Re: Early financing, loans & the SEC
From: Stuart Joseph (
Date: Tue, 28 Nov 2006 08:32:59 -0800 (PST)
IMHO, I* think the term "investors" might be misleading if it applies to someone from outside the group that lent them money. It would be best to call them lenders rather than investors.

If a person wants to make you a loan that is not the same thing as an investment as loans are expected to be paid back whereas investors are taking a risk of losing their investment by putting their money into a project that fails. If it succeeds, they get their money back and some type of return on their investment.

I really think that you are best talking to a lawyer- while it is great to ask for advice on the list and gathering information, sometimes an expert opinion is needed, most importantly when it comes to legal questions.

Setting up a co-housing project needs to be treated like a business and that means having a team of experts to help it along- not just architects and engineers, but a lawyer and accountant are just as important, if not more so since they can handle all of the legal and monetary issues that you need to comply with..

Tom Hammer wrote:
Hi All,

Many, many thanks to all who have given us their
experience about how to work out your financial
structure.  We've received two seemingly conflicting
pieces of advice about loans.

Do we risk running afoul of SEC regulations if we
solicit or accept loans from investors who are not
members of the group?  I understand several groups
have done this.  I don't think it's a state specific
question since the SEC is federal.

>From what I read in Liz Walker's book,  EcoVillage at
Ithaca had outside lenders, for example, and she
doesn't mention any SEC red tape...

Any advice or language of loan agreements you can give
us would be extremely helpful.

Tom Hammer
for Concord Village


We did not have a cash-call system.  If we were going
to hit a period of exceptional expenses (much of which could be anticipated), we solicited voluntary member-household contributions, which (unlike the capital contributions) paid interest, and/or solicited outside lenders and investors (including some on this list -- Thanks

Hope this helps.  All the best!

David Heimann
Jamaica Plain Cohousing

Date: Wed, 22 Nov 2006 21:57:49 -0500
From: Dave and Diane <daveanddee [at]>
Subject: Re: [C-L]_ Financial structure advice needed
for forming
To: cohousing-l [at]
<6780710F-7A9E-11DB-BF21-0003936C420C [at]>
Content-Type: text/plain; charset=US-ASCII;

Hi everyone in coho-land!
I just want to clarify one thing--we did NOT have
investors. Anyone who loaned us money had to either be an associate member or know a member of the group well enough to give them a personal loan. When you have investors it creates a whole new ball of wax and you have to create a prospectus, submit an annual report, file with the SEC, etc. etc. etc. etc. Trust me--you do NOT want to go there.

marketing facilitator
jp cohousing  617-522-2209
Box 300420 boston ma

Cohousing-L mailing list -- Unsubscribe, archives and other info at:

Stuart Joseph, 802-463-1954
Project Director
Caer Coburn, a traditional village based upon  and intentional communities
Rockingham, Vermont, USA

Results generated by Tiger Technologies Web hosting using MHonArc.