Glass artist Samantha Carlin received one of the smaller loans from the Methow Investment Network, but it was critical support for the upgrading of her studio in Carlton.
Local lenders connect with local businesses
More than $3 million has been invested over the past three years in local businesses — from individual artists to the Methow Valley’s renowned Nordic ski trail operation — to create and expand business opportunities in the Methow Valley.
The catalyst for this infusion of capital into the local economy is the Methow Investment Network, a home-grown program that acts as a matchmaker, connecting investors who want to put their money to work in their community with local business owners and entrepreneurs who need money for new business ventures.
Since its inception three years ago, the Methow Investment Network has helped 13 local businesses secure financial backing through loans from local investors. The recipients of those loans represent the diversity of the Methow Valley economy, including farming, manufacturing, beer brewing, coffee roasting, art, services, trades, and recreation.
“It’s gone far beyond our expectations,” said Don Linnertz, executive director of TwispWorks, which launched the Methow Investment Network in early 2017. One of the biggest barriers to starting or growing a small business is access to capital, and that’s why TwispWorks created the Investment Network, Linnertz said.
TwispWorks acts as facilitator, creating opportunities for business owners who need financial backing to connect with potential investors. “Our heavy lift is the matchmaking,” Linnertz said. Once the connections are made, it’s up to the investors and business owners to put together their own deals. The ultimate goal of these individual deals is building a stronger and more sustainable local economy.
“It’s such a wonderful thing. We’ve got so many smart, insightful people here in the Methow Valley,” said James DeSalvo, executive director of Methow Trails, which received support through the Methow Investment Network last year. “We’ve got investors who are investing money around the world, but they want to invest locally.”
Methow Trails is one of the biggest players in the Methow Valley economy. It operates and maintains a network of more than 120 miles of all-season, multi-use trails — the largest groomed Nordic ski system in the country — that draws thousands of visitors every year to recreate and spend their money here. Based on an economic impact analysis, Methow Trails estimates its direct and indirect economic impact to the valley exceeds $12.4 million annually.
Last year Methow Trails received $215,000 in loans through the Methow Investment Network to help the organization purchase 18 acres near Winthrop that will become its future headquarters. The property will allow Methow Trails to consolidate its operations on one site, with a new office, as well as maintenance and storage facilities for its fleet of grooming equipment. It could also provide an eventual link to a long-proposed trail connecting Winthrop to Twisp, DeSalvo said.
“I had heard of the Methow Investment Network but didn’t think about it until our organization wanted to do something that was financially out of our means,” DeSalvo said. After developing and submitting a proposal to the Investment Network, DeSalvo began meeting individually with interested investors. Within six weeks, Methow Trails had the money it needed to purchase the land.
Fast turnaround
The fast turnaround was critical to securing the property, DeSalvo said. “Real estate isn’t around forever.” As a nonprofit organization, Methow Trails has turned to grants for support in the past, but obtaining grants usually entails a lengthy process and the funds are often restricted to limited uses. “There is no way any grant cycle could meet what we needed,” DeSalvo said.
While Methow Trails is a major contributor to the Methow Valley economy, the size of the business or the amount of the investment aren’t criteria for making deals, as glass artist Samantha Carlin discovered.
Carlin, owner of Lucid Glassworks, creates custom hand-blown, functional glassware that she sells locally and regionally. For several years she made her glassware at a home studio, and then in a building on the TwispWorks campus. Last year she bought a property in Carlton with a barn, and moved her studio there.
She applied to the Methow Investment Network for a loan to finance an electrical upgrade to the barn for her new studio space. She also proposed to buy, at a later date, a larger and more efficient glass furnace that would allow her to expand production.
“Mine is one of the smaller loans” made through the Methow Investment Network, Carlin said. “It’s one of the reasons I was hesitant to ask for it.” As a self-employed artist, Carlin said seeking traditional financing is daunting. “Business plans can be really intimidating. I can’t tell you how many times I’ve sat down and tried to write one.” The investment network process was “way more casual,” she said.
She completed an application form on the Methow Investment Network website and submitted her proposal. Within two days she got a call from an investor with an appreciation for glasswork, who visited her at her new studio. “Two days after that, I pretty much had my funds,” Carlin said. The loan included money for the electrical upgrade as well as the new furnace, which will arrive at the end of February.
“It was seamless. It was a personal check — one person helping another.” The terms of the loan repayment are very affordable, “a monthly payment that I mail to him,” she said. “It’s pretty sweet, working from home, a place that’s yours in the valley, and especially being able to do what I love.”
Individual investors
When Methow Trails submitted its proposal for the property acquisition, it generated considerable interest among investors, DeSalvo said. “They told us, ‘We love the valley and we love what you do.’”
DeSalvo found that each investor has his or her own approach to evaluating a proposal. “Some were 10 minutes of conversation. Others were a full tour of the property we were considering buying, and discussing exactly how we would use every penny. It was such a cool process to have an investor you can meet with face-to-face. Each has their own take on what is important to them.”
In the end, nine individual investors provided funding for the Methow Trails project, DeSalvo said. All of them have a connection to the valley, although not all live here full-time, he said. “Some of our investors were brand new to the network and this (proposal) brought them into it. Each project pulls in people with a passion for a certain thing.”
That’s a sign of the network’s success, said Linnertz. “There is a continuing pipeline of new members” who are interested in investing in local businesses, he said. During the first year of the program, 32 people signed on as investors. That number has more than doubled to 65 investors over the past three years.
In addition to Methow Trails and Lucid Glassworks, other recipients of funding include eqpd, Old Schoolhouse Brewery, Smiling Woods Yurts, True North Letterpress, Sunny Pine Farm, Pinetooth Press, Alpine Welding, Methow Plumbing, 509 Automotive, Blue Star Coffee Roasters, and PDS Billing. The $3 million invested in these businesses “has resulted in the creation or retention of over 50 jobs in the Methow Valley,” Linnertz said.
Mentoring entrepreneurs
Investors not only provide capital to help local businesses grow, but they also act as mentors to local business owners and entrepreneurs, Linnertz said. Many investors are retired after successful careers, and share their expertise with people seeking to expand their businesses.
To help applicants succeed in their funding requests, the Methow Investment Network has developed a training video on its website that provides advice on how to promote business ideas. The website also provides tips on how to write a business plan. Pitch sessions, held four times a year at TwispWorks, give applicants an opportunity to present their proposals in person to potential investors, and are an opportunity for feedback, Linnertz said.
The Methow Investment Network plans to provide additional support and education to local entrepreneurs this year through a $13,320 grant from the Washington State Microenterprise Association. Among the goals of the grant is improving the quality of loan applications, particularly among younger entrepreneurs, by giving applicants training in writing business plans, developing marketing plans, providing financial projections and pitching business ideas.
The grant will also provide a series of classes and a business competition aimed at encouraging young entrepreneurs, said Julie Tate-Libby, director of programming at TwispWorks. The program will bring seven guest speakers to Liberty Bell High School’s entrepreneurship class, to discuss their experience operating businesses in the Methow Valley. Students will learn about different business models from retail, food and construction trades.
In March, students from Liberty Bell and the Independent Learning Center will tour empty commercial buildings in Twisp and, working in teams, develop business proposals for each building. Community members will vote on their favorite proposal and the winning students will receive a prize. Students and community members will also meet at TwispWorks to brainstorm about possibilities for empty storefronts and future businesses in the Methow Valley.
The goal of the program, Tate-Libby said, is to “provide bridges between Methow Valley youth and the business community.” It will allow local employers to meet potential employees and allow students opportunities to meet employers and “think creatively about future businesses they’d like to see in the Methow.”
