I reckon CICs limited-by-shares are a good idea that potentially offer exciting opportunities for social enterprises to generate finance by selling equity. As far as I know, so far, not many of them are being set-up (as opposed to quite a lot of CICs limited-by-guarantee) and not many of those are managing to sell many shares.
My suggestion is the lobby should be asking the government to come up with some way of encouraging ordinary people – as opposed to very rich people or people running investment funds – to put cash into social enterprises.
My thought is that, given that the government guarantees your £50K worth of deposits in a bank, it might be also able to guarantee your first £10k or £20K worth of investment in a social enterprise (providing that enterprise met a series of conditions that prevent the state subsidising rank incompetence or scammery).
I don’t claim to be an expert in this sort of thing so I completely accept that a government guarantee might not necessarily be a practical idea but I’m sure there are possibilities for coming up with something that fulfils a similar function – allowing people to choose to invest some of their savings in a social enterprise, while somehow reducing the risk taken in doing so.
I wonder if anyone who does know what they’re talking about has thoughts on this?