or wider, can contribute to a pool of funds that would be distributed to worthy businesses who had advisors.
Money could be granted with certain parameters and due diligence. Even if it’s a fairly small amount, like $10,000, it would help Catholic businesses survive and thrive. The good ideas would get funded while the poor ideas or the ideas that need more thought, would not.
We could have a pool of funds for loans at the local (parish) level or larger (diocesan/city) level available. An example of this is old immigrant parishes had credit unions where they gave micro-loans so other immigrants had some working capital to get going. Why not replicate this model?
It would include angel investors and venture capitalists. We should have a pool of funds where investors would purchase equity in Catholic businesses. This can happen at the parish level.
There can also be a pool of several people who are willing to invest. This would be a willingness to lose their money, because there’s a risk with investing. But it can benefit Catholics without means to start businesses
These investors could have non voting shares, voting shares, seats on boards, etc.
How would we do this? Let's focus on 3 types of people: the entrepreneur, the investor, and the advisor.
1. The Entrepreneur
This is a person who wants to start a business, expand, or improve a business. He would need a place to run the business. If it’s a brick and mortar business, it would need investing or private capital to acquire the building.
Some businesses only need a co working space, which is just internet and a desk to work. Can this be done in a parish building? There might be tax implications for this, so it will need to be explored as a possibility. But it should not be a detriment to the parish.
The entrepreneur will need ideas. How do we get ideas and input? We would bring in speakers and experts who can give advice. Advisors who have experience running businesses can help avoid common mistakes businesses make in the early stages.
Part of the process of the entrepreneur is identifying people who have entrepreneurial talent within the parish, and helping them.
2. The Investor
Angel investors come in right after the founder uses their own finances to start up Investors don’t have to be professional investors.
Investors want deal flow, which is pre-screened deals presented to them. This process would require mentoring and coaching. It could be groups and boards of advisors within the parish, diocese, or city. The advisors would have a screening checklist for the investors. Then the investors could give grants, loans, and invest for equity.
3. The Advisor
People within the parish/diocese would sit on advisory boards. They would help people who want to start a business with all the problems that someone would encounter as a start-up. Also, existing businesses could get help from the advisory board.
These models already exist, so they can be done on the parish level and diocesan/city level. Why not do this to help Catholics run businesses?
Do you want to help us form a Catholic Economy? We are not just talking about this. We are doing something about it. Find out at The Catholic Economy Project website.