financing alternatives oacfdc annual conference june 1 2004
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Financing Alternatives: OACFDC Annual Conference June 1, 2004

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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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Presentation Transcript
our mission

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
our vision
Our Vision

Create a network of businesses that are . . .

  • Financially self sufficient
  • Growth oriented
  • Significant in size
  • Achieving improved social outcomes
what we bring to the table

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
financing alternatives

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
our current status

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
portfolio sample inner city renovations icr

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
current results
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
our next steps

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
what we are looking for in a business plan

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
contact information

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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