A unique strategy for the formation of a pooled fund to finance social ventures in the collaborative infrastructure space OpenKollab Pooled Fund

Vision and Context Historical Inflection Point Global challenges (climate change, economic inequity...) Failure of existing institutional framework (unfettered capitalism, global institutions...) Evolution of collaboration infrastructure (broadband penetration, P2P infrastructure...) Something went wrong with the way that traditional organizations were formed. We need to think outside the box about what types of organizations to build!

The Problem Existing capital markets frameworks deploy capital only towards organizations that are purely financially motivated.

The Chain of Assumptions Unencumbered financial markets deploy capital most efficiently Efficient deployment of capital will lead to maximal economic growth Economic Growth can be equated with human well being Can you spot the false assumption?

The Solution Deploy capital on organizations that are not only financially motivated... They also have a social mission!

But, that raises a problem... How do investors make money?

The Solution... In principle... Find projects that are both: Financially sustainable AND Have a social mission Find investors that: Are seeking investments that have a social focus Can tolerate non-market rate returns Utilize an investment structure that mitigates risks for investors

First... A picture of the current landscape Charities/ Not For Profits For Profit Companies -100% rate of return Traditional market rate returns NOTHING!! Socially Motivated Financially Motivated NOTHING!!

So what is needed is... Charities/ Not For Profits For Profit Companies -100% rate of return Traditional market rate returns Social Ventures Socially Motivated Financially Motivated Social Investors looking for Social AND Financial Returns Deliver Social AND Financial Returns

So what do social investors expect? Clearly Defined Social Mission: first and foremost, social investors are looking for organizations that are lead by visionary entrepreneurs with a clear vision of how they want to transform the world for the better! Measureable Social Mission: It is not enough just to have a vision of how you will change the world. You will also need to be able to clearly articulate the path in a way that is measurable! Some Financial Return: We will be looking for investors who will provide loans at better rates than you could get at the bank. They will, however, expect these loans to be repaid!

One Specific Contribution – OK Pooled Fund! A pool of capital that is managed by a third party – OK Pool Fund Management Team Invest in social mission driven organizations that are financially sustainable Investors contribute to the pool and own a `pro-rata` share of the pool Certain unique characteristics differentiate fund from other pooled funds.

Project 1Project 2Project 3Project 4Project 5 Investor 1Investor 2Investor 3 OpenKollab Pooled Fund

So what makes this fund unique? Investment Focus: Collaboration Infrastructure Collaboration tools Collaboration services Projects that are collaborating AND

So what makes this fund unique Project Synergy: we will identify projects that have synergy in the following ways: Common missions Complementary needs or resources Common markets or clients Common technology infrastructure Common processes Mutual Accountability: we will develop mutual accountability mechanisms that parallel the Grameen Peer Lending model. Specific Collaboration Processes

Pooled Fund Details Overall Size: $2 million Candidate Investments Seed stage social ventures Clearly defined social mission Can achieve financial sustainability within 12 months Two Investment Stages Seed Stage: $50 - $100,000 2 nd Stage: $250 - $350,000 depending on satisfaction of milestones

Pooled Fund Details Investment Structure Given the fact that our portfolio companies will not be strictly financially motivated, we do not expect that we will be able to raise funds for equity financing. We expect to raise investment capital for the following: Debt (below market rate) Debt (below market rate) with option to convert to equity Debt with royalty payments tied to profitability

So why will this work Social cohesion between projects Why does the Grameen Peer Lending Model work Social cohesion within the Lending Circle – all part of the same community OK Pooled Fund Investment Groups are, by definition, groups of projects that have synergy We hope to identify projects that have existing relationships that give have given rise to social cohesion.

Execution Strategy Identify Investment Candidates: The first step in the process is for us to identify 5 or 6 investable projects. Solicit candidate investments – cast net widely Develop shortlist of candidates Identify initial Funding Group Engage in collaborative processes, discussions etc to assess synergy amongst projects Modify Funding Group as necessary. Collaborate With Funders: Due to the nascent stage of the market as well as the innovative nature of the pooled fund that we are creating, we hope to engage prospective investors in the process as early as possible.