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Presented by: Ben Sandel 540-421-6976

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1 Presented by: Ben Sandel 540-421-6976 BenSandel@cdsconsulting.coop BenSandel@cdsconsulting.coop

2 Start with a great story – in three acts - The story of your co-op - The story of your capital campaign – why are you raising money from your members? - The story of your financing – pro forma!

3 Your co-op’s story Your history – who you are, what you’ve done to get this far Your Vision & Ends (if you have them) Your plan – 4 Cornerstones in 3 Stages

4 Your capital campaign story Co-ops exist to serve their members, and capital campaigns do that by:  Providing a meaningful way to interact with members  Offering a service of value to members  Helping you open the store your members are eagerly awaiting Cooperative Principle # 3: Members’ Economic Participation

5 Your capital campaign story Association of Members (group activity) Business Enterprise (building economic engine) Community Focus (providing service) Entrepreneurship (distributing risk, educating About cooperative business)

6 Your financial story – pro forma Demonstrates due diligence Defines the financial need Required for the documentation you’ll be producing

7 Make it legal  Find a good lawyer  Check state & federal laws & exemptions  Review bylaws, articles & incorporation status  See if Preferred Shares are allowed  Check if filings are required  Have your lawyer check your prospectus, subscription agreement & promissory note  Start 3 months ahead

8 Member loans or preferred shares? LOANS Fixed payback dates Show up as Debt Easier sell Members have more control Established and proven SHARES Buyback at board discretion Show up as Equity More challenging sell Board/ops have more control Innovative with less track record

9 Can’t we do both, like a dramady? PROS  Offers options to members and board/operations  Helps balance equity and debt  Provides for more flexible financial planning CONS  Increases paperwork, legal costs, complication  Makes the ‘story’ to members more challenging  Adds burden on operations  May require more filings, registrations

10 Recruit your cast and crew  Coordinator  Callers  Collectors  Large investor contacts  Administrative help and gofers  Promotion and communication teams  Legal, regulatory, financial and campaign expertise Don’t underestimate the time commitment!

11 Secure your early backers

12 Build the set, plan the production INTERNAL Accountability & org chart Financial planning docs Calling scripts and FAQs Call lists Process docs Tracking systems Communication plan Timeline EXTERNAL Risk & disclosure docs Subscription agreements Campaign brochures Appeal letter(s) Testimonials Email updates Press releases Thank you notes Confirmation letters and/or share certificates

13 Determine your premier date  Plan your campaign for Spring or early Fall  Start the legal preparations 3 months ahead, and the rest 6 weeks before implementation  If possible, align your implementation date with the announcement of your lease with contingencies

14 Build the buzz  Add the capital campaign message to member communications well in advance  Foster relationships with local press  Prepare press releases, update website, feature in all social media

15 Rehearse, rehearse, rehearse Make sure materials are ready and systems are working Check with every team member to make sure they are available, committed and excited. Recruit replacements if needed Have at least one caller training session (for ALL callers) the day the appeal letter hits your members’ mailboxes Do practice calls with each other, family etc.

16 Make sure everyone is reading from the same script “Money doesn't talk, it swears...” ~Bob Dylan “Money makes the world go ‘round” ~Fred Ebb “For the love of money is a root of all kinds of evil...” ~1 Timothy 6:10 “Money is power, freedom, a cushion, the root of all evil, the sum of blessings.” ~Carl Sandburg “Money is a needful and precious thing, and when well used, a noble thing…” ~Louisa May Alcott

17 Links to resources Member Loan Toolbox (also applicable for preferred share campaigns) http://www.cdsconsulting.coop/node/566 http://www.cdsconsulting.coop/node/566 Article on sources of cooperative capital http://www.cooperativegrocer.coop/articles/2013-04-11/grow-your-co-op http://www.cooperativegrocer.coop/articles/2013-04-11/grow-your-co-op Article on conducting member loan campaigns http://www.cooperativegrocer.coop/articles/2004-01-08/conducting- member-loan-campaigns http://www.cooperativegrocer.coop/articles/2004-01-08/conducting- member-loan-campaigns Article on member loan programs http://www.cooperativegrocer.coop/node/2398 http://www.cooperativegrocer.coop/node/2398 Article on Preferred Stock offering http://www.cooperativegrocer.coop/articles/2009-01-21/small-town-new- building http://www.cooperativegrocer.coop/articles/2009-01-21/small-town-new- building Webinar: Legal Issues and Alternative Equity Strategies for Cooperatives http://www.uwcc.wisc.edu/movies/LegalWebinar-2013-09-11.mp4 http://www.uwcc.wisc.edu/movies/LegalWebinar-2013-09-11.mp4


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