By Ellie Winninghoff
Mission Markets, the on-line transaction platform for environmental markets like carbon, wetlands and support for ecosystem services, as well as other types of impact investing, is re-launching this fall as the result of the amendments to Rule 506 of Regulation D, whereby non-broker/dealers for the first time are now permitted to operate private placement platforms.
"We're entering a brave new world," says Mission Markets CEO Michael Van Patten, whose firm had raised capital for companies such as Hotfrog LLC (an early-stage new media firm) and Lumni Inc. (which facilitates investments in higher education for low-income students) before going dormant several months ago. Earlier in his career, Van Patten worked for Lehman Brothers and Bear Stearns, and he later co-founded NYPPEX, a leading auction system for illiquid securities.
For the most part, New York City-based Mission Markets (MM) itself won't raise funds for private companies or make direct private placements.
"The new law [permits] us to allow other people to use our technology," Van Patten says. "We're just providing the infrastructure for them to create a turnkey private capital marketplace that's very low cost and that gets them up and running very quickly but which is identified by their own logos, their own colors and their own identity."
The cutting-edge exchange also incorporates technology and social media in such a way that organizations can have investor groups on it, share due diligence, have their own Facebook-type pages where investors can crowd a profile, connect with other investors, share ideas, and join other investment clubs.
"That's how impact investing is done," Van Patten says. "It's extremely collaborative. It's not like regular investing. People want to be engaged, and they want to have a relationship with the organization. So we're creating this whole community within a transaction platform so people can invest in groups."
MM's technology also provides a platform for crowd-funding, which involves using the internet to raise funds for a project or company in amounts ranging from as little as $5 or $10 up to tens of thousands of dollars. Although the JOBS (Jumpstart our Business Startups) Act that passed last April has legalized crowd-funding of equity investments from unaccredited as well as accredited investors in limited amounts, Van Patten does not expect MM's platform to go live until late spring or summer 2013.
Hub Of Hubs
The first branded portal on MM's platform will be ChangeXchange, a venue for raising funds for entrepreneurs in the Pacific Northwest from local investors. It will be operated by Springboard Innovation, a Portland, Ore.-based nonprofit. But Van Patten says it's only one of several grassroots sustainability groups across the country that are gearing up to raise capital locally so that it can stay in the community.