Thinking about buying an asset or club? Taking ownership of an asset is an arduous process which involves a lot of background work. Here are some steps you will want to consider before you think the deal can be completed.
1: Understand the appetite
Consult with core supporters seeking support for community ownership
Method – Survey Supporters, Open Meetings
Note: don’t get obsessed with the figure pledged, it’s the ‘appetite that is important’ – pledges are just that, others will back the scheme; some will be waiting for more detail
2: Pre share offer
Get money in the bank to show firmer commitment for community ownership
Method – Pre share offer document
Unless negotiations are at a developed stage and a price has been agreed to buy the Club then a pre share offer document should be circulated asking for money to be paid into a secure holding account.
This could be the full amount or a deposit to show commitment beyond a pledge.
Note: this is about showing you are serious to other potential backers/the administrator, but money should remain in the holding account until you are ready to provide a detailed share offer document.
3: Full offer document
Time to lay everything out to investors including terms of their investment
Method – Offer document
– a price has been agreed
– your due diligence is completed
– you know the target figure you need to raise to purchase the Club
– you have a figure to provide enough working capital to fit with the budget
You can release a full offer document including financial projections for how the Club will operate. If it’s not 100% control, heads of terms/shareholders agreement should be in place to protect the position of community ownership and your investment.
You need to seek permission of those who already hold money in the holding account and invite others to deposit money to meet the target.
4: Buy the club
Do the deal which will give the CBS at least a majority shareholding if not full ownership.
Method – Convert the deposited money into Community Shares in the CBS.
Use the money to purchase the Club and provide sufficient working capital.
Time to send out share certificates to investors and make them aware of any other benefits they are entitled to.
Club Development Scotland can assist with the process of transferring both clubs and facilities into community ownership. Why not pick up the phone so we can guide you through this process? We can provide support at every stage of the process.