AQAL Investing: The Future of Venture Capital Investing Dr.Bozesan
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A proven model for early stage investing

A proven model for early stage investing

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    AQAL Investing: The Future of Venture Capital Investing Dr.Bozesan AQAL Investing: The Future of Venture Capital Investing Dr.Bozesan Presentation Transcript

    • AQAL  INVESTING:  AN  INTEGRAL  APPROACH  TO     THE  FUTURE  OF  INVESTING   Unleashing  the  Power  of  Current  Trends  for  the  Benefit  of  All         Mariana  Bozesan,  PhD   Club  of  Rome,  full  intl. member   Founder  &  General  Manager,  AQAL  Capital  GmbH,  Munich   Senior  Research  Fellow,  Humboldt-­‐Viadrina  School  of  Governance,  Berlin     February  11th,  2014    ©  2014  AQAL  Capital.  Strictly  Confiden:al.    
    • OUTCOMES  TODAY   Demys:fying  the  landscape  of  rather  confused  investors   Understanding  the  hidden  determinants,  context,  and  trends   Unleashing  the  power  of  the  integral  model  for  the  benefit  of  all     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           1  
    • OUTCOMES  TODAY   Demys:fying  the  landscape  of  rather  confused  investors   Understanding  the  hidden  determinants,  context,  and  trends   Unleashing  the  power  of  the  integral  model  for  the  benefit  of  all     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           2  
    • Lehman,  Fukushima,  Madoff,  Libor,     Climate  Change,  Debt  Crisis…       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           3  
    • …  lead  to  wealth  owners’  sinking   confidence  in  ins:tu:onal  investors*   *Source:  BCG  Report,  Regaining  Lost  Ground:  Resurgent  markets  and  new  opportuni5es.  Becerra  et  al.2010.     *Source:  BCG  Report,  Regaining  Lost  Ground:  Resurgent  markets  and  new  opportuni5es.  Becerra  et  al.2010.   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.             4  
    • >=  10%  of  High  Net-­‐Worth  Individuals   want  sustainability  in  both  financial     terms  and  impact,  but  cannot  get  it       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           5  
    • ….  because  innova:ve  financial     products  that  can  fulfill  their  needs     are  missing  at  large  scale     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           6  
    • THUS,  MANY  HNWI  ARE  BYPASSING  INSTITUTIONS     Seeking  alterna:ves  to  tradi:onal  fund  products,  oden  sobered  by  weaker  than  expected  performance   Wealth  owners  are  self-­‐organizing:     AVIVA  Corporate  Sustainability  Coali:on  ($2  trillion)     Request  to  UN  member  states  to  adhere  and  develop  regula:ons  for  global  framework  on  corporate  sustainability   repor:ng   Intl.  policy  framework  for  company  disclosure,  transparency,  accountability,  responsibility,  incen:ves   Interna:onal  Integrated  Repor:ng  Commiiee  (IIRC)   Interna:onal  Stock  Exchange  Ini:a:ve:  RIO+20   Reques:ng  sustainability  lis:ng  rules;  >  43%  of  all  stock  exchanges  worldwide  adhered  to  them  already   Natural  Capital  Declara:on   Commitment  of  the  financial  sector  toward  the  integra:on  of  natural  capital  (earth’s  assets  &  ecosystem  services)   criteria  into  financial  products  and  services   Sustainable  Capitalism  Manifesto  –  Al  Gore  &  David  Blood   Global  Repor:ng  Ini:a:ve  (GRI):  Sustainable  Repor:ng  Guidelines  G4   The  Giving  Pledge:  >  50  Billionaires  star:ng  with  Warren  Buffet,  Bill  &  Melinda  Gates,  R.  Branson,  etc.   GIIN/IRIS  by  The  Rockefeller  Founda:on   Self-­‐organizing  family  offices  including  PYMWYMIC,  AQAL  Inves:ng,  RDS  Capital,  TONIIC   Impact  Inves:ng  is  oden  missed  by  ins:tu:onal  investors  (only  5%  use  it)  vs.  10%  of  HNWI*     The  B  Corp  Declara:on  &  the  Conscious  Capitalism  Movement  incl.  GIIRS   *Source:  J.  P.  Morgan  &  GIIN  Report:  Insight  into  the  Impact  Investment  Market.   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           December  14,  2011         7    
    • ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           8  
    • GLOBAL  ALLIANCE  FOR  BANKING  ON  VALUES  REPORT*   with  total  assets  exceeding  $60   billion  has     Eliminated  the  myth  about   lower  returns  through   sustainability   Beier  returns  on  assets  than   regular  banks   Significantly  higher  levels  of   growth  in  loans  and  deposits   Higher  and  beier  quality  of   capital   Revealed  that  sustainable   banks  are  more  robust  and   resilient  than  tradi:onal  ones     GSIFI=Global  Systemically  Important  Financial   Ins:tu:ons     *Source: GABV. (2012, March). Global alliance for banking on values: Strong, straight forward, and sustainable banking. Financial capital and impact metrics of value based banking. Full report. March 2012. Downloaded May 15, 2013 from http://www.gabv.org/wp-content/uploads/Full-Report-GABV-v9d.pdf   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.            9  
    • TRADITIONAL  INVESTING  IS  CHALLENGED*     Financial  crisis  lead  to  fear  and  uncertainty   TRADITIONAL   INVESTING   Falling  revenue  and  margins   Massive  capital  migra:on   Profit  Metrics   Frustrated  wealth  owners  losing  trust  in  their  asset  managers   Alterna:ve  and  customized  inves:ng  are  on  the  rise   Tradi:onal  inves:ng  oden  focused  on  short-­‐term  profit  maximiza:on   at  the  expense  of  long-­‐term  health  of  global  community,  culture,   environment,  ethics,  and  overall  human  happiness   Tradi:onal  investment  metrics  oden  missed  sustainable,  :me-­‐based   businesses  and  responsible  investment  opportuni:es   Many  tradi:onal  asset  managers  failed  to  develop  a  core  competency   in  alterna:ve  inves:ng  opportuni:es  including  impact  inves:ng  (SRI/ RI/ESG)   e.g.       WALL  STREET   BERKSHIRE-­‐ HATHAWAY   KKR   SEQUOIA  CAPITAL         Profit     *Source:  Mulcahy, D. & Weeks, B. & Bradley, H. S., (2012, May). We have met the enemy …. And he is us: Lessons learned from twenty years of the Kauffman Foundation’s investments in venture capital funds and the triumph of hope over experience. Kauffman Foundation Research   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           10    
    • ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           11  
    • Impact  Inves:ng  is  growing     but  it  is  fragmented     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           12  
    • IMPACT  INVESTING  IS  FRAGMENTED     IN  TERMS  OF  MOTIVES  AND  APPROACH   Two  types  of  Investors*   Financial  (Profit)  First  Investors     Pursue  the  op:miza:on  of  financial  returns  before   having  an  impact  floor     Investors  “are  not  willing  to  accept  lower  than  market   returns  as  a  cost  to  op:mizing  social  or  environmental   goods,  although  they  s:ll  make  a  posi:ve  impact”     Impact  (People/Planet)  First  Investors     Seek  to  op:mize  social  and  environmental  impact  with   a  financial  floor   For  greater  impact,  investors  are  willing  to  accept   lower  than  market  financial  returns     IMPACT     INVESTING   Sustainability  Metrics:   ESG   e.g.   GRAMEEN  BANK   TRIODOS  BANK   GLS  BANK   BANK  SARASIN   Triple  BoAom  Line         Planet     People   Profit   *Defini:on  ader  (Eurosif,  2010,  p.  7)   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           13  
    • GLOBAL  SUSTAINABLE  INVESTING  (SRI/RI)  IS  GROWING*   Global  Sustainable  Investments  using  some  kind  of  ESG  criteria  reached   US$  13.6  trillion  (=21.8  %  of  total  AuM  in  2012)     Most  common  strategy  is  the  nega:ve/exclusionary  screening,  US$  8.3  trillion  AuM   Norm-­‐based  screening,  US$  3.0  trillion  AuM  mostly  Europe  (65%  of  known  SRI  AuM)   Posi:ve/best-­‐in-­‐class  screening  1.0  trillion  AuM,  mostly  US   Assets  u:lizing  ESG  integra:on  are  at  US$  6.2  trillion   Impact  Inves:ng  theme  investments  are  s:ll  fragmented  and  compara:vely  small  at  US$   89.0  billion   Sustainability  theme  investments  are  also  compara:vely  small  at  USD  83.0  billion     *Source:  The  Global  Sustainable  Investment  Alliance  (GSIA)  Report  2012,  hip://gsiareview2012.gsi-­‐alliance.org     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           14  
    • GLOBAL  SUSTAINABLE  INVESTING  (SRI/RI)  (COND.)    Screening  of  investments     Nega:ve/exclusionary  screening  -­‐  The  exclusion  from  a  fund  or  poryolio  of  certain  sectors,  companies  or  prac:ces   based  on  specific  ESG  criteria     Posi:ve/best-­‐in-­‐class  screening  -­‐  Investment  in  sectors,  companies  or  projects  selected  for  posi:ve  ESG   performance  rela:ve  to  industry  peers   Norms-­‐based  screening  –  Screening  of  investments  against  minimum  standards  of  business  prac:ce  based  on   interna:onal  norms   Integra:on  of  ESG  factors     The  systema:c  and  explicit  inclusion  by  investment  managers  of  environmental,  social  and  governance  factors  into   tradi:onal  financial  analysis.     Sustainability  themed  inves:ng   Investment  in  themes  or  assets  specifically  related  to  sustainability  (for  example  clean  energy,  green  technology  or   sustainable  agriculture)   Impact/community  inves:ng   Targeted  investments,  typically  made  in  private  markets,  aimed  at  solving  social  or  environmental  problems     Impact  inves:ng  includes  community  inves:ng,  where  capital  is  specifically  directed  to  tradi:onally  underserved   individuals  or  communi:es,  or  financing  that  is  provided  to  businesses  with  a  clear  social  or  environmental  purpose   Corporate  engagement  and  shareholder  ac:on   This  strategy  employs  shareholder  power  to  influence  corporate  behavior  including  through  direct  corporate   engagement  (i.e.  communica:ng  with  senior  management  and/or  boards  of  companies),  filing  or  co-­‐filing   shareholder  proposals,  and  proxy  vo:ng  that  is  guided  by  comprehensive  ESG  guidelines   *Source:  The  Global  Sustainable  Investment  Alliance  (GSIA)  Report  2012,  hip://gsiareview2012.gsi-­‐alliance.org     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           15  
    • INTEGRAL  INVESTORS:  POSITIONING  AND  DRIVERS     HIGH   “FINANCIAL  FIRST”   IMPACT  INVESTORS   Op:mize  financial  returns   while  maintaining  an   impact  floor   FINANCIAL  RETURNS   Pure  Financial                           IMPACT  FLOOR   PROFIT  FLOOR   LOW   LOW   INTEGRAL   INVESTORS   Op:mized,  risk  adjusted   financial  returns  and   premium  impact  returns        “IMPACT  FIRST”        IMPACT  INVESTORS        Op:mize  social/        environmental  impact          while  maintaining            a  financial  floor   Pure  Philanthropy   Philanthropy   SOCIAL,  ENVIRONMENTAL,  ETHICAL,  CULTURAL,  &  HAPPINESS  IMPACT   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.                 HIGH   16 16  
    • ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           17  
    • The  integra:on     between  Tradi:onal  Inves:ng     and  Sustainable  Impact  Inves:ng  is   needed  in  order  to  fulfill  the  needs   of  leading  edge  investors  today   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           18  
    • AN  INTEGRATED  APPROACH:  AQAL  CAPITAL   INTEGRAL  INVESTING   TRADITIONAL   INVESTING     Profit  Metrics   AQAL  Inves:ng,  Natural  Inves:ng   Integral  Metrics   Interior   Exterior   Individual   e.g.     TRADITIONAL     WALL  STREET   BANKS   AND     VENTURE  CAPITAL   FIRMS       Profit       IMPACT     INVESTING   Sustainability  Metrics   ESG,  IRIS,  SAM   Ethics,  Ego,   EmoJons  &     Consciousness   Behavior   e.g.   GRAMEEN  BANK   LGT  VENTURE   PHILANTHROPY     Triple  BoAom  Line       People   Culture  &   Morals     Planet   People   Profit   Collec:ve   Planet   Profit     Integral  Inves:ng  is  based  on  Ken  Wilber’s  Integral  theory  that  is  widely  applied  in  50  disciplines  including  science,  poli:cs,  economics,  educa:on,  medicine,  and  business;  Ken  Wilber  is  endorsed  by  Nobel  Prize   laureate  Al  Gore,  former  US  President  Bill  Clinton,  former  Secretary  of  State  Hillary  Rodham  Clinton,  and  is  also  used  i.e.  at  McKinsey  and  Company.     Source:  Wilber,  K.  (2000).  A  theory  of  everything:  An  integral  vision  for  business,  poli5cs,  science,  and  spirituality.  Boston:  Shambhala.     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           19  
    • WHAT  IS  INTEGRAL  INVESTING?   Integral  Inves:ng  is  a  leading  edge  investment  model  based  on  Ken  Wilber’s  integral  theory     It  is  a  holis:c  inves:ng  vehicle  that  targets  both  premium  market  and  premium  impact   returns  for  the  benefit  of  all     It  implements  the  Parity  of  People,  Planet,  Profit,  with  Passion  and  holis:c  Purpose  in   inves:ng       It  is  an  investment  thesis  that  drives  the  self-­‐actualiza:on  of  all  par:cipa:ng  agents  by   unifying  humanity’s  values  spheres,  the  True,  the  Good,  and  the  Beau:ful  in  inves:ng     Its  de-­‐risking  tools  integrate  tradi:onal  financial  due  diligence,  with  environmental,  social,   and  governance  (ESG)  metrics,  and  with  cultural,  behavioral,  and  consciousness   assessments       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           20  
    • What  is  the  evidence?   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           21  
    • ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           22   22  
    • ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           23  
    • SUSTAINABILITY  PAYS   STUDIES  THAT  PROVE  THE  BUSINESS  CASE  FOR  SUSTAINABILITY   ”Businesses  can  improve  short-­‐  and  long-­‐term  profitability  through  the  adop:on  of  sustainable  prac:ces  in  the   following  areas:   Natural  Resource,  Energy,  and  Opera:onal  Efficiency   Reduce  input  and  overhead  costs,  militate  regulatory  sanc:ons,  hedge  exposure  to  vola:le  prices  and  supply  chain  disrup:ons,   and  mi:gate  environmental  degrada:on,  and  conserve  capital  for  implemen:ng  a  long-­‐term  growth  strategy  -­‐  See  studies  by   Goldman  Sachs,  DeloiAe,  Interface  Inc.,  McKinsey,  Pricewaterhousecooper,  Center  for  American  Progress   Human  Resources  Management   Retain  experienced  workers,  prevent  the  loss  of  corporate  knowledge,  lower  training  costs,  reduce  employee  absenteeism,   improve  worker  produc:vity,  and  recruit  the  best  talent  -­‐  Goldman  Sachs,  Gallup,  Economist  Intelligence  Unit,  IBM,  NEEF   Financial  Opera:ons   Increase  market  capitaliza:on  and  stock  growth,  improve  investor  rela:ons,  lower  insurance  premiums,  decrease  borrowing   costs,  and  Improve  access  to  capital-­‐  Goldman  Sachs,  Economist  Intelligence  Unit,  Ethisphere,  Gallup,  IBM,  Innovest,  Johannes  Kepler  University,   SAM,  University  of  California   Marke:ng  and  Communica:on   Expand  customer  base,  differen:ate  products,  improve  brand  image,  and  secure  customers  that  are  less  sensi:ve  to  price,  have   greater  brand  loyalty,  purchase  more  and  more  frequently  -­‐    Goldman  Sachs,  Accenture,  DeloiAe   Collabora:on  with  NGOs  and  Government   Gain  access  to  new  markets,  beier  supply-­‐chain  management,  strengthen  regulator  and  community  rela:ons,  improve  brand   image,  mi:gate  risks  to  brand  reputa:on,  militate  government  sanc:on  -­‐  Goldman  Sachs,  Accenture,  Economist  Intelligence  Unit,  IBM”   Source:  Lovins,  H.  Natural  Capitalism  Solu:ons  Website.  Downloaded  February  7,  2014  from  hip://www.natcapsolu:ons.org/businesscasereports.pdf   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           24  
    • MORE  NUMBERS  AND  FACTS  ….   Over  the  next  40  years,  Genera:on  X  and  the  Millennial  Genera:on  will   poten:ally  inherit  an  es:mated  US$  41  trillion  from  the  Baby  Boomer   Genera:on*     These  genera:ons  consider  “improve  society”  as  their  number  1  priority  of   business**     Leaders  in  sustainable,  social,  and  good  governance  policies  have  25%   higher  stock  value  than  their  less  sustainable  compe:tors     35%  of  impact  inves:ng  funds  target  internal  rates  of  return    (IRR)  of   20%!!!!!**         *Source:  Havens,  J.  JJ.,  &  Schervish.  (2003).  Why  the  $41  trillion  wealth  transfer  es:mate  is  s:ll  valid:  A  review    of  challenges  an  ques:ons,  Boston  College  Social  Welfare  Research  Ins:tute.   **  Source:    Drexler,  M.,  Noble,  A.  (2013).  From  margins  t  mainstream:  Assessment  of  the  impact  investment  sector  and  opportuni:es  to  engage  mainstream  investors,  hip://www3.weforum.org/docs/ WEF_II_FromMarginsMainstream_Report_2013.pdf   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.             25  
    • PREMIUM  FINANCIAL  RETURNS  FOR  INTEGRAL  COMPANIES   FIRMS  OF  ENDEARMENT                     (FoEs)  2007*   GOOD  TO  GREAT  COMPANIES   (GGCs)  2002   Nucor;  Kimberly-­‐Clark   Kroger;  Walgreens   Wells  Fargo;  Gilleie   Sample:  3.0x    higher  ROI  than  market   average     (S&P  500)  over     15  years           INTEGRALLY   ACTING  BUSINESSES   The  Container  Store      Entelios  AG,  Whole  Foods   Trader  Joe’s;  Patagonia   DM,  REI,  Stoneyfield  Farms   Patagonia  Amazon   Southwest  Airlines   IKEA;  BMW;  eBay,   AVEDA     Sample:  8.0x   higher  ROI  than  market  average   (S&P  500)  over  10  years;  and  3.1x   higher    than  GGCs   15  Year   CumulaJve   Annualized   10  Year   CumulaJve   Annualized   Sample:  Whole  Foods:     +40%   Higher  ROI  than  FoEs   over  10  years   (1800%  shareholder  value  1995– 2006)   5  Year   CumulaJve   Annualized   3  Year   CumulaJve   Annualized   FOE  Return   1646.1%   21.0%   254.4%   13.5%   56.4%   9.4%   77.4%   21.1%   GTG  Return   177.5%   7.0%   14.0%   1.3%   -­‐35.6%   -­‐8.4%   -­‐23.2%   -­‐8.4%   S&P  500  Return   157.0%   6.5%   30.7%   2.7%   15.6%   2.9%   10.3%   3.3%   Note: Company returns are total returns with dividends reinvested and compounded** *Source:  Sisodia,  R.,  Sheth,  J.,  Wolfe,  D.B.  (2007).  Firms  of  endearment:  How  world-­‐class  companies  profit  from  passion  and  purpose.  New  Jersey:  Wharton  School,  p.  16;  **Source:  Mackey,  J.,  &  Sisodia,  R.,  (2013).   Conscious  Capitalism:  Libera:ng  the  heroic  spirit  of  business.  Boston:  Harvard  Business  Press  Review.   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           26  
    • OUTCOMES  TODAY   Demys:fying  the  landscape  of  rather  confused  investors   Understanding  the  hidden  determinants,  context,  and  trends   Unleashing  the  power  of  the  integral  model  for  the  benefit  of  all     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           27  
    • THE  FINANCIAL  CONTEXT   The  disaster  of  2007/2008  nearly  ruined  the  global  economic  system   –  By  Oct.  2008,  about  $25  trillion  were  obliterated  from  the  value  of  stock  markets   What  started  with  an  ini:al  liquidity  crisis  lead  to     –  The  disrup:on  of  capital  flows   –  The  collapse  of  the  “too  big  to  fail”  financial  organiza:ons  incl.  Lehman  Bros.,  Fannie  Mae,  and   Freddy  Mac   –  Severe  downturns  in  the  global  casino/stock  markets  world  wide   –  Currency  crunches,  failure  of  major  businesses  ,  global  recession  including  the  European  sovereign-­‐ debt  crisis  (Ireland,  Portugal,  Greece,  Spain,  Cyprus,  etc.)     –  LIBOR,  Madoff  scandals   –  No  end  in  sight!   Q:  How  sustainable  are  our  financial  and  economic  systems?   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           28  
    • THE  SOCIAL  CONTEXT   Real  estate  bubble  bursts,  foreclosures,  evic:ons  (USA,  Spain,  Ireland,  etc.)   Prolonged  unemployment  in  most  Western  countries   –  7.6%  USA,  12%  in  Europe  on  average   Increased  inequality  in  the  West   –  USA  with  the  “most  millionaire  households”  in  the  world  followed  by  Japan,  China,  UK,  and   Germany   Growing  health  problems  physically,  mentally,  emo:onally   –  Cancer,  overweight,  obesity,  depression,  asthma   Social  unrests:     –  Occupy  movement,  Spanish  Indignados,  Greek  protest,  Arab  spring,  Ucraine  protests   Ø  The  worst  social  consequences  since  the  Great  Depression   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           29  
    • THE  ENVIRONMENTAL  CONTEXT   We  con:nue  to  emit  twice  as  much  CO2  in  the  atmosphere  than  can  be  absorbed   by  our  forests  and  oceans  with  disastrous  consequences  for  the  earth’s  ecological   balance:   –  Global  warming  at  accelerated  speed  can  lead  up  to  2-­‐4  degrees  Celsius  in  this  century   –  Ongoing  droughts   Water  is  becoming  more  important  than  petrol     –  Ongoing  hurricanes,  floods,  rapid  mel:ng  of  polar  ice  caps  lead  to  the  raise  of  ocean   levels   –  Irrecoverable  loss  of  bio  diversity   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           30  
    • What  is  going  on?   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           31  
    • The  quiet  killer  and  the  driving   force  behind  destruc:on     but  also  the  GOOD  is     Exponen:al  Growth       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           32  
    • Most  decision  makers     do  not  get  it     un:l  it  is  much   to  late  to  respond       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           33  
    • What  is  Exponen:al  Growth?       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           34  
    • The  sage  and  the  Indian  king       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           35  
    • THE  SAGE  AND  THE  INDIAN  KING   8  >  1+2+4=7     32  >  1+2+4+8+16=31     On  each  new  field,  there  are  more  grains   of  rice  than  in  all  previous  fields  together   Exponen:al  growth  means  that  each   duplicaJon  contains  a  larger  quan:ty  of   things  than  all  previous  quanJJes  taken   together   The  last  square  would  contain   9.223.372.036.854.780.000  grains  of  rice   that  would  cover  the  surface  of  today’s   India  with  more  than  1  meter  of  rice   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           36  
    • EXPONENTIAL  POPULATION  GROWTH   220.000  PEOPLE  ARE  BORN  PER  DAY  (NET)     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           37  
    • EXPONENTIAL  ECONOMIC  GROWTH   It  took  Europeans  1000  years,  the  UK  100  yrs.,  Germany  70  yrs.,  Japan  50  yrs.,  and     it  took  China  only  6  years  to  double  its  economic  output   China’s  resource  hunger  is  not  only  a  media  event   Its  GDP  has  doubled  6  :mes  since  1978   By  2017,  it  will  need  more  resources  and  will  produce  more  goods  than  in  its  en:re  history  all  together!   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           38  
    • OUR  TRUE  PROBLEM:  LACK  OF  AWARENESS  REGARDING  THE   IMPORTANCE  OF  EXPONENTIAL  GROWTH   With  every  duplica:on,  the  quan:ty  added  is  LARGER  than  the  en:re   compounded  previous  quan:ty   The  megatrends  in  the  21st  century  are:   –  Exponen:al  popula:on  growth   –  Exponen:al  economic  growth   –  Exponen:al  consumer  growth:  During  the  last  40  years,  we  added   3  addi:onal  Billion  consumers     Ø  We  have  reached  our  physical  Limits  to  Growth  on  our  planet   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           39  
    • DRAMATIC  EXAMPLES  OF  EXPONENTIAL  GROWTH   Food  produc:on  and  water  usage     –  We  already  have  an  acute  water  shortage  and  not  enough   agricultural  fields  for  food  produc:on   –  The  need  for  food  and  potable  water  is  growing  at  2.5  %  p.a.,   which  will  double  in  28  years  from  now     Ø  This  means  that  in  28  years  from  now  humanity  will  need  more   water  and  food  than  in  its  en:re  previous  history     Ø  By  2035  we  will  need  another  Earth  if  no  significant  change   occurs!!!!   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           40  
    • “Humanity  is  stupid  enough  not  to   do  what  is  perfectly  doable”       to  prevent  disaster,  Prof.  Randers         ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           41  
    • Is  that  really  true?   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           42  
    • Maybe!   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           43  
    • But,  something  good  is  also  going  on!   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           44  
    • EVOLUTION  OF  HUMAN  CONSCIOUSNESS  TO  LATER  STAGES  OF   DEVELOPMENT   INTEGRALLY  ACTING  HUMANS   RATIONAL   INTEGRATING  HUMANITY’S  VALUE  SPHERES   “DeMedici  Effect”  in  the  21st  century   INTELLIGENCE     THE     TRUE   -­‐  SCIENCE  -­‐   THE     TRUE     -­‐  SCIENCE  -­‐   THE   BEAUTIFUL   -­‐  ART  -­‐   ENLIGHTENMENT  ERA   DEMOCRACY   NATION  STATES   MODERN  MEDICINE   SPACE  SHUTTLE   THE     GOOD   -­‐  MORALS  -­‐       ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           EMOTIONAL   ART,  VALUES,  MORALS,   ETHICS     THE     BEAUTIFUL   -­‐  ART  -­‐   CIVIL  RIGHTS  &  GREEN   MOVEMENT   FEMINISM   SOCIAL  BUSINESS   CULTURAL  CREATIVES:   25-­‐30%   45  
    • That’s  true  for  everybody  including   investors,  business  people,    and  leaders  in  general!   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           46  
    • RESEARCH  ON  PRIVATE  EQUITY  INVESTORS   132  investors:  50%  men  –  50%  women   Global  investors  from  USA,  Canada,  Germany,  China,  India,  France,   Thailand,  Bali,  Singapore,  Turkey,  Dubai,  Ireland,  Switzerland   High-­‐tech,  clean-­‐tech,  music,  beverage,  health  care,  Wall  street   financiers,  lawyers,  music  industry   Ac:ve  philanthropists  and  social  entrepreneurs   Stanford,  MIT,  Harvard,  Sorbonne,  etc.  graduates   –  45  doctorate  degrees,  60  MBAs,  other  Master’s  degrees   Aggregated  investment  capital:  $1.39B   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           47  
    •    THE  HERO’S  JOURNEY:  AWAKENING   Physical  degradation,  back  pain,  overweight,  regular  colds,  heart   problems,  food  allergies,  injuries,  multiple  sclerosis   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           48   Copyright  2010    |       48  
    •    THE  HERO’S  JOURNEY:  EMOTIONAL  PAIN   “horrible  divorce,”  death  of  “mother”  or  “wife,”  “high-­‐degree   anxiety,”  “worry  and  fear,”  “heartbreak,”  tension  between  “fear  and   desire,”  “grief,”  the  “need”  to  be  accepted  by  the  outside  world,   “frustration,”  “lack  of  trust,”  “lack  of  joy,”  “deep  sadness,”  “lack  of   alignment,”  “lack  of  fulbillment,”  “completely  unhappy” ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           49   Copyright  2010    |       49  
    •    THE  HERO’S  JOURNEY:  THE  TIPPING  POINT   TERRIBLE  EMOTIONAL  PAIN  LEAD  TO  THE  COURAGE  TO   FACE  OWN  SHADOW  USING  TEACHERS   – “Got  fed  up  with  fear”   – Decision  to  experience  the  “dark  night  of  the  soul”     – Asking  essen:al  life  ques:ons:  “Who  am  I?  Why  am  I  here?”   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           50   Copyright  2010    |       50  
    • NOTICED  LACK  OF  MEANING  AND  FULFILLMENT   “I  wasn't  manifes:ng  why  I  was  here”     “I  was  following  a  script  that  wasn’t  authored  by  me”   “While  there  were  fun  things  like  building  new  markets  and  I  really   enjoy  business,  there  was  this  sort  of  almost  mind  numbingly   impossible  monotony  around  the  trajectory  that  I  was  on”   “I  had  enough  intellectual  understanding  that  the  gold  rings  were   running  out”   “There’s  fewer  jobs  led”  in  the  world   “There  was  a  growing,  gnawing,  unfulfillment  of  maximizing   shareholder  value”     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           51  
    • UNITY  CONSCIOUSNESS  EXPERIENCES   “Lightning  bolt  [that]  moved  through  my  body”     “Out-­‐of-­‐body  experience  …  that  really  showed  me  very  clearly  that  I  am  not  my  body”   “We  proceeded  to  have  a  conversa:on  where  he  read  my  mind  and  responded  so  I   never  opened  my  mouth”   “Feeling  [that]  would  be  so  powerfully  strong  that  it  was  almost  to  the  point  where   you  couldn’t  walk”     “Mys:cal  experience,”  “divine  light,”  “divine  intelligence,”  the  “heart  was  exploding   with  love,”   “My  body  turned  into  an  intense  beam  of  light”   “My  heart  opened  and  I  could  feel  every  bird  and  insect  as  part  of  me”     Ø  They  had  no  framework  to  understand  what  was  going  on  and  a  “quantum  leap  in   consciousness”  was  the  result   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           52 52  
    • THE  HERO’S  JOURNEY:  RETURN  TO  SOCIETY   “This  [journey  within]  was  like  drinking  out  of  a  bire  hose.  In  this   area,  MIT  and  Stanford  Business  School  were  like  drinking  out  of  a   bire  hose  for  academic  and  business  issues.  This  was  like  drinking   out  of  a  bire  hose  for  emotional,  spiritual  and  consciousness  issues.   We  need  both.”   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           53   Copyright  2010    |       53  
    • INVESTORS’  VALUES  SHIFT   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           54  
    • Exponen:al  growth  works  on  the     GOOD  as  well     This  is  our  opportunity!   ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           55  
    • OUTCOMES  TODAY   Demys:fying  the  landscape  of  rather  confused  investors   Understanding  the  hidden  determinants,  context,  and  trends   Unleashing  the  power  of  the  integral  model  for  the  benefit  of  all     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           56  
    • THE AQAL APPROACH THE  INTEGRAL  INVESTING  DUE  DILIGENCE  MODEL  AND  PROCESS   INTEGRAL  INVESTING   TRADITIONAL   INVESTING     Profit  Metrics   AQAL  Inves:ng  Screening  Process   Integral  Metrics   Interior   Exterior   Collec:ve   Individual   e.g.     TRADITIONAL     WALL  STREET   BANKS   AND     VENTURE  CAPITAL   FIRMS       Profit       IMPACT     INVESTING   Sustainability  Metrics   ESG,  IRIS,  SAM   Individual   Consciousness   (incl.  morals  &   values)     Due  Diligence   Individual  &   CollecJve  Gap   Analysis  &   Report   e.g.   GRAMEEN  BANK   LGT  VENTURE   PHILANTHROPY     Triple  BoAom  Line       Financial  DD   OrganizaJonal,   Cultural  &  Ethical     Due  Diligence   (DD)     Planet   Social,  Stakeholder   &  Governance  DD   People   Environmental  DD   Profit     Integral  Inves:ng  is  based  on  Ken  Wilber’s  Integral  theory  that  is  widely  applied  in  50  disciplines  including  science,  poli:cs,  economics,  educa:on,  medicine,  and  business;  Ken  Wilber  is  endorsed  by  Nobel  Prize   laureate  Al  Gore,  former  US  President  Bill  Clinton,  former  Secretary  of  State  Hillary  Rodham  Clinton,  and  is  also  used  i.e.  at  McKinsey  and  Company.     Source:  Wilber,  K.  (2000).  A  theory  of  everything:  An  integral  vision  for  business,  poli5cs,  science,  and  spirituality.  Boston:  Shambhala.     ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           57  
    • FOUNDATIONAL AQAL METRICS KEN  WILBER’S  INTEGRAL  MODEL   Self  &  Consciousness   [SubjecJve  Experience]   Brain  &  Organism   [ObjecJve  Behaviors]   I   IT   8   Integral  Self   7   Holis:c  Self   6   Sensi:ve  Self   5   Achiever  Self   4   Mythic  Self   3   Egocentric  Self   2   Magical  Self   1   Ins:nctual  Self   5   6   7   8   SF3   SF2   3   SF1   2   Complex  Neocortex   1   Neocortex  (Triune  Brain)   4   INTERIOR  INDIVIDUAL   EXTERIOR  INDIVIDUAL   INTERIOR  COLLECTIVE   EXTERIOR  COLLECTIVE   Archaic   1   Animis:c-­‐Magical   2   Early  Mythic   3   Late  Mythic   4   Scien:fic-­‐Ra:onal   5   Pluralis:c   6   Holis:c   7   Integral   8   1   WE   ITS   Culture  &  Worldview   [INTER-­‐SubjecJve]   Survival  Clans   Ethnic  Tribes   2   Feudal  Empires   3   Early  Na:ons   4   Corporate  States   5   Value  Communi:es   6   7  Holis:c  Communi:es   Integral         8      Meshworks   Four  quadrant   correlates     for  humans,   along  lines  of     increasing   complexity   Ken Wilber’s Integral Model is endorsed by Bill & Hilary Clinton and Applied in 50+ disciplines and organizations including McKinsey and Company Social  System  &  Environment   [INTER-­‐ObjecJve]   Source: Wilber, K. (2000). A theory of everything: An integral vision for business, politics, science, and spirituality. Boston: Shambhala. ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           58  
    • ©  2014  AQAL  Capital.  All  rights  reserved.  Strictly  Confiden:al.           59