August 03, 2013
Posted by Erik Gerding

This article in the Times on Wednesday provides more evidence that Oakland leads the nation in locavore cutlure and innovative financing for social entrepreneurs.  The article spotlights the "direct public offering" of  People's Community Market, a company that is bringing fresh produce to an un-served community in West Oakland. A key takeaway from the article: social entrepreneurs in California have been doing crowdfunding long before the JOBS Act.  Another takeaway not in the article: many of these social enterprises in the Bay are connected by networks.  For example, the CFO of People's Grocery, David Guendelman is also CFO or strategic advisor to a number of cutting edge social impact ventures, including Straus Family Creamery, Saveup, Lotus Foods and others.

What is a direct-public offering?  It is a loose term covering securities offerings to a large group of investors sans underwriters and their commissions.  For securities law mavens, the key is that firms rely on a transaction exemption under Regulation D/Rule 504, Regulation A, or the intrastate exemption (Section 3(a)(11)/Rule 147).  The intrastate exemption might be a lot more workable in California than in smaller states given the need to impose resale restrictions on securities being sold and the demands of investors for some liquidity to their investment.

Correction: The direct public offering was conducted by People's Community Market, a forprofit C Corporation.  People's Grocery is a non-profit sister corporation.

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