Global: Secure Seed Funding

People Planet Profits

It is better if the first MarketTown can find a benefactor or benefactors rather than investors. Benefactors have already made or inherited a great deal of money, and now are in the position of asking "what's next". Warren Buffett set up the Giving Pledge as one answer... "to dedicate the majority of their wealth to philanthropy".  There are two types of philanthropy... charity and promoting the wellbeing of people & planet. Charity is more limited, in essence the ambulance at the bottom of the cliff, picking up the pieces. Promoting wellbeing is life-changing, not only preventing damage to people and planet, but promoting a permanent and positive change in humanity. The MarketTown project fits in the latter category.

It is estimated that $5-10 million is required as seed funding to hire the senior management team that will implement the project. That seed funding will answer the core question: "Will it sell?"

Of course, in the business plan, it will do a lot more, but the critical path is to enrol the buyers before the project breaks ground. This is being done primarily because, as a settlement rather than a development, the people must be involved from the onset. In this way, the villages and buildings have authenticity and character that they would not have if they were part of a speculative development.

But this has the added advantage of rapidly diminishing risk, because the project becomes self-funded by aligning the construction loans/mortgages of the estimated 4,000 home buyers, plus buyers of the commercial buildings. There may need to be a Letter of Credit to bridge the time between buyer identification and securitised-bond funding.

It should be noted however, that there is an opportunity for investors. The MarketTown consists of two parts... residential and commercial. The cosmopolitan town centre includes 4-story office buildings. These are not included in the retained profit section. An investor who would like to realise a return on investment on commercial property would be able to provide the seed funding where the residential and owner-occupied commercial become the loss-leader for the commercial investment. To learn more, a meeting is advised.

 

The MarketTown project can be world-changing. The first project requires seed funding. However, after that, second and future generation MarketTowns are self-replicating. Because a developer is not used, the net profits of the first project are retained by the MarketTown, not extracted by investors. However, 10% of the total budget is charged as a reinvestment premium, meaning that if the overall budget is $2 billion, it generates a premium of $200 million. This money is then used to fund the second generation projects. If each 2nd-gen project can be started for $5 million, this could mean as many as 40 2nd-gen projects are started from the first. When those projects are built, they too pay the 10% premium, only by this time, the total is in the billions of dollars. When that fund achieves its 2nd round funding, it can start as many as a thousand projects, except that it first repays the parent MarketTown its $200 million as well as a reasonable ROI.

This same process is repeated, except that once the portfolio grows to 20 MarketTowns, its management structure bifurcates so that the funding organisation does not grow too big. Big money attracts unscrupulous people pathologically obsessed with hijacking good ideas for their own pecuniary interest. That must be avoided. Rather than follow the corporate model of too big to be of any value to humanity, the proposed process is biological. A system of checks and balances keeps the process honest, and ultimately it focuses on wealth creation world-wide. This can happen once the 2nd round of self-replication is complete

It should be emphasised that while the first projects by necessity will serve mostly the middle and working classes of first-world countries, the overall intent is enable peoples worldwide to form MarketTowns in a way that enables them to meet their needs and pursue their aspirations without devouring the planet's resources as they become more comfortable.

For these reasons, the MarketTown Stewards seek benefactors rather than investors. They seek people who have either made or inherited so much money that they now see their purpose is to give back. It also is expected that such benefactors may wish to have an active hand in the process, including possibly appointing the senior management team of the MarketTown. The stewards are clear that they lack the expertise to run such a project and probably lack the skills to hire the best people. Their role is to ensure the project stays true to its principles, does not get hijacked and on a personal level, provides them a place to live for them as well as their children.