Post on 14-Dec-2015
transcript
“Let’s put on a show!”Planning a Capital Campaign
Presented by: Ben Sandel
540-421-6976 BenSandel@cdsconsulting.coop
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!
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
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
Your capital campaign story
Association of Members(group activity)
Business Enterprise(building economic engine)
Community Focus(providing service)
Entrepreneurship(distributing risk, educatingAbout cooperative business)
Your financial story – pro forma
• Demonstrates due diligence
• Defines the financial need
• Required for the documentation you’ll be producing
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
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
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 planningCONS Increases paperwork, legal costs, complication Makes the ‘story’ to members more challenging Adds burden on operations May require more filings, registrations
Recruit your cast and crew Coordinator Callers Collectors Large investor contacts Administrative help and gofers Promotion and communication teams Legal, regulatory, financial and campaign expertiseDon’t underestimate the time commitment!
Secure your early backers
Pre-commitments from your board, volunteers and a few key supporters must make up
10 – 15% of your total capital campaign goal.
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
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
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
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.
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
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 Cooperatives http://www.uwcc.wisc.edu/movies/LegalWebinar-2013-09-11.mp4