1. LINK Conference Partnership Finance Chris Cook , Dunblane 19th November 2009

2. Partnership-based agreements for sharing risk and revenues 20/11/09

3. Guarantee Society and Capital Partnership 20/11/09

4. Lets look first at the Guarantee Society 20/11/09

5. In 18 European countries Guarantee Societies guarantee bank loans to members Banks 20/11/09 Guarantee Society Guarantee Loan Guarantee Members

6. ...but banks are starved of capital and have cut lending 20/11/09

7. NET uses the Guarantee Society in new ways to support any enterprise 20/11/09

8. Firstly, to support procurement..... Enterprises 20/11/09 Guarantee Society Guarantee Contract Guarantee Council

9. Secondly, to provide a mutual guarantee for credit between enterprises Buyers 20/11/09 Credit Value Sellers

10. Conventionally, sellers may give buyers interest-free credit –or time to pay Buyer 20/11/09 Credit Value Seller

11. Banks act as credit intermediaries, to provide trust through implicit guarantee 20/11/09 Bank Seller Buyer

12. Guarantee Society guarantees credit from member sellers to member buyers… Buyer 20/11/09 Pool Guarantee Guarantee Seller

13. ...with a common bond : geographical, functional, or both Buyer 20/11/09 Pool Guarantee Guarantee Seller

14. Both seller and buyer pay into a Pool for the use of the Society’s Guarantee Buyer 20/11/09 Pool Guarantee Guarantee Fee Fee Seller

15. Buyer settles credit in money, or money’s worth of Value acceptable to seller Buyer 20/11/09 Pool Guarantee Guarantee Fee Fee Value Seller

16. If a buyer defaults, Pool pays seller, and collects from buyer Buyer 20/11/09 Pool Collects Pays Seller

17. A service provider sets guarantee limits, handles defaults & manages the system Buyer 20/11/09 Pool Service Provider Services Fee Fee Guarantee Guarantee Fee Seller

18. The Guarantee Society Buyer 20/11/09 Pool Service Provider Services Fee Fee Guarantee Guarantee Fee Value Credit Seller

19. Banks act as service providers not as middlemen 20/11/09

20. Capital Partnership – direct investment in production or revenues 20/11/09

21. Conventional investment is Equity in Limited Companies 20/11/09

22. ....a 19 th Century legal dinosaur 20/11/09

23. ...or Debt - loans secured by legal claims eg mortgages 20/11/09

24. ...giving two conflicting claims over the same productive asset 20/11/09

25. But there’s a new furry animal out there.... 20/11/09

26. ...the 21 st Century UK Limited Liability Partnership (LLP) 20/11/09

27. An LLP is a corporate body with limited liability.... 20/11/09

28. ...and...errrr...that’s it!... 20/11/09

29. As far as the Tax Man is concerned it is a Partnership 20/11/09

30. Capital Partnership Capital Partnership Investors Customers Custodian % % £ 20/11/09 Managers

31. Equity Shares - % age shares in revenues or production... 20/11/09

32. ...or Units - redeemable in production 20/11/09

33. Example: “The Art of Flirting” – a film incorporated as an LLP 20/11/09

34. The actors received nth’s of the gross revenues... 20/11/09

35. ...I got 5%...and the producer the rest... 20/11/09

36. ...except that we needed lights, cameras, pizza, coffee 20/11/09

37. Two Capital Partners invested £10k for 20% of revenues 20/11/09

38. ...if there are any 20/11/09

39. Art of Flirting Partnership Art of Flirting Partnership Financial Capital (Investors) Viewers Custodian % % £ 20/11/09 Human Capital (Actors, Producer, Me)

40. Everyone was on the same side 20/11/09

41. Example: Albion Trust...a charity 20/11/09

42. ..which provides affordable office space for social enterprises 20/11/09

43. ...due to demand they bought a disused church next door 20/11/09

44. ...and planned a £4m development 20/11/09

45. But if they borrow, the rents will be unaffordable 20/11/09

46. Solution? An Albion Partnership? Albion Partnership Investors Tenants Custodian % % £ 20/11/09 Managers

47. The Capital Partnership aligns stakeholder interests.... 20/11/09

48. ...but it’s not a magic bullet 20/11/09

49. Conventional finance requires binding contracts 20/11/09

50. Partnership finance requires consensual agreement 20/11/09

51. But there may be no magnetism.. 20/11/09

52. ...or partners may fall out... 20/11/09

53. A Capital Partnership is not an Organisation 20/11/09

54. ...it does not own anything, do anything, employ anyone, or contract with anyone... 20/11/09

55. ...it is simply a framework within which the stakeholders self organise ... 20/11/09

56. A Master Partnership Master Partnership Financial Capital (Money, IP etc) Users Custodians % % £ 20/11/09 Human Capital ( Developers, Operators)

57. … .is a simple new framework for sharing resources

58. Maybe a LINK Partnership? LINK Partnership Financial Capital (Assets, IP etc) Users Custodians % % £ 20/11/09 LINK Members ( Developers, Operators)

59. Thank You 20/11/09