3c hapter - Index of

214 Locavesting
their money in something they can see has a real effect.” Lorenzo,
a soft spoken young man in a newsboy cap, believed that the local
exchange was a new solution to many of society’s problems. It was
Jeannie, a returning intern, though, who expressed the excitement
that was in all of their voices. “The greatest thing about this
is that no one else is doing it,” she chirped.
Indeed, the only real attempt at a local exchange to date has not
been terribly promising. Called Investbx, it was created in 2008 to
connect investors and small and midsized companies in England’s
West Midlands region. (England, too, once had thriving regional
exchanges—as many as 22 a century ago). Companies can raise up
to £2 million (or $3.2 million) on Investbx, which is regulated by
England’s FSA. The exchange has streamlined the process of issuing
shares, and it commissions research on companies its lists.
It started out promisingly enough. Teamworks Karting, which
runs a popular indoor go- cart center in the area, raised more than
£735,000 from West Midlands investors to open another center.
And Key Technologies, a high- tech fi rm with 232 employees and
annual sales of £26 million, fl oated shares worth nearly £3 million
on the exchange.
As of late 2010, however, Investbx listed just three companies—
in addition to the Teamworks and Key Technologies, there is an
investment fi rm. And trading has been light: The exchange holds
a periodic auction to trade shares. Investbx will soon be put to the
test. Launched with a £3 million government grant, the exchange
will soon have to become self- supporting.
As Investbx illustrates, there are real challenges in creating
a viable local exchange. The fi rst is size. A community needs
a certain mass to support a dedicated exchange. Proffi tt fi gures
that between the eight counties that LanX would serve, there
are 2 million people and a GDP of $60 billion—about the size of
Slovakia, which, incidentally, has its own exchange.
A local exchange would also have to attract a large enough
pool of compelling companies to interest investors. Proffi tt
has drummed up enthusiasm for his idea among some area
businesses. In addition to Wolfgang Candy and Kimberton Whole
Foods, several other companies have expressed interest, including