Simon Borkin (Community Shares Unit) Presentation

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Introducing Community Shares
Community shares in pictures
The Importance of Equity: The Limitations of Debt
Debt
Equity
Debt is
mechanistic
Controlling
and
disengaged
Seeks
security
Equity is
patient and
engaged
Flexible
Risk sharing
What are community shares?
“The sale of shares in enterprises serving a community
purpose, with the aim of raising at least £10,000 in
capital from no fewer than 20 members”
Powered by Withdrawable Share Capital
Unique to cooperative and
community
benefit
societies
Nontransferable,
nominal
One Member
One Vote
Exempt from
regulation
under the
FSMA 2000
Interest
payment
only
sufficient to
attract
investment
“Community
shares can
give members
meaningful
involvement in
the running of
the society”
Operation
“Community
share offers
can lever
further
funding based
on the ‘first
move’ of the
community”
Governance
“Community
shares offers
can provide
long-term risk
capital linked
to the
performance
of the society”
Leverage
Capital
The benefits of community shares
Community
share offers
can ‘bake in’
the customer
base and
promote
member
involvement in
the operation
of the
enterprise”
Community shares market indicators: 2009 - 2014
Nearly 500 new
societies registered
Almost 200 share
offers undertaken
Est. £35m raised
from over 35,000
members
Average offer
raised £175,000
Average
membership
175 members
Creative and
media
Sports
1%
3%
Average
investment per
member £750
Food and
Farming
8%
Pubs and
Brewing
15%
Regeneration
and
development
7%
Energy and
Environment
33%
Community
Retail
24%
Social Care
2%
Transport
2%
CLT and
Housing
3%
Other
2%
Case study: TreeStation, Manchester
Initially a private tree-work enterprise based in Manchester, converted to a Ben Com
in 2011 having recognised the community emphasis of the venture
Needed significant capital injection to invest in plant and machinery to secure and
deliver woodland management contracts
In 2012 it raised over £140,000 from over 100 members through a community share
offer
Share offer supported through an underwriting fund, and levered in further grant
funding to provide a stable capital base
Key pillars of a successful share offer
Business
model
Community
engagement
Governance
Offer
document
Viable
Scale and
scope
Legal form
Accurate
Profitable
Attracting
support
Rules
Informative
Sustainable
Building
membership
Conduct
Share offer
‘campaign’
What is the Community Shares Unit?
DCLG-funded
programme
launched in
2012 and
running to
March 2015
Partnership
between Cooperatives UK
and Locality
Objective to grow the
market for community
shares, supporting:
• Communities looking to
develop share offers
• Supporters exploring the
community shares market
• Intermediaries, practitioners
and advisers involved in
comshares
With growth comes ‘responsibility’ - the work of the CSU
CSU is working to develop the tools and
structures that will support greater
responsibility over quality for
Market
community share offers
intelligence
CSU
compliance
mark /
Microgenius
Community
Shares
Handbook
Best practice
share offers
Advice and
Support
Practitioner
training and
accreditation
Market Intelligence
Regularly updated
directory of
registrations, share
offers and annual
returns
Searchable and
exportable data
Forms the basis for
more in-depth research
into the development
of community shares
market
Community Shares Handbook
Consolidation of all advice
materials to form Community
Shares Handbook
Oversight from a technical
committee of government
representatives and FCA
Collaboratively developed
with practitioners through an
online platform
Regularly updated and
monitored to ensure
relevancy and accuracy
Introducing Microgenius
Technological tool for
both enterprises and
supporters
Secure payment
facility
Shareholder
register
Social media
and online
presence
Visible portal for
all compliant
share offers
CSU and market development
By sector:
exploring the use of
community shares in
new and emerging
markets such as
heritage, housing,
media and transport
By geography:
developing a ‘hub
and spoke’ model for
a UK-wide CSU
which works
alongside the
devolved nations
By audience:
engaging new and
promising audiences
such as local
authorities, CDFIs
and charities
Get in touch
www.communityshares.org.uk
www.microgenius.org.uk
[email protected]
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