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Startup Allows Neighbors to Generate Returns Through Investments in Their Community

Image credit: Cooperative Capital via YouTube

“A lot of people want to participate in Detroit’s recovery, but unfortunately, they feel that because they’re not a billionaire, millionaire, celebrity or politician, they feel they can’t,” Kwaku Osei told Fast Company.

Osei and his team founded Cooperative Capital to help change that. The startup allows residents to invest a small amount – as little as $1000 – into a pool of funds to be invested in local real estate and businesses. Investment opportunities will be reviewed and rated, and participant investors will vote on the top five to determine where their money will go. The winning choice will be subject to a due diligence process in which Cooperative Capital will determine if the investment can produce at least a 6% annual rate of return.

“The real desire was to create a situation where residents were able to come together to collectively invest and build up our community in a way that everyone benefits,” said Osei.

While people will individually benefit from financial returns, the community will also reap the rewards of local businesses creating jobs and recirculating money within the city, and higher property values for neighbors of the rehabbed homes.

The inaugural fund will focus on the startup’s hometown of Detroit. Anyone in Michigan can invest a minimum of $1,000, which gives them a vote on the investments through Detroit Community Capital. Each additional $1,000 will give them another vote, up to a maximum of 10 votes. The fund will initially focus on real estate. The city has demolished thousands of blighted properties, but others remain that can be repaired for under $100,000 – an amount that remains beyond the means of many people living in the community as individuals. By pooling Michiganders’ resources, the fund will be able to purchase, remodel, and rent or resell abandoned houses. For some, it will be the first investment they’ve made. The startup plans to leverage this opportunity to improve citizens’ financial literacy through both the fund and an online class called “Get Financially Lit” that will teach the basics of investment and finance.

The Detroit Community Capital fund is expected to launch this spring or summer, pending the challenging process of working with state regulators. Once the ball is rolling, it will be easier for Cooperative Capital to establish similar funds in other cities within the state and beyond.

Midland, Michigan is another community that plans to work with the startup to invest in a mix of real estate and businesses such as new coffee shops or restaurants that might struggle to get capital from a bank. If they can get an investment from such a fund, members of the community would be able to share the revenue as the business grows.

“That’s where we could really use the power of that large base of people investing and then having an incentive to actually frequent those places to reap a benefit and return on investment,” Osei said.

Cooperative Capital is reportedly also in talks with community groups in Oakland, Chicago, Baltimore, and several other cities nationally. Like a venture fund, the startup will charge a small management fee, along with another fee if a fund reaches a certain performance threshold. The investments may be different in each city, and each group of investors will have the power to use the aggregated capital towards the projects they think are best.

“We’re finding in most of these communities that [are interested,] there’s a feeling amongst the residents that there’s a lack of equity and lack of inclusion, but the problems in these communities are somewhat unique to the communities,” Osei told Fast Company. “We think the much bigger picture is the dots that will be connected by having this large group of people coming together and having this alignment around collectively investing in their community.”


Launched in 2006, Sustainable Brands has become a global learning, collaboration, and commerce community of forward-thinking business and brand strategy, marketing, innovation and sustainability professionals who are leading the way to a better future. We recognize that brands today have… [Read more about Sustainable Brands]


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