Financing socent mmu guest lecture nov 2011

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guest lecture given on financing options for social enterprise to students at Manchester Metropolitan University on 25 Nov 2011

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Financing socent mmu guest lecture nov 2011

  1. 1. Financing social enterprise guest lecture to MMU students Nov 2011 www.adrianashton.co.uk
  2. 2. What type of cash do you need? Adrian Ashton
  3. 3. What do you need the cash for? <ul><li>Dealing with failure ( 'rebooting' the business ) </li></ul><ul><li>fashion/credibility </li></ul><ul><li>Validation ( reassuring yourself ) </li></ul><ul><li>Set-up </li></ul><ul><li>Development </li></ul><ul><li>Working capital </li></ul>Adrian Ashton
  4. 4. Factors influencing choice of money <ul><li>Cash-flow </li></ul><ul><li>Time-scale </li></ul><ul><li>Length of time money needed for </li></ul><ul><li>Likely results of activity/project </li></ul><ul><li>Attitude to risk </li></ul><ul><li>Available security </li></ul><ul><li>‘ Peer pressure’ </li></ul><ul><li>Contribution to mission and long-term sustainability </li></ul><ul><li>Impact on reputation and ability to ‘lever in’ further money </li></ul>Adrian Ashton
  5. 5. Know what Investors want <ul><li>Their money back ( loans, equity ) </li></ul><ul><li>Financial Return ( loans, equity ) </li></ul><ul><li>Social Return ( grants, loans, equity ) </li></ul><ul><li>Outputs & Outcomes ( grants ) </li></ul><ul><li>Security ( loans ) </li></ul><ul><li>Partners ( grants, loans ) </li></ul><ul><li>Exit Strategy ( equity ) </li></ul>Adrian Ashton
  6. 6. Traditional sources of cash <ul><li>Personal savings </li></ul><ul><li>Family and friends </li></ul><ul><li>'sweat equity' </li></ul><ul><li>Debt (bank loans, overdraft) </li></ul><ul><li>Equity (dragons and angels) </li></ul><ul><li>Factoring </li></ul><ul><li>Retained profits </li></ul><ul><li>Grants </li></ul>Adrian Ashton
  7. 7. 'social enterprise specials' <ul><li>CDFI </li></ul><ul><li>Community shares </li></ul><ul><li>Social impact bonds </li></ul><ul><li>Loan stock </li></ul><ul><li>'In-kind' </li></ul><ul><li>crowd-funding </li></ul>Adrian Ashton
  8. 8. Some problems with grants... <ul><li>Lead time </li></ul><ul><li>Restrictions on use </li></ul><ul><li>Cash-flow implications </li></ul><ul><li>Admin time/cost in monitoring & reporting </li></ul><ul><li>Risk of 'claw back' </li></ul><ul><li>Risk to credibility </li></ul>Adrian Ashton
  9. 9. GOOD MONEY WILL NOT MAKE A BAD ENTERPRISE GOOD Adrian Ashton
  10. 10. Further sources info & reading <ul><li>Unlocking the potential – a guide to finance Social Enterprise UK </li></ul><ul><li>http://www.ncvo-vol.org.uk/sfp </li></ul><ul><li>Simply Finance Co-operativesUK </li></ul>Adrian Ashton

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