Please read our general FAQs to familiarize yourself with Co-op information and updates.
What is Preferred Stock?
Preferred stock is a common way that co-ops are funded. Owners can make investments in Chicago Market to help construct, equip, and open our Co-op. Chicago Market is raising $3.3 million from preferred stock and donations, and as the campaign launches, we are already almost 25% of the way to our goal.
Preferred stock sounds like an unusual way to fund a co-op. Is this typical of how co-ops are funded?
It is! Many co-ops use Preferred Stock as part of their funding, and we’re excited to offer an opportunity for Owners to further invest in their Co-op. See the Memorandum for details.
Why does Chicago Market need Preferred Stock? (Isn't Chicago Market funded by Owner Equity?)
Preferred Stocks are a standard form of financing for co-ops because Owner equity derived from common stock shares is generally insufficient to finance an entire project. Chicago Market will be funded, in part by common stock and Owner loans, but also by bank loans, TIF funding, and grants and donations. Preferred Stock funding is a portion of the funding for Chicago Market.
Who is eligible to buy Preferred Stock ?
Any Owner of Chicago Market residing in the state of Illinois is eligible to buy Series A Preferred Stock.
Series B Preferred Stock is also available to accredited investors, whether the prospective investor is an Owner or not. Series B investors must be residents of the United States. If you are interested in Series B Preferred Stock, ask us for details.
How much may I invest in Chicago Market?
The maximum Preferred Stock purchase is $350,000, and the minimum investment is $1,000. We're looking for an average investment of $5,000 - $7,500 but will also need some Owners to invest $10,000, $20,000, $50,000 or even more to meet our goal.
But there's no upper limit for how much you can donate to Chicago Market and a tax-deductible donation option is available.
If I made an Owner loan previously, may I also invest in preferred shares?
This proposed dividend rate for Series A Preferred Shares is up to 7%, based on board discretion. That’s a great rate, much better than I can get from my bank currently. Can I convert my earlier Owner loan to preferred shares?
We thought you might ask that. Thanks to the strength of our business plan, the potential of our location, our leadership, and our market projections, we are able to offer a very favorable proposed dividend rate that we would like to benefit Owners. We would ask that you please consider increasing your investment, as you are able, if you convert a loan to preferred shares. Email us to get more information about this process.
Can I divide my preferred stock purchase up over time? (i.e. pay a little each month)
Chicago Market will happily accept multiple preferred stock purchases at different times from the same Owner (e.g. if someone wants to invest in the beginning of the campaign and then decides to invest more at a later time), but only while the stock offering period is open. The Board will close the offering at their discretion, and we hope to reach our $3.3 million goal by June of 2022, so we encourage you to make your investment as soon as you are able. Each individual stock purchase must meet the minimum $1,000 threshold. If you have more questions or want to discuss a plan or timeline, please email us.
Is my money safe if I choose to invest it in Chicago Market?
As with any investment and new business, there are risks for Chicago Market. While we are confident that the project will succeed based on our location, strong market study, solid business plan, committed leadership, highly experienced general manager, and broad community support, it is always possible that it will not succeed. Never invest more than you can afford. We recommend that Owners think of this investment as part of their overall investment portfolio, rather than using funds needed for their day-to-day finances. Every investor is encouraged to carefully review the Memorandum with all the Preferred Stock Offering Terms.
Will the Co-op buy back Preferred Stock at a future time?
As the Co-op’s business matures and is profitable, the Board may buy back Preferred Stock at their discretion. Please see the Memorandum for more information.
That is a lot of money to raise—why so much?
There are a lot of expenses to opening a new grocery store from scratch, including construction, purchase of equipment, staff training, and initial inventory. Refer to the Financial Projections Addendum in the Memorandum if you would like a more detailed breakdown or let us know if you have specific questions.
Do you think we will be able to raise this much money?
Yes. Co-ops around the country have been raising money from their owners in order to expand or build new stores for decades. We think our Owners will be motivated to invest in order to get a wonderful, full-service grocery store as well as earn potential dividends on their investment. This financing method aligns with our co-op principle of Owner Economic Participation.
What happens if we don’t raise enough?
If we don’t meet our goal of $3.3 million it will take longer to get our new store open. But we think we’ll reach the goal, if you will help!
What will my investment be used for?
Preferred Stock investment will be used for design, permitting, construction, equipment, hiring and training employees, and marketing the store - in other words, everything necessary to make Chicago Market a reality.
Do you have a financial/business plan that shows how Chicago Market will spend its money?
We do. Our Memorandum has detailed financial projections based on a very comprehensive business plan developed based on our Firebrand Assessment and by our general manager, who has over two decades of co-op management experience. We’re happy to answer any specific questions you might have.
Can I speak to an attorney/my financial advisor/my accountant about a Preferred Stock investment?
Please do! Speak with any representative that you wish, and we are also happy to connect with those representatives with your permission to answer any questions they may have. Although the Series A Memorandum is a confidential document intended only for current Owners with a primary residence in Illinois, you may share the Memorandum with a representative in order to help you evaluate the opportunity and risks of a Preferred Stock investment in Chicago Market.
How is the dividend on the Preferred Stock treated for tax purposes?
Our accounting team confirmed that simple interest will be paid out annually, at the Board’s discretion. A 1099-DIV will be issued for the dividend payment.
Is there a deadline for buying Preferred Stock ?
The campaign will wrap up at the end of May and we'd love to have all investments completed by mid-June. The Board of Directors will close the investment offering period at their discretion. The sooner we reach our goal of $3.3 million, the sooner we can get our store open.
I want to do something, but I don’t have the minimum investment amount!
There are a number of ways for you to participate:
You already participate by being an Owner and paying for your Ownership share. If you have not paid your share in full, it is very helpful if you finish that during our capital campaign. If you’re a Founding Owner, you may also consider Leveling Up to the Cultivating Owner level. Level Up here. (installment plan available)
Consider making a donation, in any amount, to the Co-op. Some Owners are planning to include Chicago Market in their year-end giving in 2022, and we have tax-deductible options available. Once our store is open, we will not be asking Owners to donate on a regular basis, but will be giving back to the community and living out our co-op values. But this year, we need our Owners to help us reach our capital campaign goal and encourage all Owners who are able to consider a donation, in any amount. Every bit helps! Donate here. (recurring donation option also available)
Telling everyone you know that we need their help to get our new store financed would be a big help! Have them email the Co-op for more information or if you’d like to give us their name and number we can call them.
Buy gift Ownership shares for friends and family (on the SHOP tab of our website).
What happens to my investment if I die?
Your investment is part of your estate and is treated like the rest of your assets. Consult with your financial advisors to include this investment in your estate planning.
What happens if I need the money back early?
You should not expect to get the money back early. You can contact the Board should you have an extreme circumstance; any early return is always at Board discretion.
What if I have more questions?
We’d be happy to talk further and answer any questions you have. Please contact us at [email protected] or Dan Arnett, our General Manager at [email protected] or (859) 361-4499.
Or stop by our booth at the weekly Uptown Farmers Market to talk in person.
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