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

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  1. 1. AQALINVESTING:ANINTEGRALAPPROACHTO THEFUTUREOFINVESTING UnleashingthePowerofCurrentTrendsfortheBenetofAll MarianaBozesan,PhD ClubofRome,fullintl. member Founder&GeneralManager,AQALCapitalGmbH,Munich SeniorResearchFellow,Humboldt-ViadrinaSchoolofGovernance,Berlin February11th,20142014AQALCapital.StrictlyConden:al.
  2. 2. OUTCOMESTODAY Demys:fyingthelandscapeofratherconfusedinvestors Understandingthehiddendeterminants,context,andtrends Unleashingthepoweroftheintegralmodelforthebenetofall 2014AQALCapital.Allrightsreserved.StrictlyConden:al.1
  3. 3. OUTCOMESTODAY Demys:fyingthelandscapeofratherconfusedinvestors Understandingthehiddendeterminants,context,andtrends Unleashingthepoweroftheintegralmodelforthebenetofall 2014AQALCapital.Allrightsreserved.StrictlyConden:al.2
  4. 4. Lehman,Fukushima,Mado,Libor, ClimateChange,DebtCrisis2014AQALCapital.Allrightsreserved.StrictlyConden:al.3
  5. 5. leadtowealthownerssinking condenceinins:tu:onalinvestors**Source:BCGReport,RegainingLostGround:Resurgentmarketsandnewopportuni5es.Becerraetal.2010. *Source:BCGReport,RegainingLostGround:Resurgentmarketsandnewopportuni5es.Becerraetal.2010.2014AQALCapital.Allrightsreserved.StrictlyConden:al.4
  6. 6. >=10%ofHighNet-WorthIndividuals wantsustainabilityinbothnancial termsandimpact,butcannotgetit 2014AQALCapital.Allrightsreserved.StrictlyConden:al.5
  7. 7. .becauseinnova:venancial productsthatcanfullltheirneeds aremissingatlargescale2014AQALCapital.Allrightsreserved.StrictlyConden:al.6
  8. 8. THUS,MANYHNWIAREBYPASSINGINSTITUTIONS Seekingalterna:vestotradi:onalfundproducts,odensoberedbyweakerthanexpectedperformance Wealthownersareself-organizing: AVIVACorporateSustainabilityCoali:on($2trillion) RequesttoUNmemberstatestoadhereanddevelopregula:onsforglobalframeworkoncorporatesustainability repor:ng Intl.policyframeworkforcompanydisclosure,transparency,accountability,responsibility,incen:vesInterna:onalIntegratedRepor:ngCommiiee(IIRC) Interna:onalStockExchangeIni:a:ve:RIO+20 Reques:ngsustainabilitylis:ngrules;>43%ofallstockexchangesworldwideadheredtothemalreadyNaturalCapitalDeclara:on Commitmentofthenancialsectortowardtheintegra:onofnaturalcapital(earthsassets&ecosystemservices) criteriaintonancialproductsandservicesSustainableCapitalismManifestoAlGore&DavidBlood GlobalRepor:ngIni:a:ve(GRI):SustainableRepor:ngGuidelinesG4 TheGivingPledge:>50Billionairesstar:ngwithWarrenBuet,Bill&MelindaGates,R.Branson,etc. GIIN/IRISbyTheRockefellerFounda:on Self-organizingfamilyocesincludingPYMWYMIC,AQALInves:ng,RDSCapital,TONIIC ImpactInves:ngisodenmissedbyins:tu:onalinvestors(only5%useit)vs.10%ofHNWI* TheBCorpDeclara:on&theConsciousCapitalismMovementincl.GIIRS *Source:J.P.Morgan&GIINReport:InsightintotheImpactInvestmentMarket. 2014AQALCapital.Allrightsreserved.StrictlyConden:al. December14,2011 7
  9. 9. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.8
  10. 10. GLOBALALLIANCEFORBANKINGONVALUESREPORT* withtotalassetsexceeding$60 billionhas Eliminatedthemythabout lowerreturnsthrough sustainability Beierreturnsonassetsthan regularbanks Signicantlyhigherlevelsof growthinloansanddeposits Higherandbeierqualityof capital Revealedthatsustainable banksaremorerobustand resilientthantradi:onalones GSIFI=GlobalSystemicallyImportantFinancial 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 2014AQALCapital.Allrightsreserved.StrictlyConden:al.9
  11. 11. TRADITIONALINVESTINGISCHALLENGED* FinancialcrisisleadtofearanduncertaintyTRADITIONAL INVESTINGFallingrevenueandmargins Massivecapitalmigra:onProtMetricsFrustratedwealthownerslosingtrustintheirassetmanagers Alterna:veandcustomizedinves:ngareontherise Tradi:onalinves:ngodenfocusedonshort-termprotmaximiza:on attheexpenseoflong-termhealthofglobalcommunity,culture, environment,ethics,andoverallhumanhappiness Tradi:onalinvestmentmetricsodenmissedsustainable,:me-based businessesandresponsibleinvestmentopportuni:es Manytradi:onalassetmanagersfailedtodevelopacorecompetency inalterna:veinves:ngopportuni:esincludingimpactinves:ng(SRI/ RI/ESG)e.g. WALLSTREET BERKSHIRE- HATHAWAY KKR SEQUOIACAPITAL Prot *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 Foundations investments in venture capital funds and the triumph of hope over experience. Kauffman Foundation Research 2014AQALCapital.Allrightsreserved.StrictlyConden:al.10
  12. 12. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.11
  13. 13. ImpactInves:ngisgrowing butitisfragmented2014AQALCapital.Allrightsreserved.StrictlyConden:al.12
  14. 14. IMPACTINVESTINGISFRAGMENTED INTERMSOFMOTIVESANDAPPROACH TwotypesofInvestors* Financial(Prot)FirstInvestors Pursuetheop:miza:onofnancialreturnsbefore havinganimpactoor Investorsarenotwillingtoacceptlowerthanmarket returnsasacosttoop:mizingsocialorenvironmental goods,althoughtheys:llmakeaposi:veimpact Impact(People/Planet)FirstInvestors Seektoop:mizesocialandenvironmentalimpactwith anancialoor Forgreaterimpact,investorsarewillingtoaccept lowerthanmarketnancialreturnsIMPACT INVESTING SustainabilityMetrics: ESGe.g. GRAMEENBANK TRIODOSBANK GLSBANK BANKSARASIN TripleBoAomLine Planet People Prot*Deni:onader(Eurosif,2010,p.7) 2014AQALCapital.Allrightsreserved.StrictlyConden:al.13
  15. 15. GLOBALSUSTAINABLEINVESTING(SRI/RI)ISGROWING* GlobalSustainableInvestmentsusingsomekindofESGcriteriareached US$13.6trillion(=21.8%oftotalAuMin2012) Mostcommonstrategyisthenega:ve/exclusionaryscreening,US$8.3trillionAuM Norm-basedscreening,US$3.0trillionAuMmostlyEurope(65%ofknownSRIAuM) Posi:ve/best-in-classscreening1.0trillionAuM,mostlyUS Assetsu:lizingESGintegra:onareatUS$6.2trillion ImpactInves:ngthemeinvestmentsares:llfragmentedandcompara:velysmallatUS$ 89.0billion Sustainabilitythemeinvestmentsarealsocompara:velysmallatUSD83.0billion*Source:TheGlobalSustainableInvestmentAlliance(GSIA)Report2012,hip://gsiareview2012.gsi-alliance.org 2014AQALCapital.Allrightsreserved.StrictlyConden:al.14
  16. 16. GLOBALSUSTAINABLEINVESTING(SRI/RI)(COND.) Screeningofinvestments Nega:ve/exclusionaryscreening-Theexclusionfromafundorporyolioofcertainsectors,companiesorprac:ces basedonspecicESGcriteria Posi:ve/best-in-classscreening-Investmentinsectors,companiesorprojectsselectedforposi:veESG performancerela:vetoindustrypeers Norms-basedscreeningScreeningofinvestmentsagainstminimumstandardsofbusinessprac:cebasedon interna:onalnormsIntegra:onofESGfactors Thesystema:candexplicitinclusionbyinvestmentmanagersofenvironmental,socialandgovernancefactorsinto tradi:onalnancialanalysis.Sustainabilitythemedinves:ng Investmentinthemesorassetsspecicallyrelatedtosustainability(forexamplecleanenergy,greentechnologyor sustainableagriculture)Impact/communityinves:ng Targetedinvestments,typicallymadeinprivatemarkets,aimedatsolvingsocialorenvironmentalproblems Impactinves:ngincludescommunityinves:ng,wherecapitalisspecicallydirectedtotradi:onallyunderserved individualsorcommuni:es,ornancingthatisprovidedtobusinesseswithaclearsocialorenvironmentalpurposeCorporateengagementandshareholderac:on Thisstrategyemploysshareholderpowertoinuencecorporatebehaviorincludingthroughdirectcorporate engagement(i.e.communica:ngwithseniormanagementand/orboardsofcompanies),lingorco-ling shareholderproposals,andproxyvo:ngthatisguidedbycomprehensiveESGguidelines *Source:TheGlobalSustainableInvestmentAlliance(GSIA)Report2012,hip://gsiareview2012.gsi-alliance.org 2014AQALCapital.Allrightsreserved.StrictlyConden:al.15
  17. 17. INTEGRALINVESTORS:POSITIONINGANDDRIVERS HIGHFINANCIALFIRST IMPACTINVESTORSOp:mizenancialreturns whilemaintainingan impactoorFINANCIALRETURNSPureFinancial IMPACTFLOORPROFITFLOORLOW LOWINTEGRAL INVESTORSOp:mized,riskadjusted nancialreturnsand premiumimpactreturnsIMPACTFIRST IMPACTINVESTORS Op:mizesocial/ environmentalimpact whilemaintaining anancialoorPurePhilanthropy PhilanthropySOCIAL,ENVIRONMENTAL,ETHICAL,CULTURAL,&HAPPINESSIMPACT2014AQALCapital.Allrightsreserved.StrictlyConden:al. HIGH16 16
  18. 18. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.17
  19. 19. Theintegra:on betweenTradi:onalInves:ng andSustainableImpactInves:ngis neededinordertofullltheneeds ofleadingedgeinvestorstoday2014AQALCapital.Allrightsreserved.StrictlyConden:al.18
  20. 20. ANINTEGRATEDAPPROACH:AQALCAPITAL INTEGRALINVESTINGTRADITIONAL INVESTING ProtMetricsAQALInves:ng,NaturalInves:ng IntegralMetrics Interior Exterior Individuale.g. TRADITIONAL WALLSTREET BANKS AND VENTURECAPITAL FIRMS Prot IMPACT INVESTING SustainabilityMetrics ESG,IRIS,SAMEthics,Ego, EmoJons& ConsciousnessBehaviore.g. GRAMEENBANK LGTVENTURE PHILANTHROPY TripleBoAomLine PeopleCulture& Morals PlanetPeopleProtCollec:vePlanetProtIntegralInves:ngisbasedonKenWilbersIntegraltheorythatiswidelyappliedin50disciplinesincludingscience,poli:cs,economics,educa:on,medicine,andbusiness;KenWilberisendorsedbyNobelPrize laureateAlGore,formerUSPresidentBillClinton,formerSecretaryofStateHillaryRodhamClinton,andisalsousedi.e.atMcKinseyandCompany. Source:Wilber,K.(2000).Atheoryofeverything:Anintegralvisionforbusiness,poli5cs,science,andspirituality.Boston:Shambhala.2014AQALCapital.Allrightsreserved.StrictlyConden:al.19
  21. 21. WHATISINTEGRALINVESTING? IntegralInves:ngisaleadingedgeinvestmentmodelbasedonKenWilbersintegraltheory Itisaholis:cinves:ngvehiclethattargetsbothpremiummarketandpremiumimpact returnsforthebenetofall ItimplementstheParityofPeople,Planet,Prot,withPassionandholis:cPurposein inves:ng Itisaninvestmentthesisthatdrivestheself-actualiza:onofallpar:cipa:ngagentsby unifyinghumanitysvaluesspheres,theTrue,theGood,andtheBeau:fulininves:ng Itsde-riskingtoolsintegratetradi:onalnancialduediligence,withenvironmental,social, andgovernance(ESG)metrics,andwithcultural,behavioral,andconsciousness assessments 2014AQALCapital.Allrightsreserved.StrictlyConden:al.20
  22. 22. Whatistheevidence?2014AQALCapital.Allrightsreserved.StrictlyConden:al.21
  23. 23. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.22 22
  24. 24. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.23
  25. 25. SUSTAINABILITYPAYS STUDIESTHATPROVETHEBUSINESSCASEFORSUSTAINABILITY Businessescanimproveshort-andlong-termprotabilitythroughtheadop:onofsustainableprac:cesinthefollowingareas: NaturalResource,Energy,andOpera:onalEciency Reduceinputandoverheadcosts,militateregulatorysanc:ons,hedgeexposuretovola:lepricesandsupplychaindisrup:ons, andmi:gateenvironmentaldegrada:on,andconservecapitalforimplemen:ngalong-termgrowthstrategy-Seestudiesby GoldmanSachs,DeloiAe,InterfaceInc.,McKinsey,Pricewaterhousecooper,CenterforAmericanProgressHumanResourcesManagement Retainexperiencedworkers,preventthelossofcorporateknowledge,lowertrainingcosts,reduceemployeeabsenteeism, improveworkerproduc:vity,andrecruitthebesttalent-GoldmanSachs,Gallup,EconomistIntelligenceUnit,IBM,NEEFFinancialOpera:ons Increasemarketcapitaliza:onandstockgrowth,improveinvestorrela:ons,lowerinsurancepremiums,decreaseborrowing costs,andImproveaccesstocapital-GoldmanSachs,EconomistIntelligenceUnit,Ethisphere,Gallup,IBM,Innovest,JohannesKeplerUniversity, SAM,UniversityofCaliforniaMarke:ngandCommunica:on Expandcustomerbase,dieren:ateproducts,improvebrandimage,andsecurecustomersthatarelesssensi:vetoprice,have greaterbrandloyalty,purchasemoreandmorefrequently-GoldmanSachs,Accenture,DeloiAeCollabora:onwithNGOsandGovernment Gainaccesstonewmarkets,beiersupply-chainmanagement,strengthenregulatorandcommunityrela:ons,improvebrand image,mi:gateriskstobrandreputa:on,militategovernmentsanc:on-GoldmanSachs,Accenture,EconomistIntelligenceUnit,IBM Source:Lovins,H.NaturalCapitalismSolu:onsWebsite.DownloadedFebruary7,2014fromhip://www.natcapsolu:ons.org/businesscasereports.pdf 2014AQALCapital.Allrightsreserved.StrictlyConden:al.24
  26. 26. MORENUMBERSANDFACTS. Overthenext40years,Genera:onXandtheMillennialGenera:onwill poten:allyinheritanes:matedUS$41trillionfromtheBabyBoomer Genera:on* Thesegenera:onsconsiderimprovesocietyastheirnumber1priorityof business** Leadersinsustainable,social,andgoodgovernancepolicieshave25% higherstockvaluethantheirlesssustainablecompe:tors 35%ofimpactinves:ngfundstargetinternalratesofreturn(IRR)of 20%!!!!!** *Source:Havens,J.JJ.,&Schervish.(2003).Whythe$41trillionwealthtransferes:mateiss:llvalid:Areviewofchallengesanques:ons,BostonCollegeSocialWelfareResearchIns:tute. **Source:Drexler,M.,Noble,A.(2013).Frommarginstmainstream:Assessmentoftheimpactinvestmentsectorandopportuni:estoengagemainstreaminvestors,hip://www3.weforum.org/docs/ WEF_II_FromMarginsMainstream_Report_2013.pdf 2014AQALCapital.Allrightsreserved.StrictlyConden:al. 25
  27. 27. PREMIUMFINANCIALRETURNSFORINTEGRALCOMPANIES FIRMSOFENDEARMENT (FoEs)2007*GOODTOGREATCOMPANIES (GGCs)2002 Nucor;Kimberly-Clark Kroger;Walgreens WellsFargo;GilleieSample:3.0x higherROIthanmarket average (S&P500)over 15years INTEGRALLY ACTINGBUSINESSES TheContainerStore EnteliosAG,WholeFoods TraderJoes;Patagonia DM,REI,StoneyeldFarmsPatagoniaAmazon SouthwestAirlines IKEA;BMW;eBay, AVEDA Sample:8.0x higherROIthanmarketaverage (S&P500)over10years;and3.1x higherthanGGCs15Year CumulaJve Annualized10Year CumulaJve AnnualizedSample:WholeFoods: +40% HigherROIthanFoEs over10years (1800%shareholdervalue1995 2006) 5Year CumulaJve Annualized3Year CumulaJve AnnualizedFOEReturn1646.1%21.0%254.4%13.5%56.4%9.4%77.4%21.1%GTGReturn177.5%7.0%14.0%1.3%-35.6%-8.4%-23.2%-8.4%S&P500Return157.0%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).Firmsofendearment:Howworld-classcompaniesprotfrompassionandpurpose.NewJersey:WhartonSchool,p.16;**Source:Mackey,J.,&Sisodia,R.,(2013). ConsciousCapitalism:Libera:ngtheheroicspiritofbusiness.Boston:HarvardBusinessPressReview.2014AQALCapital.Allrightsreserved.StrictlyConden:al.26
  28. 28. OUTCOMESTODAY Demys:fyingthelandscapeofratherconfusedinvestors Understandingthehiddendeterminants,context,andtrends Unleashingthepoweroftheintegralmodelforthebenetofall 2014AQALCapital.Allrightsreserved.StrictlyConden:al.27
  29. 29. THEFINANCIALCONTEXT Thedisasterof2007/2008nearlyruinedtheglobaleconomicsystem ByOct.2008,about$25trillionwereobliteratedfromthevalueofstockmarketsWhatstartedwithanini:alliquiditycrisisleadto Thedisrup:onofcapitalows Thecollapseofthetoobigtofailnancialorganiza:onsincl.LehmanBros.,FannieMae,and FreddyMac Severedownturnsintheglobalcasino/stockmarketsworldwide Currencycrunches,failureofmajorbusinesses,globalrecessionincludingtheEuropeansovereign- debtcrisis(Ireland,Portugal,Greece,Spain,Cyprus,etc.) LIBOR,Madoscandals Noendinsight!Q:Howsustainableareournancialandeconomicsystems?2014AQALCapital.Allrightsreserved.StrictlyConden:al.28
  30. 30. THESOCIALCONTEXT Realestatebubblebursts,foreclosures,evic:ons(USA,Spain,Ireland,etc.) ProlongedunemploymentinmostWesterncountries 7.6%USA,12%inEuropeonaverageIncreasedinequalityintheWest USAwiththemostmillionairehouseholdsintheworldfollowedbyJapan,China,UK,and GermanyGrowinghealthproblemsphysically,mentally,emo:onally Cancer,overweight,obesity,depression,asthmaSocialunrests: Occupymovement,SpanishIndignados,Greekprotest,Arabspring,Ucraineprotests TheworstsocialconsequencessincetheGreatDepression2014AQALCapital.Allrightsreserved.StrictlyConden:al.29
  31. 31. THEENVIRONMENTALCONTEXT Wecon:nuetoemittwiceasmuchCO2intheatmospherethancanbeabsorbed byourforestsandoceanswithdisastrousconsequencesfortheearthsecological balance: Globalwarmingatacceleratedspeedcanleadupto2-4degreesCelsiusinthiscentury Ongoingdroughts Waterisbecomingmoreimportantthanpetrol Ongoinghurricanes,oods,rapidmel:ngofpolaricecapsleadtotheraiseofocean levels Irrecoverablelossofbiodiversity2014AQALCapital.Allrightsreserved.StrictlyConden:al.30
  32. 32. Whatisgoingon?2014AQALCapital.Allrightsreserved.StrictlyConden:al.31
  33. 33. Thequietkillerandthedriving forcebehinddestruc:on butalsotheGOODis Exponen:alGrowth 2014AQALCapital.Allrightsreserved.StrictlyConden:al.32
  34. 34. Mostdecisionmakers donotgetit un:litismuch tolatetorespond 2014AQALCapital.Allrightsreserved.StrictlyConden:al.33
  35. 35. WhatisExponen:alGrowth? 2014AQALCapital.Allrightsreserved.StrictlyConden:al.34
  36. 36. ThesageandtheIndianking 2014AQALCapital.Allrightsreserved.StrictlyConden:al.35
  37. 37. THESAGEANDTHEINDIANKING8>1+2+4=7 32>1+2+4+8+16=31 Oneachneweld,therearemoregrains ofricethaninallpreviouseldstogether Exponen:algrowthmeansthateach duplicaJoncontainsalargerquan:tyof thingsthanallpreviousquanJJestaken together Thelastsquarewouldcontain 9.223.372.036.854.780.000grainsofrice thatwouldcoverthesurfaceoftodays Indiawithmorethan1meterofrice 2014AQALCapital.Allrightsreserved.StrictlyConden:al.36
  38. 38. EXPONENTIALPOPULATIONGROWTH 220.000PEOPLEAREBORNPERDAY(NET)2014AQALCapital.Allrightsreserved.StrictlyConden:al.37
  39. 39. EXPONENTIALECONOMICGROWTH IttookEuropeans1000years,theUK100yrs.,Germany70yrs.,Japan50yrs.,and ittookChinaonly6yearstodoubleitseconomicoutputChinasresourcehungerisnotonlyamediaevent ItsGDPhasdoubled6:messince1978 By2017,itwillneedmoreresourcesandwillproducemoregoodsthaninitsen:rehistoryalltogether! 2014AQALCapital.Allrightsreserved.StrictlyConden:al.38
  40. 40. OURTRUEPROBLEM:LACKOFAWARENESSREGARDINGTHE IMPORTANCEOFEXPONENTIALGROWTH Witheveryduplica:on,thequan:tyaddedisLARGERthantheen:re compoundedpreviousquan:ty Themegatrendsinthe21stcenturyare: Exponen:alpopula:ongrowth Exponen:aleconomicgrowth Exponen:alconsumergrowth:Duringthelast40years,weadded 3addi:onalBillionconsumers WehavereachedourphysicalLimitstoGrowthonourplanet2014AQALCapital.Allrightsreserved.StrictlyConden:al.39
  41. 41. DRAMATICEXAMPLESOFEXPONENTIALGROWTH Foodproduc:onandwaterusage Wealreadyhaveanacutewatershortageandnotenough agriculturaleldsforfoodproduc:on Theneedforfoodandpotablewaterisgrowingat2.5%p.a., whichwilldoublein28yearsfromnow Thismeansthatin28yearsfromnowhumanitywillneedmore waterandfoodthaninitsen:reprevioushistory By2035wewillneedanotherEarthifnosignicantchangeoccurs!!!! 2014AQALCapital.Allrightsreserved.StrictlyConden:al.40
  42. 42. Humanityisstupidenoughnotto dowhatisperfectlydoable topreventdisaster,Prof.Randers 2014AQALCapital.Allrightsreserved.StrictlyConden:al.41
  43. 43. Isthatreallytrue?2014AQALCapital.Allrightsreserved.StrictlyConden:al.42
  44. 44. Maybe!2014AQALCapital.Allrightsreserved.StrictlyConden:al.43
  45. 45. But,somethinggoodisalsogoingon!2014AQALCapital.Allrightsreserved.StrictlyConden:al.44
  46. 46. EVOLUTIONOFHUMANCONSCIOUSNESSTOLATERSTAGESOF DEVELOPMENTINTEGRALLYACTINGHUMANSRATIONALINTEGRATINGHUMANITYSVALUESPHERES DeMediciEectinthe21stcenturyINTELLIGENCE THE TRUE -SCIENCE-THE TRUE -SCIENCE-THE BEAUTIFUL -ART-ENLIGHTENMENTERA DEMOCRACY NATIONSTATES MODERNMEDICINE SPACESHUTTLETHE GOOD -MORALS-2014AQALCapital.Allrightsreserved.StrictlyConden:al.EMOTIONALART,VALUES,MORALS, ETHICS THE BEAUTIFUL -ART- CIVILRIGHTS&GREEN MOVEMENT FEMINISM SOCIALBUSINESS CULTURALCREATIVES: 25-30%45
  47. 47. Thatstrueforeverybodyincluding investors,businesspeople, andleadersingeneral!2014AQALCapital.Allrightsreserved.StrictlyConden:al.46
  48. 48. RESEARCHONPRIVATEEQUITYINVESTORS 132investors:50%men50%women GlobalinvestorsfromUSA,Canada,Germany,China,India,France, Thailand,Bali,Singapore,Turkey,Dubai,Ireland,Switzerland High-tech,clean-tech,music,beverage,healthcare,Wallstreet nanciers,lawyers,musicindustry Ac:vephilanthropistsandsocialentrepreneurs Stanford,MIT,Harvard,Sorbonne,etc.graduates 45doctoratedegrees,60MBAs,otherMastersdegrees Aggregatedinvestmentcapital:$1.39B2014AQALCapital.Allrightsreserved.StrictlyConden:al.47
  49. 49. THEHEROSJOURNEY:AWAKENINGPhysicaldegradation,backpain,overweight,regularcolds,heart problems,foodallergies,injuries,multiplesclerosis2014AQALCapital.Allrightsreserved.StrictlyConden:al.48 Copyright2010| 48
  50. 50. THEHEROSJOURNEY:EMOTIONALPAINhorribledivorce,deathofmotherorwife,high-degree anxiety,worryandfear,heartbreak,tensionbetweenfearand desire,grief,theneedtobeacceptedbytheoutsideworld, frustration,lackoftrust,lackofjoy,deepsadness,lackof alignment,lackoffulbillment,completelyunhappy 2014AQALCapital.Allrightsreserved.StrictlyConden:al.49 Copyright2010| 49
  51. 51. THEHEROSJOURNEY:THETIPPINGPOINTTERRIBLEEMOTIONALPAINLEADTOTHECOURAGETO FACEOWNSHADOWUSINGTEACHERS Gotfedupwithfear Decisiontoexperiencethedarknightofthesoul Askingessen:allifeques:ons:WhoamI?WhyamIhere? 2014AQALCapital.Allrightsreserved.StrictlyConden:al.50 Copyright2010| 50
  52. 52. NOTICEDLACKOFMEANINGANDFULFILLMENT Iwasn'tmanifes:ngwhyIwashere Iwasfollowingascriptthatwasntauthoredbyme WhiletherewerefunthingslikebuildingnewmarketsandIreally enjoybusiness,therewasthissortofalmostmindnumbingly impossiblemonotonyaroundthetrajectorythatIwason Ihadenoughintellectualunderstandingthatthegoldringswere runningout Theresfewerjobsledintheworld Therewasagrowing,gnawing,unfulllmentofmaximizing shareholdervalue 2014AQALCapital.Allrightsreserved.StrictlyConden:al.51
  53. 53. UNITYCONSCIOUSNESSEXPERIENCES Lightningbolt[that]movedthroughmybody Out-of-bodyexperiencethatreallyshowedmeveryclearlythatIamnotmybody Weproceededtohaveaconversa:onwherehereadmymindandrespondedsoI neveropenedmymouth Feeling[that]wouldbesopowerfullystrongthatitwasalmosttothepointwhere youcouldntwalk Mys:calexperience,divinelight,divineintelligence,theheartwasexploding withlove, Mybodyturnedintoanintensebeamoflight MyheartopenedandIcouldfeeleverybirdandinsectaspartofme Theyhadnoframeworktounderstandwhatwasgoingonandaquantumleapinconsciousnesswastheresult 2014AQALCapital.Allrightsreserved.StrictlyConden:al.5252
  54. 54. THEHEROSJOURNEY:RETURNTOSOCIETYThis[journeywithin]waslikedrinkingoutofabirehose.Inthis area,MITandStanfordBusinessSchoolwerelikedrinkingoutofa birehoseforacademicandbusinessissues.Thiswaslikedrinking outofabirehoseforemotional,spiritualandconsciousnessissues. Weneedboth. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.53 Copyright2010| 53
  55. 55. INVESTORSVALUESSHIFT 2014AQALCapital.Allrightsreserved.StrictlyConden:al.54
  56. 56. Exponen:algrowthworksonthe GOODaswell Thisisouropportunity!2014AQALCapital.Allrightsreserved.StrictlyConden:al.55
  57. 57. OUTCOMESTODAY Demys:fyingthelandscapeofratherconfusedinvestors Understandingthehiddendeterminants,context,andtrends Unleashingthepoweroftheintegralmodelforthebenetofall 2014AQALCapital.Allrightsreserved.StrictlyConden:al.56
  58. 58. THE AQAL APPROACHTHEINTEGRALINVESTINGDUEDILIGENCEMODELANDPROCESS INTEGRALINVESTINGTRADITIONAL INVESTING ProtMetricsAQALInves:ngScreeningProcess IntegralMetrics Interior ExteriorCollec:veIndividuale.g. TRADITIONAL WALLSTREET BANKS AND VENTURECAPITAL FIRMS Prot IMPACT INVESTING SustainabilityMetrics ESG,IRIS,SAMIndividual Consciousness (incl.morals& values) DueDiligenceIndividual& CollecJveGap Analysis& Reporte.g. GRAMEENBANK LGTVENTURE PHILANTHROPY TripleBoAomLine FinancialDD OrganizaJonal, Cultural&Ethical DueDiligence (DD) PlanetSocial,Stakeholder &GovernanceDDPeopleEnvironmentalDDProtIntegralInves:ngisbasedonKenWilbersIntegraltheorythatiswidelyappliedin50disciplinesincludingscience,poli:cs,economics,educa:on,medicine,andbusiness;KenWilberisendorsedbyNobelPrize laureateAlGore,formerUSPresidentBillClinton,formerSecretaryofStateHillaryRodhamClinton,andisalsousedi.e.atMcKinseyandCompany. Source:Wilber,K.(2000).Atheoryofeverything:Anintegralvisionforbusiness,poli5cs,science,andspirituality.Boston:Shambhala.2014AQALCapital.Allrightsreserved.StrictlyConden:al.57
  59. 59. FOUNDATIONAL AQAL METRICSKENWILBERSINTEGRALMODEL Self&Consciousness [SubjecJveExperience]Brain&Organism [ObjecJveBehaviors]I IT8 IntegralSelf 7 Holis:cSelf 6 Sensi:veSelf 5 AchieverSelf 4 MythicSelf 3 EgocentricSelf 2 MagicalSelf 1 Ins:nctualSelf5678SF3 SF2 3 SF1 2 ComplexNeocortex 1 Neocortex(TriuneBrain)4INTERIORINDIVIDUALEXTERIORINDIVIDUALINTERIORCOLLECTIVEEXTERIORCOLLECTIVEArchaic 1 Animis:c-Magical 2 EarlyMythic 3 LateMythic 4 Scien:c-Ra:onal 5 Pluralis:c 6 Holis:c 7 Integral 81WE ITSCulture&Worldview [INTER-SubjecJve]SurvivalClans EthnicTribes 2 FeudalEmpires 3 EarlyNa:ons 4 CorporateStates 5 ValueCommuni:es 6 7Holis:cCommuni:es Integral 8 MeshworksFourquadrant correlates forhumans, alonglinesof increasing complexity Ken Wilbers Integral Model is endorsed by Bill & Hilary Clinton and Applied in 50+ disciplines and organizations including McKinsey and CompanySocialSystem&Environment [INTER-ObjecJve]Source: Wilber, K. (2000). A theory of everything: An integral vision for business, politics, science, and spirituality. Boston: Shambhala. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.58
  60. 60. 2014AQALCapital.Allrightsreserved.StrictlyConden:al.59