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Carole Murphy

Carole Murphy, owner of Purse for the People, poses for a picture with Tilita Renata at the Fashion Institute of Design & Merchandising in New York City last week. Murphy presented a 2018 Goddess on the Rise award to Renata for the work she is doing as a Dayak textile artist. Murphy will host a presentation on Saturday on the possibilities of using investment crowdfunding as a tool for economic development and social good.

One Butte entrepreneur is leading the charge locally to spread the word about a new crowdfunding platform that allows investors to put their money toward companies they believe in.

For some entrepreneurs, running a business is about more than just the bottom line. It’s also about concentrating one’s life energy toward a passion.

Carole Murphy of Butte is one such entrepreneur.

In 2015 she founded Purse for the People, a socially driven for-profit company that sells customized handbags made from ethically sourced textiles, championing concepts like fair trade and sustainable practices.

Murphy says she’s now at a point where she’s ready to grow her business. She has a goal of ramping up her manufacturing, but for that she needs capital.

In order to take her business to the next level, Murphy is partnering with Bay Area startup Crowdfund Mainstreet — a platform founded by Oakland-based lawyers Jenny Kassan and Michelle Thimesch. The platform allows investors to put their money where their heart is by providing opportunities to invest in businesses with a social mission.

Murphy will host an information session on Saturday to give locals a 101 on  investment crowdfunding and the new platform, things that she hopes can become tools for economic development.  

Flying from Oakland to Butte for the occasion is one of the co-founders herself, Michelle Thimesch.

Thimesch says what makes Crowdfund Mainstreet different from other crowdfunding platforms like Kickstarter and GoFundMe is that those platforms are contribution-based. In return for your contribution, you may get a coffee mug or a T-shirt in return, but you aren’t making an actual investment.

On platforms like Crowdfund Mainstreet, on the other hand, people can put money toward a company and in return get a stake in the business.

Crowdfund Mainstreet wouldn’t have been possible a few years ago.

For a time, only accredited investors and individuals with high net worth were to make these kind of investments. But that all changed a few years ago when new federal regulations rolled out that allowed everyday folks to buy equity in private companies through crowdfunding.

Companies can now raise up to $1.07 million a year through this method, while investment amounts are capped for individuals, who can invest around $2,200 to $107,000 a year, depending on their income.

At first, Thimesch says, she was excited when the new rules rolled out, which seemed to give small businesses and average-Joe investors a seat at the table in a world previous reserved for the moneyed. The new rules seemed to have the potential to democratize access to capital, and some proponents thought investment crowdfunding could even save the middle class.

A host of new crowdfunding platforms launched after the rule change, but Thimesch says she was disappointed to find that most didn’t measure up to what proponents had envisioned. In all, the platforms seemed to cater to the same old players: the high-roller venture capitalists and the so-called unicorns — the Ubers and the Airbnbs of the world — they lust after.

That’s when Thimesch partnered with Jenny Kassan, and the two created Crowdfund Mainstreet because, in her words, "no one else was doing it right."

There were lots of directions Crowdfund Mainstreet could have gone, but Thimesch says putting Crowdfund Mainstreet’s focus on socially driven companies made the most sense. Like the entrepreneurs on their platform, she and Kassan hope to create change through their business.

Thimesch said one notable capability of the platform is its ability to cater to local communities. Leaders hoping to spur economic development can design a portal on the platform, replete with local branding, which can serve as a landing page that connects local investors and entrepreneurs.   

She added that she’s excited about Butte’s designation as an Opportunity Zone and hopes the platform will help match investors with Opportunity Zone projects.

The Opportunity Zone program came out of the Tax Cuts and Jobs Act of 2017 and allows investors to defer paying taxes on capital gains when they reinvest their money in projects that reside within designated low-income areas.

When asked whether putting socially driven projects in the same room as for-profit capitalism is like trying to shove a square peg through a round hole, Murphy says she draws inspiration from entrepreneurs like John Mackey, co-founder of Whole Foods Market, who she says was able to build a successful values-based company.

In 2013 Mackey collaborated with Raj Sisodia to coin the phrase “conscious capitalism” in their book by the same title.

According to the Harvard Business Review, Sisodia, a business professor, studied 28 conscious companies from 1996 to 2011. In his study, 18 of those companies outperformed the S&P 500 index by a factor of 10.5, perhaps proving that it pays to engender goodwill. 

Butte’s Headframe Spirits is not affiliated with Crowdfund Mainstreet, but the company is an example of a business that seeks to pair its social vision with its economic one.

In 2017, the company became what’s known as a Certified B Corp. — a designation that certifies that a company balances purpose and profit and takes into account the impact of their decisions on workers, customers, suppliers, the community and the environment.

Courtney McKee, who co-owns Headframe with her husband John, said it was a lengthy process to become a B Corp., but one that was worthwhile.

In the end, it simply confirmed for her and John what the company always was and the values they set for themselves in the beginning.

“We’re here for more than creating shareholder returns,” she said. “For us, it’s really important that we leave a positive mark."

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Business Reporter

Business Reporter for The Montana Standard.

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