In forming a ‘Capital Community’ (https://www.linkedin.com/pulse/creating-capital-community-karl-dakin?trk=mp-author-card), it is important to demonstrate value for becoming a member as soon as possible. The greatest value of belonging to a capital community comes from the collaboration amongst the members. However, this value takes time to build and the value is difficult to assess until the capital community has successfully supported a number of capital campaigns.
To best demonstrate immediate value, work should focus on development and publication of a ‘community capital guide’. One of the greatest gaps within the capital industry is knowing the location of all available resources. Typically, only a few capital sources are well known. These sources include banks and other businesses that widely advertise their existence. A significant number of capital sources can be identified with a little searching. Other sources are rarely known because so little information is available and little effort is made to share this knowledge.
A capital guide is a collection of knowledge about community capital sources: individuals, businesses, foundations, government programs as well as customers and stakeholders. The capital guide should include all types of capital: people, buildings, equipment, knowledge as well as money.
In designing a capital guide, a first step is to identify as many sources of capital as possible. This may be accomplished by:
- Asking members and member candidates
- Interviewing capital coaches
- Searching the Internet
- News stories
- Business organizations and events
- Sharing information with other capital communities
A search will reveal capital sources that are unique to the theme or topic of the capital community and other capital sources that may be available to everyone. Both types should be included in the community capital guide.
When capital sources are identified, members should be asked to prioritize their importance. Those of greatest importance should be included first.
A ‘community capital guide’ must be more than a directory with only contact information. It must also provide some information about who may qualify for the capital source and who may not. It is very common for any known capital source to receive a large number of applications for capital that do not meet their criteria. As an example, angel investor groups statistically reject 98% of all applications. Such a high rejection rate results in a waste of the resources of the organization seeking capital and it wastes the resources of the capital source in reviewing and rejecting the application.
A capital guide must also provide information about how to correctly submit an application. A significant percentage of capital applications are rejected because the application lacks needed information or the information is presented in a manner that the capital source cannot evaluate it.
Because the amount of information needed will vary greatly, the capital community will have to decide just how much information will be included in its capital guide. In a best case, for each capital source, the capital guide would provide all possible information in a ‘paint by number’ description of how to successfully apply for the capital. It will include examples and illustrations from actual successful applications. Each presentation of a capital source may include multiple case studies that include an introduction by a capital coach, an interview with the person who submitted the application and the actual documents used: cover letter, submission form, capital request, pitch deck, information on the organization and any projections on use of capital, activities, cash flow or other deliverables.
The capital community may provide a high level presentation within the capital guide and save the remainder with a greater level of detail for a book or workshop. Selling educational programs capital communities an additional source of revenue.
A comprehensive presentation of a capital source may not exist and need to be developed. This work may require information gathering and analysis with comparisons between different successful applications for each capital source.
The cost of development of part or all of the community capital guide may force the capital community to raise its own capital. This capital may come from sale of memberships, presentation of educational programs or sponsorships. A capital campaign may focus on a single capital source or a group of capital sources.
The formation of capital communities will the focus of ComCap Colorado, a conference that will be held on February 1, 2017, http://www.comcap.us/colorado, where local money is matched with local organizations.
Capital communities are a form of super crowd that may be key to a successful crowdfunding campaign (charity, rewards or investment). An educational program on Customer Crowdfunding will be presented by Colorado Community Capital PBC this Thursday, December 15 at Colorado Lending Source. http://www.coloradocapitalcongress.com/events.
Karl Dakin, President
Colorado Community Capital PBC