Our Nonlinear, Living Systems Investment Approach
Integrating Value-Based Principles
Using our nonlinear, living, complex systems investment approach, we easily integrate fundamental, value-based investment principles. These are built into our living system process. We move beyond the traditional duality that divides the investment world into two groups: impact/sustainable/ESG vs. regular investing.
Embracing Whole Systems Thinking
We believe that taking this whole systems approach is necessary to restore our health, vitality, environment, education system, and overall economic system. This is not an allocation decision, but the natural, organic way our economic and financial systems need to evolve to stay relevant.
Addressing Complexity and Unintended Consequences
There are far too many unintended consequences of using linear processes on nonlinear complex problems. Many existing impact and sustainable investment approaches still use linear frameworks. We’re not inventing something new; nature already has what we need to address these difficult issues.
Overcoming Fear of Change
Considerable fear of chaos and losing control get in the way of efforts to change the status quo. That’s why a conscious, whole system living approach is necessary. The vitality, creativity, and regeneration possible using these principles more than make up for what we lose in the transition.
Adapting to a Changing World
Whether we like it or not, the world is changing, and old systems are falling apart. Following the wisdom of nonlinear systems in nature is the only way we can regenerate our systems across society in more win-win ways. Fortunately, advanced science and technology mirror these natural principles, making analyzing and solving problems much easier.
Evolving Traditional Investment Models
We leverage the positives from core, values-based investment principles learned in the investment management industry while evolving and transitioning old investment models and frameworks that are too rigid for this new paradigm.
Our Disciplined Research and Investment Framework
We use a highly disciplined research and investment framework to analyze and help build essential businesses in society:
1. Analyze more than just financial forecasts
2. Examine overall markets and industries
3. Study evolving trends
4. Meet with industry experts and attend conferences
5. Maintain humility and openness to new information
6. Proactively gather information
7. Study people, business strategy, and financials
8. Assess barriers to entry and business risks from multiple perspectives
Key Investment Principles
– Follow our process and stay disciplined
– Invest for the longer term with patience
– Invest early, following new industry trends
– Invest before or just after new product rollouts
Understanding Our Investment Process
Our system-based framework helps us better understand the problems we’re solving and ideas about how to solve them. We screen public and private investments from this perspective and are rigorous in our post-initial screens analysis.
Managing Risks and Communicating with Investors
We use this disciplined investment process to find the best opportunities for resilient returns while managing various risks inherent in investing in small, growing businesses. We regularly follow all our investments and communicate this information to our investors.
Admitting Mistakes and Finding Solutions
We admit when we make mistakes and come up with tangible solutions as efficiently as possible, even if it means selling investments and deciding not to continue investing in a particular company.
Our Detailed Research Approach
• Proactive, bottom-up research using all available resources, including expert advisors, industry conferences, and literature searches
• Active identification of promising global opportunities for public and private investment offerings
• Assessment of:
– Clinical/scientific data quality and technology validation
– Management teams’ execution abilities and resource management
– Industry and product market size potential
– Barriers to entry (e.g., competition, patents, innovative manufacturing)
– Customer feedback and strategic partnerships
– Investment and resource requirements over time
– Potential gaps in business, technical, and necessary resources
– Market and company-specific risks
– Alignment with physical laws of nature
– Operating, financial, and valuation details
• Early identification of critical new industry and company-specific trends
• Exploration of ways to address resource gaps through advisors, consultants, and investor club members