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“Let’s put on a show!” Planning a Capital Campaign

Presented by: Ben Sandel 540 -421-6976 BenSandel@cdsconsulting.coop. “Let’s put on a show!” Planning a Capital Campaign. - 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!.

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“Let’s put on a show!” Planning a Capital Campaign

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  1. Presented by: Ben Sandel 540-421-6976 BenSandel@cdsconsulting.coop “Let’s put on a show!”Planning a Capital Campaign

  2. - 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! Start with a great story – in three acts

  3. 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 Your co-op’s story

  4. 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 Your capital campaign story

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

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

  7. 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 Make it legal

  8. 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 Member loans or preferred shares?

  9. 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 Can’t we do both, like a dramady?

  10. 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! Recruit your cast and crew

  11. Pre-commitments from your board, volunteers and a few key supporters must make up 10 – 15% of your total capital campaign goal. Secure your early backers

  12. 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 INTERNAL Accountability & org chart Financial planning docs Calling scripts and FAQs Call lists Process docs Tracking systems Communication plan Timeline Build the set, plan the production

  13. 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 Determine your premier date

  14. 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 Build the buzz

  15. Make sure materials are ready and systems are working Check with every team member to make sure they are available, committedand 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. Rehearse, rehearse, rehearse

  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 • Article on sources of cooperative capital 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 • Article on member loan programs http://www.cooperativegrocer.coop/node/2398 • Article on Preferred Stock offering http://www.cooperativegrocer.coop/articles/2009-01-21/small-town-new-building • Webinar: Legal Issues and Alternative Equity Strategies for Cooperativeshttp://www.uwcc.wisc.edu/movies/LegalWebinar-2013-09-11.mp4

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