COIN: Investing Small and Thinking Big

COIN: Community Opportunity Investment Network

A few years ago, the Door County Community Foundation (DCCF) convened a small group of people to talk about the future of employment and the wellbeing of employees in Door County.

DCCF CEO Bret Bicoy recalls, “It was summer. We were sitting outside around a picnic table. With a couple of exceptions, it was a group of people who had retired to Door County and lived here seasonally. I can still recall the remarks of one gentleman. He looked at the group and said, ‘It seems to me that our presence here creates some unintended consequences.’ He went on to explain that having a significant portion of the economy drop in, rely upon the goods and services that make Door County so wonderful, and then drop out again for a good part of the year was not very sustainable for the local community. His observation spurred talk of a solution.”

Photo by Len Villano.

Out of that discussion and many others, COIN, the Community Opportunity Investment Network, was born. Founded in 2013 under the DCCF umbrella, COIN is a microlending and business mentoring initiative designed to stimulate economic activity and opportunity at a very local level.

COIN investors are philanthropists who pool their money with no expectation of financial return to provide loans to individuals who pass COIN’s “character test” but cannot meet the strict underwriting standards required by banks in the post-recession lending milieu.

Bicoy states, “We want to present an option for people whose only other option might be a credit card advance at 26 percent interest. There are people who fit the profile for success in Door County but can’t get traditional financing.”

Bicoy is quick to point out that COIN loans are not low-interest.

“In fact,” he states, “just the opposite. They’re a point or two above traditional loans. Our intent is to help new entrepreneurs grow to where they become ‘bankable.’ There’s a financial incentive built in for entrepreneurs to exit the COIN program once it’s accomplished its goals.”

To be eligible for a COIN loan, applicants must conduct a business in Door County that has the potential to be year round. Ideally it will create additional jobs, although as Bicoy notes, “one well-paying job is one well-paying job. That person may have left a position that’s now available to someone else.”

David Eliot, one of the founding members and chair of the DCCF Board of Directors, explains that it’s all about the original goal of investing in the local economy.

“We’re grateful for all the social services available in our county, but creating a stable, year-round job with decent pay and benefits changes lives and has more long-term impact than any social services program could. That’s the kind of investment we’re about.”

An important component of COIN is its mentoring program. In partnership with the Door County Economic Development Corporation (DCEDC), COIN matches each loan recipient with a mentor, someone who has run a successful business and can provide expertise and act as a sounding board. Eliot explains, “This mitigates our risk and also provides a real service not typically available with traditional loans.”

COIN loans range from $5,000 to $100,000, with the average loan being $25,000. COIN issued its first loan in 2014 and has made a total of four loans to date. In 2016, COIN will be working with Baylake Bank to expand the pool of available funds to $250,000.

Mary Horton, a certified public accountant, mother of four and devoted fan of Door County, is also a lifelong lover of coffee shops.

“I met my husband in one. My daughter was born above one. I owned one in New Mexico and worked at one in Hawaii.” When she and her family returned to Door County, they eventually moved to Baileys Harbor and settled into a home next to a vacant building. “I knew right away that the town needed a year-round coffee shop.”

She and a friend approached banks for a loan to turn the empty building into a coffee shop but were denied. “We needed a relatively small amount of money and it just wasn’t worth it to the banks to deal with us. Also,” she laughs, “our collateral was an espresso machine!”

Friends put Horton and her business partner in touch with Sam Perlman at DCEDC. He helped them write a business plan that they presented to the COIN board. “We were nervous, but it was a good fit. The board may have laughed a bit at our logo and may not have fully appreciated the creative nature of our vision, but they took a calculated chance on us.”

Horton and her partner received the first COIN loan and on October 26, 2014, they opened Bearded Heart Coffee.

Opening a business in Door County at the end of October may not have occurred to most entrepreneurs, but Horton thinks, in retrospect, that it was a good idea.

“It allowed us to build up a local following. We relied heavily on word of mouth and social media and really got to know our clientele.”

Although Bearded Heart’s costs were higher than expected (due partly to its commitment to working with smaller roasters and the use of natural milk), so too were its sales. Horton states, “We had to revamp our projections after the first year, but I’m pretty proud of what we’ve accomplished. We provide nearly full-time positions to two employees and part-time work to two others. We’re open year round, which isn’t easy, and we’ve met and exceeded all of our goals.”

At the end of 2015, Bearded Heart Coffee became COIN’s first “bankable” business, repaying its loan ahead of schedule and refinancing through Baylake Bank. Horton, who recently joined the board of the Baileys Harbor Community Association, is happy to be a part of the “good synergy” happening in the small town. “I’m grateful to COIN for believing in us and to the people of Baileys Harbor and Door County for supporting us. I hope that the loan we repaid will help fund someone else’s dream and launch another Door County venture.”