Investment Tools: 2 You Can Use Today!

Cartons of eggs from chickens raised sustainbly nurtured by financial tools

Many years ago, over coffee with a friend, I found myself explaining the investment tools we use in the Slow Money network. She sat straight up and said,

“Oh, I get it,” she laughed.

“It’s like water!

…As my dad used to say, ‘they don’t call it cash flow for nothing!’”

In the last post, I explored the grounding work of the Slow Money investment tool, the royalty note. In this post, I’ll explore how time and distribution impacts other financial instruments. The lessons make these financial tools more responsive to the needs of our sustainable food entrepreneurs.

As always, we can apply the lessons we learn in the capricious world of nature to all kinds of businesses.

In fact, as you’ll see here, many are.

Need for Working Capital and the Financial Tools to Help

Wise business owners needing a sizeable amount of capital take out royalty notes. They may need the money for business growth or to finance a project.

However, for every business looking for long-term financing, several more are looking for working capital.

Traditionally the province of personal credit cards and home equity lines of credit, there is a way to work with time and other business assets to offer working capital.

We can collateralize a business owners’ inventory or the trust they’ve earned for their small business’s performance.

Let’s look at two ways we work with the flow of cash in the Slow Money investment world:

  1. subscriptions
  2. prepaids.

Subscriptions-Our First Investment Tool

While many of us are familiar with a Community Supported Agriculture (CSA) model and may subscribe because we:

  1. like the convenience
  2. love being introduced to the variety
  3. like feeling we’re part of a community where we care about our local growers

Realizing we’re helping a local farmer, we sometimes miss the specific benefit it brings to the farmer’s business. The key to a subscription model from the farmers’ side:

  1. subscriptions create smooth cash flow
  2. subscriptions show what customer tastes and improve business planning
  3. when collected upfront, annual subscriptions pay for raw resources before they’re needed
  4. subscriptions may enhance margins by bringing money into the business before sales and shifting cash flow to allow for volume purchases to make the cost of creating the product cheaper

Nearly every business recognizes the subscription model to bring their business to financial sustainability.

The farm, bakery or seafood catch business is no exception.

Prepaids-Our Second Investment Tool

Another way to support community-based business is by prepaying our purchases. The model only works for established business making product sales, but it‘s an excellent way for business owners to obtain low or no-interest loans from customers.

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All kinds of businesses use this tool too.

A well-known example, the Starbucks Rewards program.

Whether you count a Starbucks Rewards card or app among the contents of your wallet, know the Starbucks Rewards program is a very lucrative pre-pay program.

Generally, the rewards customers get, amount to little more than a kiosk-ordering experience, or an occasional free drink.

But, the reward Starbucks reaps for developing the program is unimaginable.

Rewards at Starbucks

Ok, I’ll admit it, I’m a willing and captive audience to Starbucks through their Rewards program.

I let them spam me with their advertisements for their latest hot drink or menu item. They collect my order habits: what and when I order. They entice me to order more with campaigns, discounts, and tastes.

And mostly I thank them.

I’m part of a club that knows how to keep my life easy. I pick up orders others have paid for with their own apps. I never wait in lines, ordering from the parking lot and walk to a waiting table.

In the meantime, Starbucks has my money – which started out as $10 until I spent the pre-load too quickly. Now it’s an automatic $25 load from my credit card every time the card gets low.

I barely notice I’m spending money.

And that’s how Starbucks likes it. The millions of dollars they collect from the many, many customers that take part in the Starbucks Rewards programs allows Starbucks working capital that comes in faster than their need to spend.

Why couldn’t a sustainable small food business set up something similar?

Credibles – A Small Food Version of a Starbuck’s Card

Turns out they can. In fact, there’s an app designed to make a program centered on prepaids practically turn key.

And as potential investors, we can suggest it.

The app is Credibles.

Developed in 2011 by a former Union Bank executive, the app allows small food businesses to collect prepaid amounts from their customers.

Many small food businesses throughout the country have successfully implemented the Credibles program. The average load in San Francisco, where the app originated, is $400. Imagine, a small business owner with 100 customers, each putting $400 on a card. That’s $40k worth of working capital ‘paid back not from the cash register, but from the kitchen.’

There’s another story about chickens and eggs at the heart of this financial device. A Slow Money investor, about to invest in laying chickens for an egg venture, requested to receive his ROI in eggs instead of cash.

Twice a month, for the term of his loan, he collected the eggs in lieu of cash payment.

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Most small business owners using Credibles offer a perk to encourage the prepayment, but owners don’t have to make the perks complicated.


Many Credibles participating customers are interested in supporting a small business in their community and love working with a business owner who shares their values.

Likely, you count yourself among those loving the idea.

Perks can be as easy as:

  1. unique parties for best customers
  2. the first taste of a new product
  3. baker’s dozen kind of discount

Basically, the same types of incentives a person might find if they were a favorite customer. As you consider these ideas, remember, you understand your region and area best.

What kinds of perks might you and your friends enjoy at a local retail establishment?

And think the about community, not merely discounts or freebies.

Perk Examples

In one instance, the most significant value a deli owner provided to their clientele came from the Credible tracking feature.

A family friendly deli, located in a high-end neighborhood, allowed families to share the same prepaid account. As the kids came into the deli, they ordered their lunch through the Credibles app. The app tracked the kids’ orders and reported back to the parents. Parents felt better knowing their children were eating a full sandwich, not just the chips kids everywhere like to eat!

Some of the more creative ways to apply Credibles is to educate customers making them even more engaged with the business.

There is no reason a small business can’t take poorly performing products and bundle them with a bit of education or entertainment to serve them as a perk. As customers, we:

  1. accept the perk
  2. learn new things
  3. support our mission driven businesses

With your help, business owners may find they’re successful in ways they hadn’t imagined!

An Example: Chickens Again!

I remember once being offered chicken feet for broth making.

Yes, chickens again.

Chicken feet are an unfamiliar ingredient in the suburban heart of Food Network country. In my experience, Ina, Sandra Lee, Tommy and others make their broth with feetless chicken carcasses. I have yet to see chicken feet celebrated by one of my celebrity chefs.

Because they are so unfamiliar, I imagine chicken feet loose revenue for our local farmer.

On this day, farmer Dave took me aside and shyly told me the feet make the best chicken stock. I took them home and tried them in my next batch of stock.

He was right!

Today, I seek out chicken feet for my stocks and broths.

This small perk, a favorite customer, made me:

  1. a convert to a new product I’d never tried
  2. a strong advocate for a wasted part of the chicken, chicken feet
  3. a raving fan for the farmer who introduced me to their broth making magic
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It also made me a willing customer for future chicken feet. But the real perk to the perk is an improved revenue for the farmer and a more financially sustainable business model.

Can you imagine learning something new from your favorite entrepreneur?

How might it make you feel?

Cooler Heads:  Crediblies as Our Chosen Investment Tool

In another win for Credibles, our local Slow Money investment networking club came together to consider an investment in a local healthy-fast food place.

The business needed capital

The purveyor, Paul Chamberlin, did everything he could to make the business profitable. He walked the sustainable food walk and talked the sustainable food talk.

Only recently opened, he found his restaurant competing for customers with an exciting food court who’d celebrated its own grand opening a few months after Paul’s restaurant.

Food for the restaurant grew within 250 miles of the restaurant. Much of it came from within 50 miles (including the meat). Some of the restaurant‘s vegetables came from an urban farm only a few miles away and others came from a young farmer who was just 12 years old.

(The burgeoning entrepreneur grew chilies in his yard after Paul helped establish a countywide Orange County Department of Agriculture Certification to produce and sell food from backyard gardens).

Despite his tremendous efforts and a vision for a thriving local food economy, in the end, Paul’s business model didn’t work.

Sadly, our investment club decided not to invest in his business.

What we did decide: an offer on Credibles.

As community member investors, we agreed to pay $500 a piece – the amount not enough for his full request, but enough to fund a new cooler – something he deeply wanted. At $500 he’d pay us back with catering and other discounted opportunities. A win for everyone.


As we commit to a collaborative local economy and ethical investment, we can be mindful of the ideas about time and cash flow that influence our transaction designs.

A mechanistic approach is a remnant of an industrial age. With a holistic vantage point, we can re-imagine our transaction terms and the financial tools used to meet them.

Subscription models and prepaids are great ways to shoulder some of the burdens of a sporadic cash flow. These financial instruments give us a start to consider the ways our financial resources can nurture our mission driven businesses.

Knowledge of these tools is good in and of itself, but it also gets us to start considering the construction of our financial tools. None of the tools we’ve explored are new. They’ve just considered in a way to serve the environment. With mindfulness, we understand a new confidence. We realize we can deconstruct and reconstruct our financial instruments to serve our ethics.

Have you gained any ideas from the ways we use these flexible investment tools to help your favorite socially conscious business?

Were you familiar with subscription businesses and prepaids for other businesses?

What ways will you use these investment tools in your communities?

Looking forward to hearing your experience in the comments!

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