busnescymru.llyw.cymru/busnescymdeithasol /businesswales ... · appeal • Build your team • Do your research • Choose the right platform • Know your target audience • Create

Busnes Cymdeithasol Cymru

Social Business Wales/busnescymru.llyw.cymru/busnescymdeithasol /businesswales.gov.wales/socialbusinesswales

Social Business Wales New

Start

Community Finance Session

Carly Mc Creesh

Project Manager



Why are you here??



• Non repayable finance – Grants, donation based

fundraising,

• Repayable Finance – Equity, Debt finance, social

investment, peer to peer lending, angel investors,

friends and family

• Sales of goods and services- cash sales, credit,

contracts

• Blended finance

What are the most common ways of raising

finance for start up social businesses



• Have you heard of Captain Tom? £32.8m!

● #MasksfornhsHeroes > £2.2m

● Crowdfunder’s #PayItForward scheme > £7m

○ £3.8m raised by 1000 UK businesses from 77,000 supporters

○ £3.5m raised by community and charity projects

100% free for social businesses during the crisis

Other platforms – kickstarter, justgiving, gofundme, iFundWomen

Is it now a good time to crowdfund??



• Finance for some or all of your start up costs – this is reducing

• Adapting in times of crisis funding - where business is not as usual

Different types of crowdfunding:

Reward based * Donation based * Equity based * Debt based

Crowdfunding and start ups



Lets see what others are up to across Wales

and the UK

Tarts



• Positive way to test the market – validates your business plans

• Build up supporter/customer base – opens or retains the

dialogue with customer base during this time

• Positive PR exposure – awareness

• Less risky – not giving up equity

• Funders and commissioners like it- shows credibility

Pros of Crowdfunding



Cons of Crowdfunding

• Timeconsuming – before and after

• Reward based crowdfunding – often potential little

financial pay off and need to send merchandise

• Current climate in some areas there is investor fatigue –

e.g. Flood emergency funding, C19 response

crowdfunding



Key Hints and Tips for a successful crowdfunding

appeal • Build your team

• Do your research

• Choose the right platform

• Know your target audience

• Create marketing materials and a marketing strategy

• Set goals

• Make the reward worthwhile

• Communicate openly

• Follow through on your promises



Why it works:

Show and tell – you can see

the cooking lessons and

community eating

Beneficiary stories

Founder drives the video –

people trust and invest in

people

https://www.crowdfunder.co.uk/made-in-hackney-1

https://www.crowdfunder.co.uk/made-in-hackney-1



Community Shares

• Must be a society to be able to do this

• Way to raise finance from a community or community of interest.

• 1 member 1 vote – with equal votings rights

• Democratic control

• Withdrawable non transferrable shares

• Protects against personal gain – can pay a small interest payment but classed as a reward

• Prevalent in community pub, energy, broadband and community shop sector

• Trends – sports – community broadband – food distribution



Pros and Cons of Community Shares for

Start UpsPros Cons

Low risk equity- patient capital Classified as debt on your balance sheet

Democratic control and more buy in and engagement

with members – more formalised relationship with the

investors- more likely to volunteer and be customers

Time consuming and ongoing administration

Embed membership in the decision making of the

organisation

Engagement with members – misconception or not??

Attracts higher investment with the member

Tax relief possible for investors

Creates a pool of individuals to foster innovation and

future investors in new services and products



Roadmap to community shares:

• Engaging community/crowd

• Developing the team

• Drafting the share offer document

• Promoting the offer

• Launching your service



Grant Funding

• Wales Coronavirus Resilience Fund- Community Foundation Wales

• National Lottery Community Fund:

❖Awards for all

❖People and places

❖Coastal communities Fund

❖Arts council

❖Sports wales

❖Heritage lottery funding



Cont…. Grant Funding

• Voluntary Services Emergency Fund

• Active Inclusion Fund

• Social Investment Cymru

• Comic Relief Community Fund in Wales

• Third sector resilience fund for Wales

• Landfill Disposals Tax Communities Scheme



Pros and cons for grant funding

Pros Cons

Allows you to trial and test your business idea with

minimal risk

Can restrict delivery and flexibility to ensure that

funders requirements are met

Gives some financial reassurance and can cover core

start up costs

Potential for claw back if you do not deliver

Allows you to purchase the necessary capital start

up

Doesn’t always fit well with commercial/business

models

Exposure as part of a funders portfolio Can create a grant dependency culture



Things to consider when looking at which finance

option is right for you and your business

• What you need the money for

• Future aspirations for raising capital

• Timings – how quick do you need money

• Business model and operations

• How much money you need

• Your end beneficiaries/product



Any Questions???

Documents

busnescymru.llyw.cymru/busnescymdeithasol /businesswales ... · appeal • Build your team • Do your research • Choose the right platform • Know your target audience • Create