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Some Common Concerns

Posted June 6, 2022

Here are some common concerns we've collected in conversations during the capital campaign and Keweenaw Co-op’s responses to them.

Concern: All owners are required to invest $2,000.

Response: This is an optional opportunity to invest in the Keweenaw Co-op, and any Michigan resident, business, or entity may participate. It’s not just for owners! Please let your friends know they can also take part in this effort, even if they are not current owners.  


Concern: Keweenaw Co-op is asking owners to fund the entire $7M project.

Response: Keweenaw Co-op is raising at least $1M of our $7M project budget through our community investment campaign. The rest of the money will come from cash we already have on hand, community investment, grants and bank loans.


Concern: This investment is really a donation and there is very little chance of getting your money back.

Response: Keweenaw Co-op is a member of the National Co-op Grocers, a co-op of food co-ops, who provide member organizations consulting services to set up very conservative business plans and run capital campaigns to fund growth. Of course, anything can happen, but the Keweenaw Co-op board and management has followed the recommendations of these consultants who have helped hundreds of co-ops across the country to responsibly take investments of this kind. It is part of our business plan to have investments eligible for redemption 8 years after the new store opens, at the Board’s discretion.  


Concern: There is only one dividend payment at the end of the Certificate holding period.

Response:  Dividends will be paid annually after the new store is open, at the Board’s discretion. The Certificates will begin to earn the dividend rate when the new store at 612 Quincy is open for business. Keweenaw Co-op will have the discretion to pay the first dividend any time during the first 12 months following the opening. The first dividend payment will be for an entire 12-month period, even if it is paid less than 12 months after the new store is open. Subsequent dividend payments shall be due on the same date of each year. However, Keweenaw Co-op may delay the dividend payment if the Board determines that such payments are not possible or advisable based on the financial or other state of Keweenaw Co-op. If the new store opening is delayed until after 2024, a full-year first dividend will be declared and paid no later than December 31, 2025 and subsequent dividends will be paid annually afterward while the Certificate is outstanding subject to the right of Keweenaw to delay a dividend payment. Final dividend payments will be prorated based on the actual date of Certificate redemption.


Concern: There is no specific time frame for the return of the face value.

Response: Nine years after the store opens investors can request to redeem their investment. It is our intent to honor those requests if financial conditions allow at that time. Our financial pro forma projects that the Co-op will build cash reserves in the 8 years after store opening so that by year nine, if projections hold true, we will have the funds to return investments as requested. (If someone doesn't request redemption, the money would continue to earn a dividend.)
Concern: I'm concerned about the risk involved with this investment.
Response: Our offering under the Michigan Invests Locally Exemption (MILE) Act allows small businesses to offer securities without the expense and paperwork burden that a SEC offering would entail. MILE sets parameters and dictates what must go into our offering memorandum. One of those requirements is to be up front and forthright about the risks inherent in the investment. In that way our offering is no different than an investment in any other security, the investment comes with a risk of loss, and money should not be invested that an investor cannot afford to lose. 
That said, the Co-op has a solid business plan, support from retail experts, market analysts, and a solid team of professional architects, engineers, designers and builders. We have lenders that are willing to fund the debt portion of the project, and support from grantors to help fill the gap and keep the required debt reasonable. Our capital campaign has seen 160 people invest over $660,000 so far, and inquiries continue to come at a steady pace. 




1035 Ethel Avenue
Hancock, MI 49930

906.482.2030 tel
906.482.7845 fax


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