Discussion Notes to test the feasibility of Microincesting defined as: Syndicated small amount investing to businesses, startups and individuals that can be reasonably transferable over an exchange platform (“exchange for good and growth”) including both developed and developing economies.

1. Microinvesting
Discussion Notes for
Feasibility Testing
Prepared by: Pete Chatziplis
New York, December 2009

2. Microinvestment Concept
Mi i t tC t
Syndicated small amount investing to
businesses, startups and individuals that
, p
can be reasonably transferable over an
exchange platform
(“exchange for good and growth”)
Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 1

3. Need for Small Business
Financing
Fi i
Micro-lending introduced and gained ground in
developing economies
d l i i
Economical situation and credit crunch highlight need for
small business financing in the US:
There are approximately 25 million businesses in the US and around 90
percent are small businesses.
SBA funds at $5billion; CIT commits $500 million; call for more lending
Angel Investing and Venture Capital don’t cover all needs:
Angel I
A l Investing: US$26 billion to 57,000 companies
ti billi t 57 000 i
Venture Capital: $30.7 billion to 3,900 companies (2007 data)
Accion and Grameen establish US microlending operations
Peer-to-peer loans reached $1.5 billion in 2008 (according to Celent
Research); projected to reach $5.8 billion by 2010.
Charitable giving a sizeable economic factor :
although curbed, charitable giving in the US reached $307.65 billion in 2008 of
which 75% was individual giving;
employment in the non profit sector in the US was 9% of total workforce or 12 5
non-profit 12.5
million (excluding volunteers)
Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 2

4. Microinvesting Features
Mi i ti F t
Small size: $5K-500K
Investment per company can be shared between more than one
investors (“it takes a village to raise a child..”)
5-7 year expected investment horizon
Compared t microlending:
C d to i l di
no interest
redeemed upon maturity
investment should be easily transferable
Market (demand and supply) defines return (no indicated high
water mark as with angel investing/VC)
Investor motives:
prefer to “teach how to fish than hand out a fish
teach fish”
get satisfaction out of mentoring/ getting involved with the business
concept or just seeing good happens (Social ROI)
Proximity counts (to know the person/market; get involved)
Profit making as well as giving may be possible but a clear
distinction of motivations will be sought (system integrity)
Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 3

5. Exchange Platform Features
E h Pl tf F t
Trading of investments will facilitate exit at any time
Price transparency (useful for comparable investments)
Minimal/standardized procedures to control costs
(i.e
(i e member registration/approval etc; size of investment can t pay for
can’t
advisor fees but the word goes far and fast)
Can run in parallel with other exchange platforms in a tiered
system:
Keep high standard for main platform
Investments that don’t make the main platform cut-off could trade at the
micro-level
Attract volume/users that could feed in to the main platform
Minimal investment if run in parallel with other platforms (IT
module; some admin monitoring)
Exchange gets a commission
E h t i i
Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 4

6. Some market participants
S k t ti i t
Global Microlending
US Microlending
US Peer-to-Peer Lending
Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 5

7. Potential P t
P t ti l Partners
Wealthy Investors
Financial Planning Advisors
Private Bankers
Foundations
Charities
NGOs
Estate Planning Lawyers
Community Bankers
Social networking/ Web 2.0 applications
Financial services firms/exchanges
Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 6

8. Pete Chatziplis, Microinvestment: Discussion Notes for Feasibility Testing, New York, December 2009 7