A summary of the TCM model for a Global Impact Investment Bank.

1. Different by design, to make a difference
summary presentation
Steve Podmore - Founder
Dec 2011

2. three questions...
for every outlier that emerges, how many,
large or small, perish or give up on the journey ?
when black swans are on their way up, why are they so rarely
spotted and supported by those supposedly best placed to do so?
what would it mean for the world if there was a better way of finding,
supporting, investing and fairly sharing rewards and returns with them?
2

3. IMAGINE A SYSTEM OF INVESTMENT WHERE...
• early in their
• £50k - £200k in seed funding is
development the black
invested into many, that can be staged
swans who are changing
to £40m and beyond if need be
the world can be found
• investment is on fair and • impact entrepreneurs can
transparent terms, along raise whatever is needed,
with fully incentivised and on merit and on objective
structured help and support assessment of potential
• failure is not shunned joined up thinking
or stigmatised, and lessons harnesses collective and
learned are captured as key responsible intelligence
drivers for collective success and blended returns
3

4. AND WHERE...
investors are able to
Governments who are desperate
generate risk adjusted
to create jobs, are helped to do
returns in strategically
so with scale and diversity
attractive areas
responsible and academic and research
motivated corporations personnel have the ability to
are strengthened via access protect their pensions
to open innovation and futures
these features
philanthropists
can then be scaled
are helped to generate,
around the globe
leveraged sustainable impact
4

5. GLOBAL IMPACT
INVESTMENT BANK
TCM
NOW IMAGINE a GLOBAL IMPACT INVESTMENT BANK
focussed on setting up the innovative funds, partnerships and
structures which can best address the big issues of our time
5

6. © 2011 Steve Podmore
‘Economic Food Chain Theory’
LODR
short term markets
miss or ignore the law
of diminishing returns
n
so nvir
io
e
ur on
t
ra
ce m
nt
of en
ce
on
ec tal
lc
on re
ta
om co
pi
ic ver
ca
POTEFC
an y
d
with
now capital starved plankton TCM
of the economic food chain
piecemeal individual investments, small scale aggregate pooled investments, larger scale
ineffectual, not efficient, higher individual risk effective, efficient, lower individual risk
companies of 1 - 500 employees, who are responsible for 50 - 80% of all job creation, and 50% plus of all innovation,
are receiving less than 0.05% of institutional investment, and what they receive is often predatory and short term focussed

7. TCM aims to
widen or eliminate
critical bottlenecks
market IMPACT INVESTMENT working
failure market
job creation
economic recovery
solutions to big challenges
TCM will be focused exclusively on eliminating bottlenecks, removing barriers, and fixing key
market failures which have created severe instability by dangerously impeding levels of social,
environmental and economic development.
7

8. mis pricing of capital and return timeframe
language / business model disconnects
poor perception of risk / reward
lack of historical data
$1 Trillion
management / scale
latent market
global banks
institutions
investors
platforms
initiatives
projects
funds
deals
impact investments
$1 Trillion
of opportunity
barriers, gaps & bottlenecks
8

9. pipeline - capacity building
intermediation
TCM
global banks
institutions
investors
platforms
initiatives
projects
funds
deals
creating optimum
conditions for ‘game changing’
impact investments
and positive financial innovation to emerge
9

10. 100 million jobs 500 million
created worldwide people nourished
$100 billion of 500 million tons
impact investment of carbon removed
“people generally overestimate what can be achieved in a year,
and underestimate what can be achieved in a decade”
10

11. agile
consulting
scale,
and
cloud
technologies
TCM
Active
MAXIMUM Impact
Investment
RETURN Focus TCM
TARGET
RESULTS
financial
return
orientation
Traditional
Capital
Markets
Traditional
Impact
Investment
Position
Traditional
NO Philanthropy
RETURN
NO impact
orientation PRIMARY
CONCERN FOCUS
(Truestone Impact Investment Management)
TCM aims to raise, blend and deploy capital, initially via indirect or direct funds, with a process of
systematising added value and using intelligent networks to drive overall results and manage risk.
TCM will change the rules of the game by deploying
The model gives the potential for capital efficiency and critical mass in order to deliver +/- market
ACTIVE Impact Investment - GLOBALLY
returns, and leveraged social and environmental impacts (greater impact potential compared to traditional
investment or philanthropy alone).
11

12. areas of impact business sectors fund/instrument
‣ working market and job creation ‣ agriculture ‣ eduction ‣ pooled - seed, angel,
venture and private
‣ energy / resource management
‣ water ‣ energy equity funds
‣ market / societal stability
‣
‣ housing ‣ enterprise fund of funds
‣ poverty eradication
‣ quality of life gains ‣ climate ‣ technology ‣ fund of fund management
‣ conflict reduction ‣ health ‣ finance ‣ capacity / scale funds
‣ direct & indirect funds
return comparison - impact / benchmark ‣ impact bonds
developed / emerging markets - vc / corporate debt
‣ climate bonds
30 ‣ micro finance
23 ‣ micro insurance
‣
% IRR
15 platforms & exchanges
8 ‣ guarantees / wrappers
TCM will have freedom to use
0 whatever instruments or fund
Debt (developed mkt) Debt (emerging mkt) VC (developed mkt) VC (emerging mkt)
structures are appropriate and
Benchmark Impact Investment (JP Morgan) aligned with the mission.
12

13. GLOBAL IMPACT INVESTMENT BANK
structure - raise - research - technology - network - template - publicity - brand
GLOBAL IMPACT LOCAL IMPACT
INVESTMENT FUND INVESTMENT FUND(S)
sponsors
13

14. Global Impact Investment Fund (GIIF)
The
big
idea
around
the
Global
Impact
Investment
Fund,
is
to
find
the
most
innova4ve,
‘system
innova4on’
game
changing
ideas
in
Impact
Investment,
to
fully
invest
in
the
management
or
opera4ng
companies,
and
with
our
Global
Impact
Investment
Bank,
support
their
further
fundraising
and
help
them
scale
at
op4mum
speed!
pool of £300m + capital -12 - 15 venture/private equity style investments - invested at the GP/Asset Manager/Platform level
the world urban peer
climate sanitation social social eco system micro to peer
stock impact insurance housing
bonds financing services investment ? ? ? ?
exchange bonds fund and energy
facility fund fund platforms
game changing financial innovators in - sustainability ● health ● education ● energy ● social enterprise
investment banking and sponsor support provided to ensure financial service plays can scale, and scale at optimum speed
14

15. Local Impact Investment Funds (LIIF’s)
Im
e
pa
t
ra
ct
po
In
or
ve
C
st
rso
rs
to
G
es
ov
nv
er
lI
nm
ia
nc
en
na
ts
Fi
Global Impact Investment Bank
Raise Capital - Technology - Research
Investment Template - Brand - Network
£2b UK Impact Investment Fund
15

16. Local Impact Investment Funds (LIIF’s)
lower total cost of capital
SU
LE
PP
A
SC
O
RT
Y
SY
IT
C
ST
LI
EM
B
PU
S
Global Impact Investment Bank
Raise Capital - Technology - Research
Investment Template - Brand - Network
£2b UK Impact Investment Fund
16

17. Local Impact Investment Funds (LIIF’s)
p
i
sh
Im
so
n
ze
cia
£100k £30m
iti
e
pa PP
l/
/c
t
en
ra
ne
ct e OR
vir
eli
on
SU
po
ip
MANY
Inntal / T
m
LE
/p
CAPITAL
or
EARLY
ve fina
n
A
tio
HEAVY
STAGE
C
ca
SC
stncial
tifi
DEALS
or goa
en
id
fund
returns
s ls
deals
found
t
ke
and
nurtured
here generated
here
ar
m
CAPITAL FEW
LIGHT LATE
to iance
STAGE
jo
rs
l I ato TY
es ompl
bs
DEALS
SYation rn
,t
ax
nv r y c
ia regul CI
G
ST & str m
diversity
+
wisdom
of
crowds
nc rns / LI
ov
EMategic ent
dynamic
progressive
portfolios
B
e
PU
S inte s
t u
re
ial
re
na
c
st
an
developed and developing world
fin
Fi
transfer and scalability
20 year vision for a global connected fund network
Global Impact Investment Bank
• Raise Capital - Technology - Research
• • • • • •• •
• • • • • • • • • • Investment Template - Brand - Network
• • • • •
•
• • • • •• • • •
• • • •
• ••
yellow dots • • £2b UK Impact Investment Fund
•
denote each • • •
• • •
potential LIIF • • •
(Local Impact • VENTURE TEAM AIDA TEAM
Investment Fund) • 100 ,000 - 150,000 jobs, and £4b - £6b in tax 60 Persons 180 Persons
generation over10 years (per developed world fund)
17

18. how do we create the right kind of
environment so this type of positive
financial innovation can best occur?
18

19. Global Impact Investment Partners
finance health consulting resources
partners receive:
mobility ‣ intelligence and diversity agriculture
‣ recruitment and retention
‣ commercial returns
‣ active citizenship
‣ global publicity
networks Global Impact Partners each provide £5m p/a
logistics
plus people and support in areas of core capability
info tech construction engineering energy
19

20. logo logo logo logo
logo logo
GLOBALLY DIVERSE
logo logo
$100 billion of 500 million
impact investment people nourished
logo logo logo logo
20

21. logo logo logo logo
IN 100 million jobs 500 million tons
WORK created worldwide of carbon removed
logo logo
powerful
brand association
logo logo
$100 billion of 500 million
impact investment people nourished
logo logo logo logo
21

22. logo logo logo logo
logo logo
exclusive access to a
$1 Trillion opportunity
logo logo
logo logo logo logo
22

23. Scalability
First - LIIF (UK)
3 + GIIP’s & GIIF Target Close
2nd GIIP’s + £50m GIIF First Close
£100m Cornerstone GIIP Deal (Equity/sponsor/GIIF-Investment)
£5m - exclusive option on Cornerstone Global Impact Investment Partner
£1.2m - equity - enable structuring, team, investment readiness - secure cornerstone
23

24. structure for £100m cornerstone Global Impact Partner deal
One ‣ £25m equity investment (held in a charitable foundation)
- 20 - 40% IRR
Global Financial ‣ £25m into Global Impact Investment Fund
- 15% IRR
Institution ‣ £5m p/a x 10 year Global Impact Partnership
- multi level commercial returns
£5m of the £25m equity investment to be paid to guarantee exclusive partnership rights
for the banking category, with time to close the full £100m deal, the balance of which will crystallise
on TCM securing the second Global Impact Partner an additional £25m in commitments to the GIIF
modelled returns for a financial institution (annually - from year 5)
‣ TCM investee company IPO Pipeline - 3 - 5 IPO’s annually ‣ distribution partnership for - £2b - £5b Global Impact
between a £100m - £500m value range Investment fund subsidiary investments
‣ debt issuance - 2 - 3 new LIIF’s annually with £500m - £1b ‣ central role in the 1,000 attendee Global Impact Investing
debt raised in the market + fee for structuring guarantee Conferences to be held on all five continents each year
‣ 1,000 + new business accounts + greater lending capacity ‣ priceless new and enhanced relationships with UHNWI etc.
24

25. Steve Podmore – Founder - A believer in working markets but Matthew Hale - Head Of Sustainable Banking - Bank of America /
driven by the market and value failure that has created so much inequity Merrill Lynch Europe; Treasurer - Merrill Lynch; Treasurer - Bankers Trust;
in the world, Steve has made it his social business and life’s work to do Founder - BearBox & Striding Edge.
something about it on a scale that can make a difference. With a business
background in marketing, psychology, finance and education, Steve created Arthur Wood – Founding Partner - Total Impact Advisors; Founder –
the initial idea which over time morphed into the business model for World Sanitation Financing Facility; Head of Social Financial Services -
Transform Capital Management. Ashoka; Expert in Social / Commercial Structuring; 20 yrs in banking
creating replicatable financial products; Klienwort Benson; Coutts.
The idea for a Global Impact Investment Bank to re-engineer
how global capital finds, funds and enables massive increases in Paul O’Donnell - Chairman, Ogilvy & Mather Group UK. Founder
sustainability development and climate change action turned into a member of OgilvyOne Worldwide of Ogilvy Group Inc. and has served as
workable plan over the first five years. The Get Stuff Done Foundation President, OgilvyOne in Asia Pacific, Chairman of OgilvyOne London, and
has emerged to compliment and enable the vision and to embed its long
Chairman OgilvyOne EAME. Founder of the IPA Direct Marketing
term governance and the fulfilment of any purely social objectives.
Group. Paul holds the Inaugural International Diploma Programme from
Gareth Hughes - Beetle Capital Partners - Founder; Prior to INSEAD, and Masters Degree from Haute Etude Commercial in Paris.
establishing Beetle, Gareth was a Founder and Board member of Climate
Change Capital ('CCC') with overall responsibility for Marketing, Fund Rory Sutherland - Vice-Chairman of Ogilvy Group UK. One of Wired
Development, Capital Raising and Investor Relations. In this role Gareth magazines to 100, Rory joined Ogilvy & Mather Direct in 1988, served as
was involved in the incubation and development of CCC's funds and led head of copy in 1996 and Creative Director in 1997, where he was closely
capital raising of in excess of $1.75bn involved in the agency’s relaunch and restructuring as OgilvyOne.
David George - Head of Energy, Europe URS; Sustainability and Executive Creative Director since 2002 and current President of the IPA.
Environmental Due Diligence Expert;VP & Director of M&A Transaction Ian Philion - Speechwriter, Creative Media Producer, E-learning &
Services Europe – URS. Sustainable Construction Entrepreneur; Advisor to Governments and to
Anita Hoffmann – Special Advisor to the board of Bhairavi energy Corporates in the resources, media and financial sectors.
and Managing Director of Executiva, mission critical search, advisory and
Tim Kruger - Founder of the Oxford Geoengineering Institute,
coaching in the Energy, Renewables, CleanTech, Sustainability and Climate
Change area. Previously Founder and Global Co-head of the Alternative & Founder of Cquestrate, a project to investigate a method of sequestering
Renewable Energy Practice at Heidrick & Struggles. Career in Resources carbon while also addressing rising ocean acidification Tim studied Natural
and Energy with Exxon, Dow Corning, Accenture, Deloitte and ABB. Anita Sciences at Cambridge and has worked for fifteen years in industry in a
holds an MSc Chem Eng. from Lund Technical University in Sweden variety of roles mostly involving innovation.
Founder, team and advisors are currently in discussions with additional members for the core management team.
These include senior strategy, investing and operational personnel for a number of large blue chip institutions.
25

26. £70
£58
£47
£69 m £35
Millions
£50 m £23
£12
£4 m £12 m £19 m
£0
(£18) m
-£12
Year 1 -£23
Year 2
Year 3
Sales Profit / Loss
TCM 3 year profit and loss forecast
26

27. TCM projected return multiple
20 17.1
15 11.4
10 8.0
5.5
5 3.1 3.7
2.6
1.0
0
start yr 3 yrs 4-5 yrs 6-7
£1.2m investor £25m investor
Transform Capital Management projected values
£600
Millions
£400
£600m
£200 £400 m
£200 m
£0 £63 m
at start 3 years 4 -5 years 6 - 7 years
value’s are based on benchmarked price/earnings ratios, and are derived from the full TCM business plan
27

28. A Round of £1.2m - to commence operation with team of 10-12, improve communications & close cornerstone investor/partner
A Round 120,000 15.00% £1,200,000
Final Seed 20,000 2.50% £200,000
Existing Seed 220,000 27.50% £2,200,000
GSD Foundation 40,000 5.00% £400,000 pre money value £6,800,000
SP (Founder) 400,000 50.00% £4,000,000 post money value £8,000,000
TOTAL 800,000 100.00% £8,000,000 price per share £10
First Round of £25m - in order to fully capitalise the venture in order to reach profitability in years 2 or 3.
First Round 800,000 50.00% £25,000,000
A Round 120,000 7.50% £3,750,000
Final Seed 20,000 1.25% £625,000
Existing Seed 220,000 13.75% £6,875,000
GSD Foundation 40,000 2.50% £1,250,000 pre money value £25,000,000
SP (Founder) 400,000 25.00% £12,500,000 post money value £50,000,000
TOTAL 1,600,000 100.00% £50,000,000 price per share £31.25
20% - incoming management and personnel will receive restricted options (shares with performance criteria)
Management 400,000 20.00% £12,500,000
First Round 800,000 40.00% £25,000,000
A Round 120,000 6.00% £3,750,000
Final Seed 20,000 1.00% £625,000
Existing Seed 220,000 11.00% £6,875,000
GSD Foundation 40,000 2.00% £1,250,000 pre money value £50,000,000
SP (Founder) 400,000 20.00% £12,500,000 post money value £62,500,000
TOTAL 2,000,000 100.00% £62,500,000 price per share £31.25
TCM projected return multiple
20 17.1
15 11.4
10 8.0
5.5
5 3.1 3.7
2.6
1.0
0
start yr 3 yrs 4-5 yrs 6-7
£1.2m investor £25m investor
28

29. GLOBAL IMPACT
INVESTMENT BANK
TCM
I n v e s t
I m p a c t
I n s p i r e
Steve
Podmore,
Founder
-­‐
Transform
Capital
Management,
10
Cabot
Square,
Canary
Wharf,
London,
E14
4BQ,
London,
Tel
+44
207
345
3546
:
Mob
+44
7853
008
199
:
www.transformcapitalmanagement.com
:
steve@transformcapitalmanagement.com
29