1.
“ Not for Loss” Social Business Finance Capital Partnerships and other Animals Social Investment Mechanism Workshop Chris Cook , Bristol 12 March 2009

2.
There are two ways of raising finance...... 08/06/09

3.
....Credit and Investment 08/06/09

4.
Investment is either through a Limited Company.... 08/06/09

5.
....a 19 th Century legal dinosaur 08/06/09

6.
...or loans secured by legal claims eg mortgages 08/06/09

7.
But there’s a new furry animal out there.... 08/06/09

8.
...the 21 st Century Limited Liability Partnership (LLP) 08/06/09

9.
An LLP is a corporate body with limited liability.... 08/06/09

10.
...and...errrr...that’s it!... 08/06/09

11.
As far as the Tax Man is concerned it is a Partnership 08/06/09

12.
It’s an “Open” Corporate where we can work with each other 08/06/09

13.
... even without a written agreement 08/06/09

14.
It enables “Peer to Peer” Finance: P2P Credit and P2P Investment 08/06/09

15.
Peer to Peer Credit – the Guarantee Society Buyers 08/06/09 Pool Service Provider Services Fee Fee Guarantee Guarantee Fee Value Credit Sellers

16.
A mutual guarantee of P2P “trade” credit backed by payment into a Default Pool 08/06/09

17.
A Credit Clearing Union alternative to unsecured bank credit 08/06/09

18.
P2P Investment - Capital Partnership Capital Partnership Investors Customers Custodian % % £ 08/06/09 Managers

19.
Capital Partnership – direct Peer to Peer investment in productive assets 08/06/09

20.
“ Equity Shares” - % age shares in revenues or production... 08/06/09

21.
...or Units - redeemable in production 08/06/09

22.
Example: “The Art of Flirting” – a film incorporated as an LLP 08/06/09

23.
The actors received “nth’s” of the gross revenues... 08/06/09

24.
...I got 5%...and the producer the rest... 08/06/09

25.
...except that we needed lights, cameras, pizza, coffee...... 08/06/09

26.
Two Capital Partners invested £10k for 20% of revenues.... 08/06/09

27.
...if there are any 08/06/09

28.
Art of Flirting LLP Art of Flirting Partnership Financial Capital (Investors) Viewers Custodian % % £ 08/06/09 Human Capital (Actors, Producer, Me)

29.
Everyone was on the same side 08/06/09

30.
Example: Albion Trust...a charity 08/06/09

31.
..who provides affordable office space for social enterprises 08/06/09

32.
...due to demand they bought a disused church next door 08/06/09

33.
...and plan a £4m development 08/06/09

34.
But if they borrow, the rents will be unaffordable 08/06/09

35.
Solution? An Albion Partnership? Albion Partnership Investors Tenants Custodian % % £ 08/06/09 Managers

36.
Example: a community wishes to build a wind turbine...

37.
Energy Pool Turbine Investor Community Custodian Energy Energy Energy Manager

38.
Managers receive %age of production

39.
Suppliers may invest equipment & materials: must invest agreed % profit

40.
Investors provide development Capital by purchasing redeemable Units

41.
Outcome: turbine financed by selling <40% of production. 08/06/09

42.
Example: a mapping company 08/06/09

43.
...converted to a mapping LLP... 08/06/09

44.
...to bring in marketing and development partners.. 08/06/09

45.
...unfortunately, the partners fell out... 08/06/09

46.
...and it all went Pear-shaped 08/06/09

47.
The Capital Partnership aligns stakeholder interests.... 08/06/09

48.
...but it’s not a magic bullet 08/06/09

49.
Conventional Finance requires binding contracts.... 08/06/09

50.
....partnership finance requires consensual agreement... 08/06/09

51.
...but there may be no magnetism.. 08/06/09

52.
A Capital Partnership is not an Organisation ... 08/06/09

53.
...it does not own anything, do anything, employ anyone, or contract with anyone... 08/06/09

54.
...it is simply a framework within which the stakeholders self organise ... 08/06/09

55.
There is no Profit and no Loss within a Capital Partnership 08/06/09

56.
I believe it achieves Yunus’ Not for Loss Social Business ideal 08/06/09

57.
Thank You 08/06/09