Investment Crowdfunding Allows Impact Investing So Easy a Child Can Understand
William McGuire Leads the Community Business Accelerator Incolo Helping Entrepreneurs Find Investors in Their Backyard
Devin: What do you see as your superpower?
Will: Great question. Superpower? I think it’s the ability to have empathy with others.
William McGuire is the founder and CEO of Incolo, a venture accelerator designed to help entrepreneurs find capital right in their backyard, often via investment crowdfunding. He envisions a world where everyone in the community is invested in its businesses, thereby participating in the upside collectively.
So Easy a Child Can Understand
An intriguing part of our conversation revolved around helping ordinary people understand and value the opportunity to invest in local businesses. To prove that even kids can understand the basics of investing via crowdfunding, Incolo hosted some sessions with “little investors,” some not having even celebrated two-digit birthdays.
Will says, “We just want to see how our kids interact.”
After identifying several companies that would naturally appeal to children, including an app, a film and other opportunities, they held the session with a handful of children. This list also included some boring fare, like an assisted living project.
“We asked all the kids, ‘What’s interesting to you?’”
The response of a ten-year-old was notable.
“That company was cool, and the film company was cool, but Livewell Assisted Living was my favorite offering.” She added, “They were my favorite because the way the business owners talk about the business, I felt like they were going to take care of grandma. And grandma is aging.”
Investing in private companies via crowdfunding is risky. I’m not writing this as investment advice. Will was careful to say he’s not offering investment advice. Investing with the crowd, however, provides an opportunity to share the burden of due diligence and to take investment risk in small bites.
“Most of the companies in this [startup/small business] world, especially private market, are going to fail,” Will says, noting that he and his wife have invested in 80 businesses, “the same thing that an angel or VC would do.”
Because most will fail to provide a good financial return, if you invest in only a few, statistically speaking, you are most likely to lose money. Because one in a bunch will increase in value dramatically, a rare winner can offset losses in your portfolio—meaning that you need a diverse portfolio.
For Will, the primary goal isn’t the financial return on investment but the community benefit. “To us, it’s more of the intention of how things are built than any type of financial IRR that can be attached to it. It’s more like ROX, where X is defined as impact.”
He says, “I’m always asking people, ‘What’s your X? Is it the amount of lives saved? Is it money returned and reinvested? Is it the number of people you touch? Is the amount that can go back?”
“It all has to be defined around the X for the individual with some intentionality around it,” Will says.
Will will conduct a special session at SuperCrowd22 for founders. If you're a founder who wants to learn how to build a successful investment crowdfunding campaign, Incolo's team will be helping founders prepare campaigns as an optional part of SuperCrowd22. Registered conference participants are eligible for this free support.
The Incolo Accelerator
“What Incolo is doing is we’re fixing capitalism for communities,” Will says, describing the venture accelerator he founded.
“Incolo works with business owners and founders that are building [local] businesses and shows them and gives them the optionality to raise from their local community, from everyday people, their customers and their fans right alongside their more traditional forms of capital,” Will says of the four-month program.
The program includes a deep dive on corporate governance. “We call it founder protection.”
Will works with entrepreneurs to find the optimal sources of funding. Depending on the business, he may pair crowdfunding with traditional sources. Some founders complete the program determined not to raise capital but merely to grow revenue and profits to self-fund.
For the founder, Will points out that a $1,000 check-writer may be worth much more than their individual check. Those small check investors may have connections worth millions to the business.
“Overall, what the accelerator is aiming to do is to give founders the optionality to go after it and then grab the bull by the horns and pour some gas on the fire and run with it if they’re ready to go,” Will says.
Will says, “One of the first things I ask founders is, ‘Do your customers love what you do?’” If the answer is yes, he says, “There’s potentially a likelihood that some of them would probably already invest.”
Before launching a crowdfunding campaign, he checks a second box. “Do they have their sales and marketing processes right lined up?” That critical business function is vital for fundraising in a crowdfunding campaign. If that team is ready to sell a product, it can be leveraged to market the offering—carefully, in strict accordance with the regulations.
In all his work, Will leverages empathy as a superpower.
How to Develop Empathy As a Superpower
Will dates his lesson in empathy to adolescence. “When I was 14, I found out that I needed this thing called a cardiac pacemaker because my heart was damaged, or the sinus node that controls the beating of the heart was damaged.”
“Everything kind of points back to that being a pivotal moment in my life,” he says. “I realized there are some greater purposes in life that I was supposed to be filling.”
For Will, empathy is both a deeply held value and a practical tool. He wields it in the accelerator to help founders get on the right path for them.
With friends, he’ll ask, “What really drives you?”
In the context of the accelerator, Will also goes deep. “One of my first questions to founders is, “‘Where do you see yourself in 15 years?’”
“The way the person sees the world in 15 years, I often find, is a reflection of where they are on that journey.,” he says. “That [vision] becomes the foundational aspect of everything that they do from this point moving forward.”
“That, I think, is the key to tapping into people’s calling and then being authentic with it,” Will says. “But it’s not something that can be shoved on somebody. It’s something they have to self-discover along the way.”
If you follow Will’s example and advice, you can make empathy a superpower that enables you to do more good.