National Co-operative Investment Fund Investing in Co-operative Success!

1. National Co-operative Investment FundInvesting in Co-operative Success! Presentation to: CoopZone eLearning Session Date: December 11, 2012

2. Objective To share news about the proposed new Co-operative Investment Fund being led by a group of CCA members To provide an opportunity for Q&A To develop a new group of Champions in support of the Fund

3. Our Vision A national pool of funds available to support the growth and development of existing and new individual co-operatives; a fund that is built with investments from the co-operative sector. Investing in co-operative success! “ ”

4. Leadership We need support from co-operatives and co-operative leaders from across Canada to take a leadership role in the creation of a new Fund that will support the development of co-operatives across Canada, one co-op at a time. Your investments will generate a market rate of return (if you elect to support the Fund through loan certificates) and you will share in the net earnings of the Fund (if you elect to support the Fund as an Equity investor). The Fund is sustainable at $20 million; we are seeking to launch with $40 million in pledges.

5. Overview The Opportunity The Benefits The Details The Next Steps Q & A

6. The Opportunity • Co-operatives play a significant role in the Canadian economy providing both financial and social returns • Co-operative have a long-term survival rate that is almost double that of investor-owned companies • Co-operatives need access to capital in order to grow, expand and develop • Unlike other forms of business, co-operatives are challenged to access outside sources of capital • An estimated 20% of co-operatives seeking traditional financing, represent our potential market

7. Our Program • Creation of a co-op that operates a national pool of funds • The Fund will be built through sector investments • Provides an opportunity for co-operation amongst co-operatives • Will complement existing loan and investment programs • Requires pledged investments of between $20 and $40 million plus $1 million in donations to launch the Fund

8. Our Fund • 75% of pledges in the form of equity that will share in the annual earnings of the Fund • Financial modeling illustrates an ability to sustain a market competitive dividend program • 25% of pledges in the form of investments (loan certificates) that will receive market rates of return • Within the first ten years between 200 and 400 co-operatives will have access to the capital that they need to expand and develop their businesses

9. Co-operative Investment All forms of co-operative are eligible to apply to the Fund The Fund will also lend to individuals that are making direct investments into a co-operative Ongoing mentoring will ensure that individual co-operatives will prosper as a result of their involvement Compared to other sources of traditional financing, our Fund understands the co-operative model and can take a patient approach in support of business plans

10. The Details • Governance Model: • Multi-Stakeholder Co-operative with Directors that are accountable to the Fund, the Members and the Sector • Business Model: • Small core team with outsourced expertise • Financial Model: • Sustainable at $20 million paying out market competitive rates of return • Goal is to launch with pledges of $40 million or more

11. $20 Million Fund

12. $40 Million Fund

13. Next Steps Confirm a minimum of $20 million in pledges Create the co-operative, establish the Board and retain core Team Develop internal policies Launch a marketing, awareness and business development program Issue first loan in 2013

14. Pledges To-Date Vancity: Up to $5 million (with conditions) The Co-operators: Up to $500,000 (with conditions) CWCF: $250,000

15. Your Support Can we count on you to take a leadership role in supporting the creation of the Fund? Be a leader investing in co-operative success!

16. Your Questions ?

17. Thank You!

18. Development Finance:Sharing Experiences CoopZone Webinar December 11, 2012

19. Requirements Pre-development – group development, feasibility, etc. Start-up – capital assets, working capital, etc. Growth and Expansion – capital assets, etc. The unforeseen

20. Sources Equity – members’ shares, members’ loans Sweat Equity – uncompensated/deferred payment for members’ contributions Debt – short term and longer term, working capital, etc. Insurance – liability, fire, performance bond, etc. Grants – non-repayable contributions

21. The Challenges of Financing Financial service providers’ lack of knowledge of co-ops Lack of understanding of role of capital within co-ops (capital serving people rather than people serving capital) Lack of the co-op entrepreneurs’ understanding of financing issues and options Few dedicated co-op sources particularly for venture or patient capital Few grant funding sources

22. Sharing Experiences • Please share a particular experience or challenge you have had in securing appropriate financing. • Did you overcome it? • If so, how? • Any particular advice coming out of the experience?

23. Potential Funders The Co-operators Carrot Cache Canadian Alternative Investment Co-op Tenacity Works – The Worker Co-op Fund Local Credit Unions sometimes have small CED/Co-op Grants and/or Loans Provincial government programs – vary dramatically from province to province