print pageInvestor FAQS
(Click on a question, or scroll down to see the answers.)
 | Why should I trust you? |
| Why all the secrecy about investment? |
| What are the risks to founding investors? |
| What are the benefits to founding investors? |
ANSWERS
Why should I trust you?
That's really up to you to discern. But take a look at who is behind the common good bank plan. Most of our partner organizations are well-established nonprofits and their website links are on our Who Are We page. Likewise many of our advisory board members are well-known and respected. They would be happy to confirm their involvement. Many of them could also serve as character references for the Project Director.
We are not currently accepting deposits or investments. If you are worried about a multi-level marketing scam, rest assured that donations are made to Society to Benefit Everyone, a 501c3 nonprofit (founded in 2006) regulated by both federal and state government.
top Why all the secrecy about investment?
Under SEC regulations, we cannot mention publicly (in press releases, group emails, public meetings, or even groups of four or more) whether we have a private stock offering. Otherwise we could face criminal prosecution. This leaves it up to you to ask.
Like any bank startup, we will have to raise about $1.5 million through a private offering, available only to accredited investors. An accredited investor is anyone with a net worth of $1 million or more OR an organization with assets of $5 million or more.
We also cannot discuss the terms of any private offering with you unless you are an accredited investor. We CAN discuss terms with official representatives of qualifying organizations, including board members and senior staff, even if those board members and staff do not qualify individually as accredited investors.
top What are the risks to founding investors?
We have taken several steps in the common good bank plan, to minimize the risk to founding investors (investors who buy stock before the bank has a charter). However, as in most startups, 100% of those investments will be at risk. See the investment documents for details. The risks are different in each of four stages in the common good bank investment plan:
- Pre-charter, there is zero risk. We will not ask for actual money until we have commitments for the whole $1.5 million.
- Post-charter: After the state regulators and the FDIC have formally approved the common good bank business plan (affirming that in their judgment the plan will succeed), we will move forward with the business plan, raising an additional $5 to $8 million from the 4,000 future depositors, then spending most of the $1.5 million preparing to open, according to the approved plan. In the unlikely event that the bank does not acually open, the founding investors would lose whatever part of their money had been spent.
- In the first years after opening, in the unlikely event that the bank makes several bad decisions right away and fails, then ALL of the investors (founding investors and stockholder/depositors) could lose their entire investment.
- Once there are many Community Divisions, loss will become even less likely. Still, ALL investors could lose all of their money, if the overall common good bank system fails.
- The risk of NOT investing is that the world would be much worse off without common good banks.
top What are the benefits to founding investors?
We can make no promises about results. But see our business plan for projected results. Also see the Sound Investment page and the video for two types of projected social returns. Social benefits are by far the largest incentive to investors.
We cannot discuss and details about investment in a common good bank or in any pre-charter private offering (see "Why all the secrecy...", above). We can say that in the common good bank design there is a planned return for investments. The planned resale price of common good bank stock is designed to give each investor an inflation rate return upon reselling, estimated as prime minus 1.5% through the bank's first year of operation (about the same rate as a high interest CD). The true rate of dollar inflation has averaged about 6% over the past three decades -- about the same as prime minus 1.5% and also about the same as the overall average return on stock market investments.
Founding investors will have the joy and fun of shepherding the common good bank plan through to fruition.
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