Wellspring Investment Fund Direct Public Offering
Invest in Wellspring Cooperative Businesses
Personal investments are a powerful way to support cooperative businesses and strengthen jobs and economic prosperity in your community. The Wellspring Investment Fund was formed in 2016 to raise funds to finance Wellspring cooperatives and to enable community members to make direct investments in these companies. Community investors are more patient and flexible than other sources of capital, which is essential to enable new companies to start and flourish. These investments provide equity in new businesses that can then be leveraged to raise additional loans from community development finance institutions.
Wellspring’s experience is that a dollar invested can
often raise an additional 1-2 dollars in loan funding.
The Wellspring Investment Fund’s first investment campaign has been to finance the Wellspring Harvest greenhouse through a Direct Public Offering (DPO) This DPO enables anyone to invest $1,000 or more in Wellspring Harvest for a 5 year term at 3% interest. An initial capital campaign raised $300,000 from 53 investors to help finance the construction and startup of the Wellspring Harvest greenhouse. Additional investments have supported greenhouse growth and capital improvements needed to increase the efficiency of production such as LED lighting to sustain growth during the winter months, controller to automate environmental systems, and cooling and circulation fans. For more information about this investment opportunity, see the Summary of Wellspring Harvest Investment Opportunities, and the Wellspring Harvest DPO Prospectus.
INVESTMENT OFFERINGS
Wellspring Harvest Greenhouse is a 15,100 square foot hydroponic greenhouse located in Indian Orchard, which is a low income neighborhood of Springfield, MA. The greenhouse is the first source of year round local produce in Springfield and the largest urban greenhouse in Massachusetts, supplying lettuce to commercial and institutional markets in the city and region. This is one of a network of worker owned cooperatives that Wellspring is developing to create jobs and wealth for unemployed and low income Springfield residents. The greenhouse has created 8 jobs to date, with plans to expand and double this employment over the next two years.
Capital Investment Needs: Wellspring financed construction of its greenhouse with $1.5 million in equity, loans, grants and cost sharing. Wellspring Harvest is working now to raise an additional $20,000 for capital improvements, with the long-term goal of raising an additional $750,000 to build a second greenhouse that will double the scale of production and greatly increase overall profitability. Infrastructure for this second greenhouse was installed with the original construction.
Sales Growth: The greenhouse began production in August 2018 and is on track to break even by July 2023. Wellspring Harvest’s major customers currently include the Big Y Supermarket Chain, Whole Foods, and other local farm and cooperative grocery stores, which make up 80% of sales. The other 20% of sales go to institutional buyers including hospitals, colleges, restaurants and schools. At full production the greenhouse will produce 21,500 heads of lettuce a month.
Investment Opportunities: Equity financing for greenhouse construction included $265,000 in preferred shares for qualified investors and $300,000 raised through a direct public offering for qualified or non-qualified investors. Wellspring has reopened these investment opportunities to raise capital for needed equipment and to build the second greenhouse. Terms of these investments are as follows:
Preferred Shares: Shares valued at $100 with a minimum of 50 shares ($5,000) are offered for 10 year terms at 3% interest. The interest is compounded over the first 5 years, and then principal and interest are repaid in equal amounts during years 6-10. This is equivalent to a 7% interest rate on investment.
Direct Public Offering: Shares with a $1,000 minimum and 3% interest for 5 year terms are being offered to qualified and non-qualified investors. Interest is deferred during the first 2 years and paid back with the principal after 5 years. See the attached link for the prospectus for the direct public offering.
For More Information or to discuss an investment please contact:
Fred Rose at 413-522-2204 or wellspringcoops@gmail.com
Emily Kawano at 413- 461-8203
Thank you for considering this investment to grow the Wellspring Harvest greenhouse