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Micro shareholders: The alternative for young entrepreneurs

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  1. Abstract
  2. Introduction
  3. Background
  4. Purpose
  5. Overview of the financial picture
  6. Comparables: A precedent
  7. Business and Employment Cooperatives (BECs)
  8. The micro shareholders alternative
    1. A stress-free environment
    2. Timely and straightforward approval process
    3. Transparency and no gauging
  9. A case study: The Batikent Project - Turkey
  10. Conclusion
  11. References

More than ever, in today's highly competitive marketplace, combined with stringent bank lending requirements, it is next to impossible for a young, aspiring entrepreneur, to obtain funding for his or her business venture, especially as related to building projects. The report will detail how Micro Shareholders is an alternative for many young professionals because it provides alternative financing and therefore paves the way for these young professionals to become entrepreneurs. The term Micro Shareholders is a term used by the author, developed on a working model of financing used by family members and colleagues in Ankara, Turkey. The model therefore has a precedent, and in its more basic form, is modeled along the lines of a Cooperative, which is a recognized form of financial structure here in Canada.

Even at the best of economic times, young entrepreneurs are caught in a Catch-22: They require financing for projects, but are denied because they lack a portfolio of successful projects and a track record i.e. they need the experience in order to get the money. Conversely, the young people need the money to get the experience! Micro Shareholders provides an alternative working model which benefits both the individual shareholders who invest in a closely-held community pool of finds and the young entrepreneurs who have set out to execute reputable business ventures.

[...] Often, it is only shareholders with considerable blocks of stock that can force change and demand accountability. This is often facilitated if, and only if, various shareholding groups band together and have enough voting power. Additionally, in a Credit Union, the elected Board of Directors governs policies concerning interest rates and other matters The Micro Shareholders Alternative Micro Shareholders will purposely position itself as a community-based investment vehicle which constitutes mostly average middle class investors such as teachers and government employees. [...]

[...] Additionally, this model is highly unique and mutually beneficial as it provides an investment vehicle for community families on middle or lower incomes who would normally be unable to invest in many standard industry investment instruments Purpose The purpose of this Report is to ascertain the way in which Micro Shareholders will provide a viable alternative source of funding for young entrepreneurs who are shut out of conventional bank and non-bank lending programs. Additionally, the Report will demonstrate how micro shareholding can a working model for this target group, and can be applied in a number of marketplaces and across a range of industries Report Statement Clearly, more than ever, there is an urgent need for the Micro Shareholder model in order to facilitate financing for young entrepreneurs, and especially for those engaged in costly land development and real estate projects. [...]

[...] Having a rich uncle aside, the stark reality is that young entrepreneurs often must abandon their dreams. One alternative which should be mentioned is that of government funding, particularly federal and provincial programs aimed at young businesspeople. Granted, this option exists, however, like the USA's Small Business Administration (SBA) loans, the applicant usually must come up with a substantial equity portion himself in order to qualify for the loan, PLUS the loan usually has to have a credit-worthy Guarantor with considerable assets. [...]

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