We believe that a good business strategy starts with a good idea, and not always risk and reward. This is not to say that we do not access the risk in every theoretical situation, BUT good ideas are what mostly build the foundation to sound business principles. Starting out with a great idea has allowed us to partner with some of the greatest minds which we could have never in a million years been able to encounter without putting forth “idea-driven” business principles. Using a risk-to-reward rationale like many “institutional” investors do today is the main reason why the global business environment continues to take major hits. And why financial crises continue to be the norm around the world today. Institutions today make decisions based on what they feel rather than what is fair.
Ideas Vs Risk-reward Strategies
In 2012, two years before the Ebola crisis which occurred in West Africa, we were looking at Lagos, Nigeria, which was literally at the time the third largest city in the world next to Shanghai, China, and New Delhi, India. Lagos was reaching 17 million residents and growing (Today it’s population has ballooned to 21 million) and we were researching the possibility of doing a feasibility study to build local clinics and research labs because of the condensed and tightly compact communities sprawling in the region. This was a great idea we tried to sell to local politicians and local banks, with long-term, highly-critical data that would benefit the U.S., and Europe too. But we were saddened to learn that “macho” U.S. politics, which pretends to protect citizens instead of global communities, back then led to key African countries being blocked from dealing with the US. Also, American investors continued to re-enforced the belief that the risk-reward of trying to invest in Africa was hopeless, and pretty much too risky. BUT as a company, we knew way better.
In December, 2019, just 7 years later, the Coronavirus brought the international community to its knees, and to a literal standstill. It was so devastating that today nobody even remembers what Ebola was anymore. So devastating that the roles reversed, and Africa in turn had to bar the U.S., and Europe, for a brief period of time from entering the continent. Today, the global financial community has slowly crept back into investing in Africa, and the investment world is taking a second look at Africa. But we knew better because our interaction with African communities, and businesses, in the past had revealed that Africa has the youngest population on the planet (The average African citizen is between 18-21 years old) so investments going into that region had a higher probability of providing more stable returns in the long-run. This is unlike the United States where the population is aging, and young Americans are riddled with over 1.4 trillion dollars in college debt.
How Do We Raise Capital
Unlike investment banks and private equity firms, which use the most outdated strategies to raise capital, by soliciting investors and risking all of the investors’ capital, which is extremely risky and highly inefficient, we work with global capital partners who share our vision of investing in creating a better world. Not investing to make a handful of elites shamelessly rich to the point where they literally begin to lose touch with reality, and continue to form investment habits that literally destabilize impoverished communities. This is why people like Bill Gates, Elon Musk, Mark Zuckerberg, and Jeff Bezos have become the one-percent class (1%), and are wiping out the millionaire-class, creating what we now know as the “one-percents”. Often they are being paraded as “Rock-stars” by the major media companies they buyout for clout, simply because they have nothing better to do with all their money (Elon Musk spends more time dreaming about going to Mars than creating feasible technology).
Through creating symbiotic and organic partnerships, we are only required to provide 5-10% of funds for the total amount of investment capital we need for an investment project, or investment acquisition. Thereby greatly reducing the risk to our investors capital. For example, if we negotiate to buy a 50-unit apartment building in Chicago for $3,000,000, and renovation to the building is approximately $600,000 total acquisition cost will be $3,00,000 + $600,000 = $3,600,000 (overall $3,6m). Our investment capital to acquire this asset into our portfolio would be approximately 5-10%, or $180,000 – $300,000.
If we want to develop a 100-MW sustainable wind farm in Nigeria, with a total development cost of $120,000,000. Our capital cost to develop the project would be $120,000,000 x 0.5 = $6,000,000. Or 120,000,000 x .10 = $12,000,000. Our passion to transform communities into thriving Eco-systems where people grow and thrive has gotten us into places were even the most sophisticated institutions would probably not even get an invite. This lets us know that the business world is looking for a new direction, and ready to chart a new course in doing global business.