Burgess COMMENTARY

Peter Burgess

ABOUT US

In implementing its model, Imperative aspires to become the most efficient Fund/Company working to bring communities out of poverty, without being dependent on local, central or federal government’s support. Further, Imperative envisions becoming an outsourcing alternative for governments in their strive to provide access to all the goods and services required to mobilize a community to its next level of social and economic development and environmental sustainability.

By harnessing today’s financial and technological innovation within an open market economy, Imperative’s framework eliminates the association between low-income and poverty.

Through a private fund investment strategy built on rigorous bylaws, algorithmic computation and sociological analysis, Imperative bundles social enterprises to deliver a suite of goods and services tailored to the needs of each community.

Imperative is comprised of a multi-disciplinary team that includes academics, financial industry practitioners and social entrepreneurs with an aggregated 30+ years of experience in the social investment sector.​

FOR INVESTORS

Fund’s Objective

Imperative’s founders developed a revolutionary investment model that can:

– Sustainably lift an entire community out of poverty by addressing and fulfilling most or all of their basic needs for goods and services, elevating the entire community to its next level of social development and environmental sustainability.

– Accomplishing this transformation in two years or less.

– Doing so under a strict financially sustainable framework that, in return, allows for the replication of the model in as many low-income communities as can benefit from it.

Business Model

Imperative identifies the most successful Social Enterprises (SEs) addressing needs for basic goods and services such as structural housing, Internet connectivity, clean water, renewable energy, low-cost basic family basket, affordable healthcare, and waste management. Each SE must have a proven track record, positive financial results in the previous two-to-five years, and provide goods and services that complement what other SEs provide.

Based on a thorough analysis to understand the needs of each community, and tailored to address most -if not all- existing deficiencies, Imperative bundles together the ideal group of SEs. The implementation of each good or service follows a specific strategy aimed to achieve a smooth transition for the community to its next level of social and economic development and environmental sustainability, in two years or less of implementation, and five years or less of financing.

Imperative provides the operational capital for the SEs. They in turn finance access to their goods and services for the entire community. The capital is provided to the SEs in the form of convertible debt, where Imperative reserves the right to convert the debt to equity in these companies (SEs).

Sectors

Depending on the selected communities and their specific needs for goods and services, we identify the sectors for investment that fulfill most -or all- of the communities’ requirements, including -but not limited to- housing, internet and telecommunications, clean water, renewable energy, healthcare, food cost reduction, and waste management.

Invest With Us

1. We leverage the innovations of the open market economy to sustainable (i.e. in the long run) assist in mobilizing entire communities out of poverty.

2. Our investments have a maximum term of six (6) years (72 months) from the fund’s initial closing (subject to a 1-year extension). The implementation time-frame of all services in a community can vary between 18 and 24 months, and total repayment of the invested funds for Investors is structured under a maximum 60-month repayment schedule, with quarterly repayments starting on month 19.

Portfolio Construction:

• a. Investment Technique: 100% Primary Funds

• b. Strategy: Impact Investing/Convertible Debt

• c. Geography: Emerging/Frontier Markets

• d. Targeted Impact: Poverty Elimination/Social Mobility/Environmental Sustainability

3. Annual Management Fee* (Asset Management Charge): 2%

4. Return for Investors and Carried Interest: 5% preferred return for Investors, compounded annually, after Management Fee; above preferred, 80% to Imperative (catch-up) until accruing 2% carried interest and 20% to Investors; all additional returns at 80% to Investors and 20% to Imperative.

*Investment objectives and targets may not be realized and cannot be guaranteed. The description above is a summary of certain terms and is not intended to be complete.

http://imperativefund.com/projects/

LIFTING OUT OF POVERTY

Imperative mobilizes communities to their next level of social and economic development and environmental sustainability.

Housing We start by replacing shanty homes with structural housing, sourcing local eco-friendly materials. The community is trained and paid to build their own houses and those of their neighbors, thus generating economic spillover.

Internet We then build an efficient decentralized wireless mesh network that allows the entire community to share a single robust broadband connection. The cost is split between everyone, resulting in a marginal cost per household.

Poverty Tax Elimination We eliminate “poverty tax”: the surcharge paid by poor people who can only purchase in small quantities. The basic basket cost is reduced by up to 30% by cutting middlemen employing reusable containers that eliminate packaging costs and waste.

Healthcare We provide quality healthcare through a micro-insurance model that negotiates plans from insurance underwriters at highly discounted rates, by partnering with locally present corporations to piggyback on their large beneficiary pools.

Clean Water We provide small storeowners with water filtering systems that enable them to sell clean water at much lower prices than commercial purified water, eliminating the need and cost of people having to commute to access clean water.

Solar Power We provide electricity to remote communities that do not have access to electric power, reducing diesel and candle consumption, which has a negative impact on people’s health and the environment. Waste Management We eliminate landfills by teaching the community that trash can be a source of income, separating organic waste from recyclable materials and sorting them to be sold to recycling plants. Organic waste is converted into 100% organic fertilizer. Community Our work is customized to fulfill the needs expressed by each particular community, giving them ownership of the solutions, training and empowering them to maintain the infrastructure. However, we remain connected to address future needs.