The journey to community ownership
In 2007, three music lovers based in Bristol – Matt Otridge, Peter Wright, and Paul Horlick – launched The Croft, a live music venue that hosts bands of all genres every night of the week. Within the first few years of operation, their neighbourhood became a popular location for its cultural offerings, and it began to gentrify rapidly. The Croft was threatened by various challenges, but most prominently by developers and rising rents.
Matt, Peter, and Paul knew that once their lease ended, they would not be able to afford the venue anymore. Even amidst the gentrification, they had never changed their business model. What they cared most about was showcasing great music for everyone to enjoy.
Understanding that they needed a sustainable, long-term solution, they made the decision to purchase a building rather than lease. In 2012, they reopened as Exchange, and in 2017, converted into a community benefit society – a non-profit entity that exists for social purpose. Exchange was already operating with a community-focused approach, so having a legal structure that fit their values just made sense.
In 2018, Exchange made the bold leap to shift to a community ownership model. The owners believed that conventional lenders were more interested in maximizing their return on investment than supporting Exchange to grow, so they turned to their community. They issued a community share offer and raised £300,000 from over 400 community members in just under two months. Individuals and institutions invested anywhere from £250 to £100,000. You can view Exchange’s community share offer document from 2018 here.
The impact of the community share offer
Exchange used funds from the community share offer to improve the venue’s sustainability and accessibility. They built new stages, improved the lighting and sound systems, and built an accessible toilet. In fact, the funds helped them become the first grassroots music venue in the United Kingdom to achieve the Gold award on the Attitude is Everything Live Events Access Charter, an accessibility award for venues in the United Kingdom. As of Feb 2023, they are also in the process of retrofitting the entire roof with solar panels!
On top of the venue’s improvements, Exchange embedded long term sustainability into the business model. With over 400 co-owners, the venue will continue to exist, even if one of the original owners decided to step away.
Exchange is a community benefit society… but what exactly does that mean?
A community benefit society is a legal, not-for-profit entity in the United Kingdom whose purpose is to serve the interests of the community. Similar legal forms are only legislated in two provinces in Canada, including British Columbia’s “Community Contribution Company” and “Benefit Company” and Nova Scotia’s “Community Interest Company”. Community benefit societies may be compared to co-operatives in Canada, however, co-operatives serve the interests of their members rather than the broader community. There are four key characteristics of a community benefit society:
- Purpose: A community benefit society’s business must be entirely for the benefit of the community
- Membership: A community benefit society issues shares for community members to invest in the business and become owners, or members. They operate on the one-member-one-vote principle which ensures equal say for all members regardless of how much they invested. No one member is granted greater rights or benefits because they invested more money into the business.
- Application of profits: Any profit generated by the community benefit society must be used for the benefit of the community. Profits cannot be distributed to its members, unlike in a co-operative.
- Use of assets: Assets must be used for the benefit of the community. There is an asset lock which means if a community benefit society is sold, for example, its assets must continue to be used for the benefit of the community rather than distributing them to members.
More Than Music
Exchange is certainly a music venue, yes, but it’s so much more than that. It’s a record shop and recording studio for local promoters and record labels. It’s a coffee shop and bar that offers sustainable, local coffee and snacks. It’s an event space for the community to host workshops, plays, flea markets, art exhibitions, conferences, and pop-up kitchens. Exchange is a pillar of its community, providing real social and cultural value.
It’s no surprise that community members rallied together to invest in Exchange’s future!
Photo credits: Exchange, www.exchangebristol.com
About this Blog Series
Hi, my name is Jasleen Bahia, and I was once an Intern at Tapestry Community Capital. I am now completing my degree in business with a focus on social finance, and I’m currently doing a semester abroad in Europe. While here, I am Tapestry’s Ambassador to the UK. This blog series documents my adventure abroad learning about the social finance ecosystem in the UK and connecting it to our growing community investment marketplace in Canada. I am eager to find out what we can learn, replicate and share!