Advising a social economy enterprise
What you need to know to support a community capital approach.
Support, a determining role
In the context of community capital financing, the advisor’s role is vital. When a company considers going down this path, it is generally in a development phase; it may also be in a critical stage, hoping that its community will provide support. The advisor must help the company refine its hypotheses and strategies to make an informed decision. The stakes are even higher for community bonds and shares.
In these two cases, successful mobilization will not be enough to measure the success of the issuance campaign. The organization’s ability to honor its commitments and reimburse its security holders on time (or eventually) will be essential in the evaluation. The company must therefore make informed choices to ensure that it maintains the trust of its community.
Two possible avenues
Community bonds
Bonds are a loan taken out by an NPO or cooperative from its community. They form a flexible tool with flexible repayment conditions, making it possible to mobilize private capital from all types of investors, all without an intermediary. Is there an NPO or cooperative that you support that would like to pursue this avenue? Advice, self-diagnostic test, resources: there is everything you need to support the issuance of community bonds.
Preferred shares
To increase its level of capitalization, a cooperative can issue social shares, preferred shares or participating preferred shares to achieve greater financial stability. What exactly are we talking about? Explore our documentation on shares to learn everything about this lesser-known avenue.
Is the collective enterprise I am supporting ready to launch?
The right questions to ask yourself
For the issuance of community bonds
Issuance of shares – advisors
Best practice guidelines
Community capital tools are based on the strong bond between the collective enterprise, its members and its community. These are powerful tools for mobilization and financing, but they require rigor and prudence. It is important, as a resource person and supporter, to encourage companies to adopt good practices that will contribute to the success of their campaign and to maintaining the bond of trust with their community.
Best practices for issuing community bonds
Best practices for issuing preferred shares.