For two years, Dan Grady funded Winfiniti Inc. himself and with the help of friends and family.

For the next phase of development for the startup that makes building-efficiency management software, Winfiniti sought and got help from a new friend, one he met through Spokane LION.

That organization—LION stands for Local Investment Opportunity Network—is a new, loosely organized nonaccredited group that promotes investment in sustainable businesses based in the Inland Northwest.

"This investment is helping us move forward with development of a tool we really need to commercialize," says Grady, who runs Winfiniti from his Browne's Addition home and has one employee in addition to him. "This tool will help us bring a lot more projects to fruition."

Susanne Croft, executive director of Sustainable Resources Inland Northwest, says the works of Spokane LION, which formed in May, and a local investing committee that Sustainable Resources established, called the local money council, are gaining traction.

"There's a buzz," Croft says. "People want more than just stuff. They want to see the impact of their investments."

She says the organizations are following a national trend where more people are looking for ways to invest in local companies, rather than in conventional stocks and mutual funds. As more people become interested on a national level, she says, more information is available about ways to invest locally without running afoul of the U.S. Securities and Exchange Commission.

John Dill II, general manager of Spokane Valley-based eco-friendly packaging-peanut producer One Earth Starch and who is involved in Spokane LION, says the group formed earlier this year, and its members so far have invested a total of $130,000 in two Spokane-area businesses, one of which is Winfiniti.

He expects the group's members to fund more businesses in the future, and he's encouraged by the early activity.

Grady declines to disclose how much Winfiniti received, but he says it was more than $5,000 and less than $25,000. He considers Winfiniti still to be in its startup phase; the company has customers and revenue, but it isn't operating profitably yet.

Dill says, "Initially, we weren't going to fund startups, but that's where the need is."

In this type of investing, the businesses and the investors have to have some shared beliefs, Dill says. Both parties need to want to support what's called a triple bottom line, which adds ecological and social performance to profitability as measures of success.

Along the same lines, he says, such injections of capital are considered slow-money investments, meaning they aren't expected to produce financial returns quickly.

The group's investors, Dill says, are looking for locally owned and operated businesses and expect them to stay in the Inland Northwest. Also, he says, they want businesses that fill a gap in the local economy, providing services or goods that aren't already available locally.

Generally speaking, the financiers in the group make investments individually, rather than collectively deciding to put money into a company.

As with conventional types of investing, the backer typically gets an ownership interest in the company. Winfiniti's Grady says, however, that can be structured in different ways. For example, he and one Winfiniti backer structured the investment as an interest-accruing loan on which the company isn't currently making payments. Once the company reaches certain, pre-determined benchmarks, the loan and the accrued interest are converted into Winfiniti stock.

Croft says this sort of investing is the type of activity she envisioned eight years ago when she started Sustainable Resources. The 501(c)3 organization operates as an educational nonprofit that focuses on teaching businesses about sustainability and helping them find green goods and services. Initially, however, the organization was called Sustainable Local Investment Partners and was focused on trying to find local investments.

"I was looking for something to invest in that aligns with my values," she says. "I started looking for someone to help me invest locally, and there was no one."

While the organization broadened its scope, Croft says she remained interested in local, sustainable investment. Since then, LION groups have begun to emerge in other parts of the U.S., as has a concept known as impact investing.

Initially, Croft says, impact investing was used to describe an anti-Apartheid movement whereby consumers refused to buy from South Africa.

Since then, however, the term impact investing has been adopted to describe local investments in sustainable businesses.

Now, she says, "It's moving in a positive direction instead of creating a negative screen. We're riding this wave of impact investing."

One of the challenges groups face in promoting local investment is finding ways to do so without violating SEC rules. One of the keys, Croft and Dill say, is for organizations to make sure they aren't involved directly in investment talks. Rather, Croft says, Spokane LION and the local money council plan events and invite investors and sustainable business owners.

For example, last May, the local money council put on a meet-and-greet event to which it invited about 60 people, including 12 entrepreneurs who gave short presentations about their companies. Dill says he's aware of at least one investment that came about from two people who met at the event.

"All of that happens off our watch," he says.

Along those same lines, Spokane LION's website describes the group as "a private, members only, nonprofit, non-funded friendship." Members and businesses looking for funding must apply to the group, and individuals in the group decide whether to invest in companies outside of the group as a whole.

Croft and Dill say there isn't any data available locally that quantifies supply of or demand for investment capital for sustainable businesses. Even so, Croft says she's seen demand from both sides for a long time.

"I've been trying to get to this point for eight years," she says. "After all those years, we finally see how to do it."