Taking Advantage of Identity Investing

Matt Yglesias has an interesting piece that profiles an scam investment opportunity in which fans can invest in shares of their favorite players. It works like this:

This is structured as a stock offering but it's actually more like a loan. Imagine some billionaire loaned Arian Foster $10 million and in exchange Foster promised to pay the billionaire 20 percent of his future earnings. The idea basically is to securitize that $10 million, so that tens or hundreds of thousands of small investors can each own a piece of it.

Why would fans do such a thing? For the same reason that fans buy jerseys, tickets, posters, etc.: they feel an emotional attachment to teams and players, and express this attachment in the form of purchases that solidify their identity as a fan of a team/player. The key bet that Foster and the billionaire making the loan are making is that fans are willing to pay higher-than-market value for the privilege to own stock in Foster.

Which brings me to an idea in an investment company that I've had for a while. My hometown of Austin, TX has a very strong culture of supporting local businesses. Generally, Austinites express this identity by buying tacos at Torchy's, burgers at P. Terry's, and washing 'em down with a nice cold pint of Fireman's #4. However, I imagine that Austinites would love to support their local businesses not just by consuming, but also by investing. And here enters my idea: Keep Austin Weird Bonds.

I'd bet that Austinites would be willing to loan money at below-market value for the privilege of owning a stake in the local businesses that they cherish. The support-local-business identity would be further reinforced with stickers that local businesses that received funding would have to put on their storefront; something similar to the National Recovery Administration's Blue Eagle.