Brian Iler from Iler Campbell LLP presented at the 2008 Social Finance Forum, Toronto

1. Hybrid Structures:
Raising Community
Capital
Social Finance Forum
November 18, 2008
Presented by Brian Iler

2. Structuring Social Enterprise
Choice of structure will vary – in part - with
the intended source of capital:
!!from wealthy individuals with a social
conscience? CIC an interesting option
!!from PRIs - L3C may be suited
!!from the community served – often the
choice will be a co-operative –the original
“hybrid”

3. Co-operatives
!! Some co-operatives are primarily social,
or even charitable
!! Others operate closer to the business
end of continuum
!! All co-operatives are a hybrid of social
and business objectives – the difference
is in the weighting

4. Characteristics
Co-operatives:
!! Are based in the community served
!! Are democratically controlled
!! Primarily draw on their community’s
financial resources for capital
!! Have a wide range of available
investment vehicles

5. Raising Community Investment
Capital
Two issues:
!!Capital campaign must be cost-effective
and reasonably efficient
!!Vulnerable potential investors need
protection
For those who are familiar with the social
enterprise, usually no regulation.
For those who aren’t – some form of risk
disclosure is indicated – and required

6. Ontario’s Unique Co-op
“Offering Statement” Regime
Where
1.! exemptions not available, or
2.! the marketing of co-op securities would be
enhanced by a government approved
disclosure document,
an Offering Statement is prepared and approved
(“receipted”) by government.
quot;! “Full true and plain disclosure of all material
facts”

7. Does an Offering Statement
help Raise Community
Capital?
Yes.
!! Evidence of viable business plan
!! Government review gives investors
comfort
!! Clear statement of risks up front provides
protection in the event losses incurred

8. Available for Non-profits?
Not yet.
!! Some non-profits are exempt from any
regulation
!! Ontario Non-profit Network has
proposed the co-op offering statement
regime for Ontario’s new non-profit law