AUGUST 2018

HOW TO MARKET
COMMUNITY SHARE ISSUES?
INSIGHT FROM TRIODOS
By Miles Hadfield
Crowdfunding and community share offers
are becoming more important as sources of
finance, fuelled by the rise of social media and
new ideas around the sharing economy.
But these offers do not work unless the
message goes out – which has given rise to
a series of marketing initiatives which range
from widespread social media campaigns to
targeted messages to established investors.
Among the organisations leading the way on
community share offers is sustainable banking
specialist Triodos, which earlier this year
launched a UK crowdfunding platform.
Triodos has also just launched a £4m bond
issue for Burnham and Weston Energy, one of
the largest community-owned solar farms in
the UK.
Whitni Thomas, senior investor relations
manager at Triodos, says the first step to
successfully marketing an offer is to consider
the organisation itself. “We spend from
18 months to two years working with an
organisation – getting to know them and
understanding their business model.”
The first question is whether or not repayable
capital is an appropriate model – and if so, who
are the best investors?
“What we find more and more is that we are able to find offers that
are suitable to ordinary investors,” she says. “We’ve been raising capital
from professional investors, or everyday mainstream investors, for over a
decade now. And at the end of January we have made all our investment
opportunities available through our crowdfunding programme.”
Triodos has worked with some community benefit societies and
community interest companies, and in 2015 helped Chelwood Community
Energy in a multi-million pound fundraiser. It is now experimenting with a
new model for community energy. Instead of structuring as a community
benefit society using withdrawable shares, Triodos suggests structuring
the investment as a long-term bond – which is eligible for an innovative
fi n a n c eI S A .
This can hold peer-to-peer loans and crowdfunded securities, and
allows HMRC and the Treasury to recognise this method of channelling
funds to SMEs. And it enables savers and investors to put the bond in an
ISA, says Whitni. The risks mean the investment would not be suitable for
a traditional stocks and shares ISA.
Such methods make bonds more attractive to investors, an important
consideration when marketing an offer. But for a sustainable bank seeking
ethical investors, there are other considerations.
“For community-owned energy, the project must repay investors but
we also want to make sure a meaningful amount of benefit is derived for
the community,” says Whitni.
In terms of selecting a marketing approach, it depends on how
much a needs to be raised, “Renewable energy tends to be a
multi-million pound proposition and that is why these companies
come to us. They recognise they can’t raise that just through the
Below and right: Bonds are available for the solar farm operated by Burnham and Weston
46 | AUGUST 2018