introducing the community shares unit
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Introducing the Community Shares Unit
What is the Community Shares Unit?
DCLG-funded programme launched in 2012 and running to March 2015
Partnership between Co-operatives UK and Locality (building on an 2009 action-learning research programme)
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
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”
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
Powered by Withdrawable Share Capital
The benefits of community sharesCa
pita
l
“Community shares offers can provide long-term risk capital linked to the performance of the society” Le
vera
ge“Community share offers can lever further funding based on the ‘first move’ of the community”
Gove
rnan
c e
“Community shares can give members meaningful involvement in the running of the society”
Oper
atio
n
Community share offers can ‘bake in’ the customer base and promote member involvement in the operation of the enterprise”
Community shares in pictures
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
Community shares over last five years
There have been 153 community share offers compared to 108 flotations (or Initial Public Offerings) of UK listed companies in the last five years E&Y IPO Global Centre of
Excellence
2009 2010 2011 2012 20130
5
10
15
20
25
30
35
40
45
7
29 2826
21
8
20
30
36
59
IPOs Community share offers
Community shares market indicators: 2009 - 2013
Nearly 400 new societies
registered
Over 180 share offers
undertaken
Est. £30m raised from over 20,000
members
Average offer raised
£200,000
Average membership 200 members
Average investment per member £1,000
Creative and media2% Pubs and
Brewing15%
CLT and Housing
3%Regenera-tion and develop-
ment7%
Community Retail24%
Other2%
Transport2%
Social Care2%
Energy and Environ-
ment33%
Sports 3%
Food and Farming8%
Key pillars of a successful share offer
Business model
Viable
Profitable
Sustainable
Community
engagement
Scale and scope
Attracting support
Building membersh
ip
Governance
Legal form
Rules
Conduct
Offer document
Accurate
Informative
Share offer
‘campaign’
With growth comes ‘responsibility’ - the future work of the CSU
Best practice share offers
Market intelligenc
e
Community Shares
Handbook
Practitioner training
and accreditati
on
Advice and Support
CSU compliance mark /
microgenius
CSU is working to develop the tools and structures that will support greater responsibility over quality for community share offers
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
Practitioner training and accreditation
Informed Current
High-quality Consistent
Recognition that
advice is:
Accredited training
based on practical
experience
Ability to issue
Community Shares
Compliance
Continued support as Community
Shares advisor
“to establish and operate a kite mark or code which would support the adoption and diffusion of good practice of community share offers as part of a co-regulatory framework ”
Underpinned by the Community
Shares Handbook
Awarded by accredited
advisers with CSU monitoring and
peer review
Associated complaints
procedure in which CSU arbitrates
Offered in conjunction with
hosting on Microgenius
Community Shares compliance
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 is running Microgenius as a pilot to explore the value of an online platform to host community share offers – since June 2013, six share offers have raised over £800,000
Online Resources
Tailored resources:
enterprises, supporters,
advisers
Directory of share offers
Secure practitioner
s area Forums and
FAQsNew case studies
Links to helpful
organisations
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
communityshares@uk.coop
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