to market, to market: how community shares work
DESCRIPTION
This is the presentation used by Simon Borkin of the Community Shares Unit during his seminar at The Young Foundation on Friday, 17 May 2013. This seminar introduces the concept of community shares, illustrates where the model is being used currently, and sets out how new and existing community-based enterprises can go about launching a community share offer to raise much-need start-up finance.TRANSCRIPT
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Introducing Community Shares
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What do these shots have in common?
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What are Community Shares?
Unique to co-operative and community
benefit societies
Non-transferable,
nominal
One Member One Vote
Exempt from regulation under the
FSMA 2000
Interest payment
only sufficient to
attract investment
“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
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The benefits of Community Shares C
apital “Community
shares offers can provide long-term risk capital linked to the performance of the society”
Levera
ge
“Community share offers can lever further funding based on the ‘first move’ of the community” Govern
ance
“Community shares can give members meaningful involvement in the running of the society”
Opera
tion
Community share offers can ‘bake in’ the customer base and promote member involvement in the operation of the enterprise”
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Community Shares Market: Registrations
0
20
40
60
80
100
120
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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Community Shares Market: 2009 – 2012
stats
Over 300 new societies
registered
Over 120 share offers completed
Est. £20m raised from over
20,000 members
Average offer raised £210,000
Average membership
240 members
Average investment per member £900
Food and farming
6%
Renewable energy 47%
Community shop and
other retail 22%
Pubs and brewing
16%
Regeneration and land-use
6%
Sports 3%
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Key pillars of a successful share offer
Business model
Viable
Profitable
Sustainable
Community engagement
Scale and scope
Attracting support
Building membership
Governance
Legal form
Rules
Conduct
Offer document
Accurate
Informative
Share offer ‘campaign’
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Case Study: Bell Inn, Bath
An iconic pub in central Bath suddenly came up for sale as the owners were retiring
A strong community of regulars, musicians and local residents were determined to preserve the ethos of the pub – they had 12 weeks to organise a community buyout
In this short period, the community raised £750,000 and secured mainstream debt finance to meet the overall purchase price of nearly £1m
The Bell Inn is a viable business which will enable interest payments to shareholders, alongside facility for withdrawals
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Introducing the Community Shares Unit
DCLG-funded programme until March 2015
Partnership between Co-operatives UK and Locality (building on an action-learning research programme)
A resource for: • Communities looking to develop share offers
• Supporters exploring the community shares market
• Intermediaries, practitioners and advisers involved in comshares
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Areas of Support
Market development
Comms
Quality assurance
Market intelligence
Advice and support
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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
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Consolidation of all advice materials to form Community
Shares Handbook
Collaboratively developed with practitioners through an
online platform
Oversight from a technical committee of government representatives and FCA
Regularly updated and monitored to ensure
relevancy and accuracy
Guidance and Assurance
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Tailored resources: enterprises,
supporters, advisers
Directory of share offers
Secure practitioners
area
Forums and FAQs
New case studies
Links to helpful
organisations
Communications: e.g. website
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Technological tool for both enterprises and
supporters
Secure payment facility
Shareholder register
Social media and online presence
Linkage to One Click –
online governance
Advice and support: e.g. Microgenius
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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
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www.communityshares.org.uk
www.microgenius.org.uk