Four days after its first public invitations for founding members, the Creston & District Community Investment Co-op already has 40 members, $20,000 in membership shares, and commitments for $156,000 worth of investment shares.
“We are thrilled with the response. The co-op has clearly struck a chord with people in our community,” Eden Yesh said on Monday. Yesh, branch manager of Kootenay Employment Services’ Invermere office, has been co-ordinating a plan to encourage local investment into local businesses for three years.
After exploring countless variations of community investment models, he and a small team (KES executive director Hugh Grant and development services facilitator Laura Francis) recruited 20 local stakeholders and worked to get all the necessary paperwork in place before taking the plan to the public.
In two presentations at the Ramada last Wednesday, more than 150 people arrived for Yesh’s presentation. They also heard, live via video feed, from Dan Ohler, who spoke about the experience in Sangudo AB, a hamlet with a population of 380. Since 2010, a similar investment structure has invested nearly $750,000 of local capital into its local business and projects.
“The intent of SODC (Sangudo Community Co-op Association) was not to own and manage a business as most co-ops do,” Ohler said. “Instead, it’s a business incubator: a vehicle to invite, encourage, and support entrepreneurs to run their own businesses in Sangudo, live and raise families here, and employ their neighbours and other residents.”
As in Sangudo, the CDCI Co-op is not designed to own businesses. It will entertain business loan applications, vetting the applicant and ensuring a solid business plan is in place. Where amounts larger than $25,000 are needed, it will seek partnerships with Creston & District Credit Union and/or Community Futures.
Perhaps more importantly, the co-op can also offer mentorship and support, and an instant connection with up to 150 local investors who have a vested interest in their success.
Under current rules, CDCI Co-op can only have 150 members/investors and those individuals can only invest up to $4,500 each, over and above their initial $500 one-time, redeemable membership fee.
“The business model ensures that no individuals have huge investments, and it restricts the total membership of related parties to 10 per cent,” Yesh said.
Investors can purchase up to three $1,500 investment shares, which are Registered Retirement Savings Plan eligible. The money can be transferred from existing RRSPs or tax-free savings accounts, or it can be a new investment.
The current four-person executive — Kootenay Employment Services’ Hugh Grant, Community Futures’ Alison Bjorkman, Creston-Kootenay Foundation’s Ted Hutchinson, and retired accountant Terry Bambrick—will also serve as the loans committee until an annual general meeting is held in the spring, at which time co-op members can run for various positions. There are also volunteer committee opportunities.
“The co-op will be member-run,” Yesh said. “Members will decide how it should operate, within the existing rules. Co-ops around the world are known for their democratic governance, as it’s always one-member, one-vote.”
This has been a real group effort, with support from the Town of Creston and RDCK areas A, B and C – as well as funding and advisory services from SIBAC, an economic development organization of all local governments in Southeastern BC.
The deadline to become a founding member has been extended until December 15, 2016. Under securities law, only founding members of the co-op can invest in the first 12 months. All additional members will need to wait out the 12 month period before being eligible to purchase their investment shares. Investment shares will be offered in January to founding members, in time to make them RRSP eligible for the 2016 tax year.
For more information on how to invest in the places you work, play and live, call Kootenay Employment Services or visit the web site at www.communityinvestmentcoop.ca.