CIC Info
by Scott Thornberry - 18th May 2012
Dear All
Please see my annotated comments below:
1) The crowdcube model was 1 vote per share - so 1 vote for every £100 invested. What are the voting rights in the new model? I've seen it implied that the 1883 voting is on a pro-rata basis to amount invested. I've also seen it implied that the CIC is one vote per "member". Whilst I'm not power mad I do want to know how I could get an actual say on how the club is run (rather than giving that right to a democratically run mass of people)
DFC 1883 Limited still has the same constitution as the original crowd cube model meaning that any legal entity or individual acquiring shares in that company will be entitled to acquire up to 15% of the equity. The cap was originally designed to prevent any single owners taking control of the football club who don't have its interests at heart. In that way the more shares that are obtained the more "weight" the individual shareholder will have though it is also important to remember that as a matter of company law, 15% is essentially a minority share and there isn't much in the way of real power that would be available until a more significant shareholding was obtained. That is the beauty of the CIC which is constitutionally allowed to own anything up to 100% of the shares and could ultimately become the outright owner of the club. However, it is for fans and supporters groups to decide how they would like to work together and if they would like to work together in the CIC ultimately leveraging from their fund raising efforts by acquiring more shares in the club and ultimately more control and influence.
2) The various "investment" options mainly involve fans "gifting" their money to a supporters group or directly to the club. So does that mean that the various groups will be shareholders?
Yes they will. However, you have to have a legal personality to own shares and as such organisations like Darlo Uncovered, Tykes, DAFTS will need some support/advice in looking at the best options to introduce their investments and acquire shares if that is what they would like to do. 1883 are looking to arrange a meeting of these groups so that we can discuss all of these issues. Alternatively the funds could be allocated towards the CIC and each of the individuals behind those groups who have given funds could become legal members of the CIC entitling them to vote on CIC issues on a one member one vote basis.
3) If I gift my money to a supporters group and don't then like the way they use their vote I have no options to get my money back ... so where is the governance around how those groups run? If one group ever has a falling out with another it could turn ugly
That is correct. It is up to each group to decide how to organise itself from a voting perspective. This can range from something fairly formal like a legal document called a voting deed (where everything is set out) or informally as per Scott on Uncovered where a very clear statement has been made about how that group will be organised.
4) If I wait and invest in the CIC is that better / worse / the same as investing in one of the supporters groups? Will I get a personal vote if I invest that way?
Anyone who introduces funds to the CIC will be entitled to become a legal member of the CIC (company limited by guarantee) which will be entitled to a vote on a one member one vote basis.
5) What is the funding / organisational relationship between the CIC and 1883? Are they essentially the same beast or is the CIC the umbrella organization? Does all CIC money support the football club, or could this be diluted for other purposes?
The CIC is a community interest company and is regulated by the CIC regulator. It has to produce an annual statement to show how it has discharged its social responsibility. One of the difficulties that 1883 has in establishing the quickly is that the development of the initiatives the CIC will run as part of the overall community engagement plan is time consuming and is a project in itself. As such an original timeline was set of the end of June. As mentioned on another post, we are meeting tomorrow to talk about trying to move this forward as we clearly recognise that there is a gap which exists - namely those people who would wish to part with some funds but do not feel particularly aligned to supporters groups. Also we are looking at ways in which the CIC can be supported by direct debit monthly payers as well. The CIC is required to retain some of its funding to discharge its social obligations. However, it is likely that there will be a symbiotic relationship between the CIC and the football club such that it will be possible for the CIC to "pay for" the staff used from the football club to run projects or introduce funds on a commercial basis to the football club etc.
I hope this helps.
2) The various "investment" options mainly involve fans "gifting" their money to a supporters group or directly to the club. So does that mean that the various groups will be shareholders?
Yes they will. However, you have to have a legal personality to own shares and as such organisations like Darlo Uncovered, Tykes, DAFTS will need some support/advice in looking at the best options to introduce their investments and acquire shares if that is what they would like to do. 1883 are looking to arrange a meeting of these groups so that we can discuss all of these issues. Alternatively the funds could be allocated towards the CIC and each of the individuals behind those groups who have given funds could become legal members of the CIC entitling them to vote on CIC issues on a one member one vote basis.
3) If I gift my money to a supporters group and don't then like the way they use their vote I have no options to get my money back ... so where is the governance around how those groups run? If one group ever has a falling out with another it could turn ugly
That is correct. It is up to each group to decide how to organise itself from a voting perspective. This can range from something fairly formal like a legal document called a voting deed (where everything is set out) or informally as per Scott on Uncovered where a very clear statement has been made about how that group will be organised.
4) If I wait and invest in the CIC is that better / worse / the same as investing in one of the supporters groups? Will I get a personal vote if I invest that way?
Anyone who introduces funds to the CIC will be entitled to become a legal member of the CIC (company limited by guarantee) which will be entitled to a vote on a one member one vote basis.
5) What is the funding / organisational relationship between the CIC and 1883? Are they essentially the same beast or is the CIC the umbrella organization? Does all CIC money support the football club, or could this be diluted for other purposes?
The CIC is a community interest company and is regulated by the CIC regulator. It has to produce an annual statement to show how it has discharged its social responsibility. One of the difficulties that 1883 has in establishing the quickly is that the development of the initiatives the CIC will run as part of the overall community engagement plan is time consuming and is a project in itself. As such an original timeline was set of the end of June. As mentioned on another post, we are meeting tomorrow to talk about trying to move this forward as we clearly recognise that there is a gap which exists - namely those people who would wish to part with some funds but do not feel particularly aligned to supporters groups. Also we are looking at ways in which the CIC can be supported by direct debit monthly payers as well. The CIC is required to retain some of its funding to discharge its social obligations. However, it is likely that there will be a symbiotic relationship between the CIC and the football club such that it will be possible for the CIC to "pay for" the staff used from the football club to run projects or introduce funds on a commercial basis to the football club etc.
I hope this helps.