Growth Strategies Webinar

Copyright © 2015 Charter School Capital, Inc. All Rights Reserved.

Building a

Growth Strategy

for Your

Charter School

Webinar

February 18, 2015


Welcome

3Copyright © 2015 Charter School Capital, Inc. All Rights Reserved.

PANELISTS

Marshall Emerson

Co-Founder and CEO, I CAN Schools

Stuart Ellis

President & CEO, Charter School Capital


GROWTH STRATEGY

• Charter school growth stages

• Challenges school operators face at each stage

• Best practices and takeaways

What we’ll cover


Focused on Charter Schools


WHAT WE DO

• Working and growth capital

– Attendance-based funding

– Receivables purchase model

• Facilities financing

– Expansion and new development

– Relocation and refinancing

– Newly funded $500 million capital pool

• Resource development

– Matching clients with grant, entitlement and philanthropic funds

Provide charter schools access to funding


WHO WE ARE

100% dedicated to charter schools

• Specialty finance company empowering charter school growth

• Headquartered in Portland, Oregon

• Began funding charter schools in California in 2007

• More than $800M of funding provided to date

• Team of 40+ professionals dedicated to delivering timely and flexible solutions

• Relationships with 450+ charter schools serving more than 450,000 students

• Stellar track record with schools and investors


WHERE WE ARE

400

5

519,000

1,130

184,400

605

44,100

149

253,245

280239,996

625

141,204

297

119,533

400

130,842

176

Working Capital +

Facilities

# Students

# Schools

99,328

197

91,813

233

69,392

110

58,933

127

63,175

14554,906

95

58,691

117

47,689

245

35,353

81

31,743

87

34,347

75

29,718

124

19,439

38

22,384

59

19,409

47

21,911

95

26,022

34

16,051

39

10,370

21

10,398

33

15,533

7116,137

25

2,446

11

7,131

18

2,133

19

725

6

315

3

382

4

5,980

27

6,215

19

Anticipated

Working Capital

Facilities

TB

D

31

21,397

52

35,000

57


Stages of Growth


STAGES OF GROWTH

# of

Students

Start-up

Survival/Establish

Growth

Flexibility/Stability

Sustainable Maturity

Efficiency

Time

(years)

0 2-3 5-10

100%

Students as

a % of

mature

targets

10-25% 25-90% 90-100%


CHALLENGES

Reasons for charter school closures

42%

24%

19%

6%

5%4%

Financial

Mismanagement

Academic

Authorizer Obstacles

Facilities

Other

Source: The State of Charter Schools,

The Center For Education Reform, December 2011


STAGES OF GROWTH

Strategic approach

Start-up Growth Sustainability

Financing

Facilities

Community

involvement

Academic

accountability

Operational

support


STAGES OF GROWTH

Strategic approach


Financing Any liquidity

Facilities In target locale

Community

involvement

Awareness

Academic

accountability

Establish program

Operational

support

Outside experts


STAGES OF GROWTH

Strategic approach


Financing Any liquidity Flexibility/scalabil

ity

Facilities In target locale Modular

Community

involvement

Awareness Fulfill the promise

Academic

accountability

Establish program Measure program

Operational

support

Outside experts Transitional

resources


STAGES OF GROWTH

Strategic approach



ity

Cost

Facilities In target locale Modular Curb appeal/cost

Community

involvement

Awareness Fulfill the promise Fabric of

community

Academic

accountability

Establish program Measure program Continuous

improvement

Operational

support


resources

In-house team


STAGES OF GROWTH

Strategic approach



ity

Cost


Community

involvement


community

Academic

accountability


improvement

Operational

support


resources

In-house team


STAGES OF GROWTH

• Different structures of working capital

– Receivable sale

– Term loan

– Line of credit

• Facilities financing options

– Lease option

– Bond

– Traditional bank loan

• Regarding costs of funds, all costs are NOT created equal

– Evaluate total $ cost rather than % rate

– Consider fixed transactional costs and penalties, in addition to annual rate

related to costs

Finance considerations


The Start-up Phase


STAGES OF GROWTH

Start-up

The Challenges

Finding good leadership and teachers

Securing resources

Finding suitable facilities

Healthy enrollment

Sustaining high performance as network expands


STAGES OF GROWTH

Start-up

Best Practices

Study and meet with schools doing things well

Don’t be a master of everything. Master a few things and do them really well

Build genuine and robust relationship with teachers, leaders, vendors, and external

constituents

Pay close attention to the budget

Pay even closer attention to student progress data

Do not waiver in your belief or mission


The Growth Phase


STAGES OF GROWTH

Growth

Common Misperceptions

“After the 3rd year, all will be in place and it’s smooth sailing!”

Performance and accountability requirements will be stagnant

Done with professional development

No need to change routines or systems

We’ll have sufficient funds from operating revenue to support expansion

Facility upgrades will be minimal, if at all


STAGES OF GROWTH

Growth

The Challenges

Maintaining high expectations and being flexible

Advancing levels of student performance

Managing growth with limited resources

Upgrading systems to support growth

Retaining quality teachers and leaders

Matching capital to operational needs


STAGES OF GROWTH

Growth

Best Practices

Continuous professional development and leadership training

Build on the culture

Focus on individualized instruction and data analysis

Increase visibility in the movement

25Copyright © 2013 Charter School Capital, Inc.


The Sustainable Maturity Phase


STAGES OF GROWTH

Sustainable maturity

Common Misperceptions

With growth, comes distance

Time to cash in

Challenges decrease as you scale


STAGES OF GROWTH


The Challenges

Developing and executing a sustainable strategic plan

Anticipate challenges

Identify aspiration – mission, vision, core values, SWOT

Right team to implement strategic vision and plan

Reevaluate financing to match your needs


STAGES OF GROWTH


Best Practices

Define your objectives clearly and communicate them extensively both internally and

externally

Celebrate your successes and analyze your failures

Develop data-driven culture and make sure you retain the passion that got you

started

Take what you do seriously with out taking yourself too seriously

Develop pillars that define what you do

Assess performance regularly and use assessment to improve


Recap


STAGES OF GROWTH

Recap



ity

Cost


Community

involvement


community

Academic

accountability


improvement

Operational

support


resources

In-house team


STAGES OF GROWTH

Key takeaways

• Stages in charter school lifecycle present very different challenges

• Strategy and focus needs to vary significantly as you grow

• Leverage experts at every stage to allow you to focus on educating kids

• Financial analysis illuminates positive potential impact of growth and scale


Questions?


Thank YouPresentation available at:

SlideShare.net/CharterSchoolCapital

Marshall Emerson, I CAN Schools

[email protected]

Stuart Ellis, Charter School Capital

[email protected]

877-272-1001