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Financing Alternatives: OACFDC Annual Conference June 1, 2004. Our Mission. Invest in businesses that create employment in economically challenged communities Help these organizations to gain scale and exist without subsidies

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Financing alternatives oacfdc annual conference june 1 2004 l.jpg

Financing Alternatives: OACFDC Annual ConferenceJune 1, 2004


Our mission l.jpg

Our Mission

  • Invest in businesses that create employment in economically challenged communities

  • Help these organizations to gain scale and exist without subsidies

  • Help these organizations provide improved social outcomes and financial self sufficiency for the individuals they employ

  • Become a catalyst for encouraging other innovative approaches to solving important social issues


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Our Vision

Create a network of businesses that are . . .

  • Financially self sufficient

  • Growth oriented

  • Significant in size

  • Achieving improved social outcomes


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What We Bring to the Table

  • Management team has 30 years of combined experience in the private sector

  • Founder has extensive experience as entrepreneur and CEO

  • Partnership with strategy consulting firm The Monitor Group

  • Business Experience / Expertise

  • Extensive social enterprise research in Canada and the US

  • Hands-on social enterprise experience

  • Hands-on experience with Social Return on Investment framework

  • Social Enterprise Expertise

  • Variety of financing alternatives offered

  • Backed by C$10MM in initial funding by the founder

  • Relationships with regional co-funders

  • Appropriate Capital


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Financing Alternatives

  • Provided through funding partnerships

  • Grants are generally in the C$20K to C$100K range

  • Provided only to enterprises acting with a ‘qualified donee’

    • Grants

    • Loans are generally in the C$50k to C$200k range

    • Interest rates will be assessed based on the risk profile of the business and the value-added support required

    • Businesses must pass due diligence and SCP will take an ongoing governance role

    • Loans

    • Mostly subordinated debt with “sweeteners” (e.g. royalties)

    • Desired rates of return are assessed based on risk profile and value-added support required

    • Businesses must pass due diligence and SCP will take an ongoing governance role

    • Near Equity


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    Our Current Status

    • Began actively seeking investments in 2002

    • Looking to invest approx. C$10,000,000 over 10 years

    • Reviewed over 200 business plans from across the country

    • Total investments to date of approximately C$1MM

    • Provided financing for 8 businesses


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    Portfolio Sample: Inner City Renovations (ICR)

    • Start-up home renovations company in Winnipeg Manitoba

    • Joint venture of several nonprofit housing corporations

    • Renovates run-down housing in the inner city – a niche market

    • Employs low-income inner city residents, mostly Aboriginal Canadians

    • Goal is to become employee owned over time

    Description

    SCP Investment

    • $200,000 in equity and loans

    • Co-invested with local funder (Community Ownership Solutions)

    • Funded start-up costs and working capital

    SCP Value Added

    • Support strategy, financial planning, HR and marketing functions

    • Advise on the creation of social support infrastructure and measurement

    • Take a leadership role on the Board of Directors


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    Current Results

    • Employs low income individuals from inner-city Winnipeg

    • Employs up to 25 full time staff 2/3 of whom are target employees

    • Majority of employees are aboriginal

    • Social worker hired to assist with issues unrelated to the job

    • Laying groundwork for future employee ownership

    • Social Mission

    • 2003 business revenue of approx. C$1MM

    • Expect break-even in year 3

    • Professional management has been added and skills re-aligned

    • Financial Mission

    • Revenue generating partnerships with nonprofit housing corps.

    • Leverage social mission to secure other inner city contracts


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    Our Next Steps

    • Learn by doing:

      • Complete 5 - 10 more deals over the course of the next 2 years

    • Test different models:

      • Test franchising concept

      • Invest in for-profit and non-profit enterprises

    • Scale our portfolio companies:

      • We have invested in businesses that are conducive to growth

      • We see opportunities to expand into new markets

      • We see opportunities to expand within current markets


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    What We are Looking For in a Business Plan

    • Modest Profit Potential

      • Through strong business principles not through subsidies

      • While meeting financing obligations

    • Strong Growth Potential

      • We are looking to create dozens of jobs in each of our portfolio companies

    • Balanced Financial and Social Missions

      • The business must draw the majority of its employees from an economically challenged community

      • Where necessary, the business should provide for the social needs of its employees


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    Contact Information

    Post:

    205 Richmond Street West, Suite 601

    Toronto, Ontario

    Canada

    M5V 1V3

    Phone:

    (416) 646-1871 ext. 106

    Online:

    [email protected]

    www.socialcapitalpartners.ca


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