Using Virtual Communities To Raise Venture Capitalism Investment in Delta County Michigan

Delta County Michigan has a lot of underutilized potential and when we engage in pro-business strategies we can draw in more investment and in turn provide more jobs to our children so they don't have to move somewhere else. While I don't believe in hard and fast rules I can say that I like to look at some of the research literature in the formation of a more formal opinion to incorporate into a theory I'm working on to increase innovative growth. Investment in existing and start-up businesses is hugely important and having an online community for Delta County Investments may be one idea that works. 

Investors, entrepreneurs, and venture capitalists rely on information. Building and designing websites that seek highlight local businesses looking for investment capital because of their growth potential is a viable strategy. The other method may be to create investment online forums where this information is not only present but investors, entrepreneurs, venture capitalists and local stakeholders may be able to interact to make investment and policy awareness. 

This is done through what is called a virtual community. It may be a discussion forum where people can post questions, ask ideas, set up plans, get information on zoning, and much more. Such an forum will help investors and venture capitalists find information on important businesses and interact with participating entrepreneurs that need access to investment and low interest loans. It also serves the secondary function of keeping local policy makers aware of what investors need and in turn investors what policy makers need. 

We can look at a study conducted on a sample of 215 members of the investment community and how online forums can help (Shang, Chen & Chen, 2013). They state, "Compared with other decisions, financial investments should be more rational, and investors need to acquire immediate and accurate information for their investments." We could provide them with that information in a way that leads to increased in active local investment.

Thus an online forum and virtual community is about information, dialogue, and development. It provides the right information at the right time for decision making purposes. They also found that members in this community had higher confidence in trading and in turn trade more frequently. More frequency means that more dollars are being spent to develop local business (i.e. could Upper Hand Brewery go national? kind of ideas).

Why do members in online investment communities trade and invest more frequently?

1. One primary reason is the availability of information and the ability to ask questions of business owners, government stakeholders and other investors. In economics investment is part of choice and based on the rational decision making when and if information is available. Thus, providing access to a Delta County investment forum community helps them gain information they need to make decisions. 

2. Putting together the business owners, city leaders (Escanaba and Gladstone) and Delta County officials in the same forum as investors increases source credibility. Investors need to perceive the information as believable, competent and trustworthy (Petty and Cacioppo, 1986). No other place to do this then to get the sources involved when investment capital is significant.

3. Third we will want to consider that highly successful investors can often create herd investing (Shang, Chen & Chen, 2013). When an venture capitalist is successful he/she will draw in other investors and they will follow that person's lead. The entire group begins to invest more and in multiple mechanisms.

So as I think through this it appears that an investment community for Delta County could be used to attract, market to and reach out to potential investors. It would also draw in local businesses that have potential growth and in turn better align government policy to the needs of the business community. I bet one could to the same for civil issues and quality of life concerns but that is a different type of venue. 

Thus far here are a few ideas that have been generated (Thinking out loud). This is theoretical play but some ideas may be good for implementation either here or other locations.

1. Redesign sites to include information that attracts investors
2. Develop a cluster system to enhance local industries (Focus on investors in those clusters).
3. Create welcome packets for entrepreneurs and reach out to other locations for to help people buy local properties.
4. Find someone to coordinate all of these activities and help businesses get through to start up
5. Hedge our natural resources to attract tourism, investment, and tourist micro manufacturing.
6. Utilize our deep port, rail, roads and central location to attract distribution. 
7. A lot more Theory of Transactional Clusters

Petty, R.E. and Cacioppo, J.T. ( 1986 ),Communication and Persuasion: Central and Peripheral Routes to Attitude Change , Springer-Verlag, New York, NY .

Shang, R., Chen, Y. & Chen, C. (2013) The social and objective value of information in virtual investment communities. Bradford, (37) 4. DOI:10.1108/OIR-06-2011-0087

Small Business Help for Delta County Michigan Businesses Struggling with Extended COVID-19 Shut Down

Small businesses in the U.P. (Delta County) are being decimated with COVID-19. Because of the of the public health concerns non-essential businesses must close their doors leaving many small business owners concerned. Rumors are mounting that a 70 day extension to current emergency orders may be reissued by Governor Gretchen Whitmer soon. State Senate Majority Leader Mike Shirkey (R) isn't so sure that such a long extension is needed and legislature is working on a solution (1). If you own a small business and need help you may want to continue reading.....

What we do know is that the economy is tanking and many businesses are going to bottom out and close. For example, in the hotel industry, according to Detroit Metro and Convention and Visitors Bureau, up to 1/4  of businesses in that industry may never reopen (2).  This is where disaster bridging loans become more important. I wouldn't wait forever if you have a business in Delta County and need help.

Its a tough situation and absolutely no one knows what the "right" answer is. We do know that the economy is hit hard and the government (state and federal) are doing the absolute best they can with the resources available. People want more but as a society we may need to rethink future strategies. It will be very hard to rely on government to solve all of the answers but when there are resources available I encourage businesses in Escanaba and Gladstone area to take benefit of them. 

There is about $500,000 total in loans available for Delta County. Keweenaw, Houghton, Ontonagon, Gogebic, Baraga, Iron, Marquette, Dickinson, Menominee, Alger, Schoolcraft, Luce, Mackinac, Chippewa.  

Here are two resources for people with small businesses that might need some additional help:

Michigan Small Business Fund (3):

"Michigan’s small businesses impacted by the COVID-19 virus can now apply for grants and loans through the Michigan Small Business Relief Program, the Michigan Economic Development Corporation announced today. The program will provide up to $20 million in grants and loans to provide economic assistance to Michigan’s small businesses that have been negatively impacted by the COVID-19 virus, and in turn help support workers and their families facing economic uncertainty during the outbreak. Information on how to apply, as well as eligibility criteria, is available at www.michiganbusiness.org/covid19."(3) Contact. Kathleen Achtenberg achtenbergk@michigan.org

Federal Small Business Disaster Loans to Michigan (4).

President Trump responded to Michigan Governor Whitmer's request for disaster relief by offering small business disaster loans to companies and non-profits in Michigan. Interest rates are a low 3.75% +/- and up to $2 million per entity. The loans are designed to help pay fixed expenses, pay roll, etc.. It is a type of bridging until we get out of the crisis (4). Those that are interested may want to read more about it https://www.sba.gov/about-sba/sba-newsroom/press-releases-media-advisories/sba-offers-disaster-assistance-michigan-small-businesses-economically-impacted-coronavirus-covid-19

Applicants may apply online, receive additional disaster assistance information and download applications at https://disasterloan.sba.gov/ela. Applicants may also call SBA’s Customer Service Center at (800) 659-2955 or email disastercustomerservice@sba.gov Additional contact Contact Michael Lampton (404) 331-0333 Michael.Lampton@sba.gov

We know that running a small business and taking care of your family is very difficult. When tough times hit there might not be enough supportive capital to get you through. While government can't be the "save all" to everyone it does seem that Michigan and the Federal Government are doing their best with the capital that is available to them. Its important to remember that there is also a cost to any support provided based on limited resource availability. 

As a small business owner I'm not 100% sure that a 70 day hard extension of the order is yet necessary. We are all aware of the fluid nature of this crisis and the need to act, re-evaluate our strategies and try again. I would suggest we move to something smaller like a 30 day extension with the right to extend again another 30 days when needed. That will give an opportunity to adjust and respond to changes in the environment. Got Questions? Try and get hold of someone who works for you and your business!

State Representative Beau Lafave 
State Senator Ed McBroom 
U.S. House of Representatives Congressman Jack Bergman

Stay safe out there and practice social distancing!

Author. Dr. Murad Abel, Business Professor, Research Fellow, Small Business Owner. Linked-In