ASK AN EXPERT: How to raise investment using SITR

AGENDA SITR Funds Crowdfunding and Community Shares Investment direct through individuals SITR & Technical Guidance Q&A

WHAT IS SITR? Watch and share the video on YouTube

THE EXPERTS Grace England, Resonance Dave Boyle, The Community Shares Company Russ Bubley, I for Change Neil Pearson, Mills & Reeve Melanie Mills, Big Society Capital

Raising investment through: SITR Funds Grace England, Resonance

Resonance SITR Funds

Social Impact Investment Company 16 year track record FCA Authorised Fund Manager 170m Funds Under Management 8 operational impact investment funds Bristol, Birmingham, Manchester, Cornwall & London Our m i s s i o n is to co nnect capital a n d social enterprise

Resonance SITR Funds: REGIONALLY FOCUSED B R I S T O L LAUNCHED FEB 2016 NORTH EAST MERSEYSIDE YORKSHIRE GTR MANCHESTER W E S T M I D L A N D S LAUNCHED FEB 2018 BRISTOL W.MIDS LONDON & SE CURRENT FUNDS POSSIBLE FUTURE FUNDS

SITR FUNDS.

SITR Funds: THEPROS TIME &RESOURCE Investors already secured ü no pitching or marketing ü no chasing ornegotiating Quicker, straight-forward process One point ofcontact Fund covers investor relations EXPERIENCED SUPPORT Fund Investment Team lead Constructive Feedback ü Input into business plan ü SITR eligibility Ongoing monitoring & support PLANNING Standard process defined Key milestones to work to Less risk of wasted time Plan ahead - already waiting, standard terms CONNECTIONS Business Support not just ü Connect to other enterprises ü Connect to networks locally

SITR Funds: THECONS Less flexibility on terms more standard offering Could potentially get lower interest rate from supporters Don t have a direct relationship with investors Reporting requirements of Fund impact and financials (but this is more of a help than a hindrance in the long-term!) DD Experienced team assessing business and can t just look over holes or take a gamble if they like what you do (but also helpful in the long-run!)

So if you re looking at SITR SITR Funds are particularly helpful if: You don t have a ready made group of supporters who will invest You re tight on time / resource You d prefer one point of investorcontact You have regulatory concerns about launching your own fundraise You have time restrictions (you need by a specific date) You want support through the investment process If you re planning ahead and need source to rely on

Raising investment through: Crowdfunding & Community Shares Dave Boyle, The Community Shares Company

Key Features One member, one vote, regardless of amount of share capital Non-transferable shares, with no capital gain possible Exempt from regulation under the FSMA 2000 - therefore affordable Interest can be paid on share capital (at a level sufficient to attract investment so investors are focused on long-term community benefits, not personal gain) More invested per person than crowdfunding Provides an easy exit route for investors in small firms. It can be withdrawn by the shareholder, subject to terms and conditions set by the firm.

What you need A project requiring capital and (ideally) projected rates of return A crowd who strongly identify with you or your project Willingness to share ownership and governance with that crowd The right legal structure A group to lead this

Komedia Bath

Komedia Bath 1. Raised 370K (inc 100K match from BSC) from 304 people (average invested 1200) 2. Share offer ran for 68 days 3. 3% interest, withdrawable after 3 years contingent on new capital being introduced 4. Core external costs were for platform costs c. 6.5%

What help is there? The Hive - 4 days of support for 100 Power to Change Booster Fund Development Grant - up to 10K More Than a Pub - consultancy support and up to 2.5K Reach Fund - up to 15K Crowdfunder/Power to Change Starter Fund - up to 6K match

Raising investment through: Individuals Russ Bubley, I for Change

Frontline credit

Q&A What (if any) is the relationship between SITR and EIS/SEIS? Can a project be eligible for SITR and EIS/SEIS schemes simultaneously? What alternative platforms are there to Crowdfunder? What Resonance-type fund managers are available in the North East? What does the South East cover? What examples are there of a Community Pub BenCom/tenant model qualifying for any of the tax relief schemes? Is there an expected level of interest on investment that HMRC would expect to see? How does SITR work using a Community Shares model?

FOUR TOP TIPS

GRACE S TOP TIP Make sure your investor - whether fund manager or individual investors - are aligned with your values. And make sure you do your own due diligence on your investors. You are going to be in an investment relationship for over three years so it s important that it works.

DAVE S TOP TIP To make it worthwhile applying to use the tax relief, you need to ensure the investors who might find this most appealing know about it! To do this, make sure their accountants and professional advisors (the people who are most likely to have relationships with High Net Worth and Sophisticated Investors) know so they understand what tax relief is and does and so they are likely to talk to their clients about it!

RUSS TOP TIP Whatever option you choose to raise investment using SITR, do what s right and the best option for your individual organisation. Do your research and select your route.

NEIL S TOP TIP Using a tax relief including SITR can be timeconsuming so do your tax homework early! Making sure you are eligible and gaining preassurance will help you to reduce risk, wasted time and money. This will also ensure your credibility with potential investors.

HOW TO FIND OUT MORE WATCH READ SITR playlist on YouTube READY TO PROCEED? Sign up for more information on the Social Investment Tax Relief. 38

THANK YOU For more information, please contact: Grace England, Resonance, grace.england@resonance.ltd.uk Dave Boyle, The Community Shares Company, dave@communityshares.co.uk Russ Bubley, I for Change, russ@i-for-change.co.uk Neil Pearson, Mills & Reeve, Neil.Pearson@mills-reeve.com Melanie Mills, Big Society Capital, mmills@bigsocietycapital.com Frontline credit

bigsocietycapital.com/get-sitr Big Society Capital Ltd registered in England and Wales. Registered No. 07599565. Authorised and regulated by the Financial Conduct Authority No. 568940