GRI Equity
private equity investment in sustainable businesses

This presentation discusses our business. Coverage includes

the background to globally responsible initiatives

an introduction to the research supporting a GRI market opportunity

a description of the fund structure

a description of management methods and people

an invitation to invest with us.

PLEASE NOTE that this presentation merely substitutes for an introduction and no further import should be implied. Please contact Info@GRIEquity.com to express interest. Thank you.

Contents – Quick Guide

P. 3	Background to sustainability.

P. 5	Executive Summary

P. 8	Market Opportunity

P. 17	Business structure, policy, terms and economics.

P. 38	Management methods and team.

P. 66	Conclusion

P. 69	End

Globally responsible initiative is quickly changing
physical, intellectual and ethical spheres.

Background

GR Markets

Market systems (like nature) work better than command systems.

Systems must be reactive and flexible ... neural

Market improved by reducing transaction costs especially by

Good information

Fair rules

Self sustaining – lower externalities/pollution incl. Physical, intellectual, ethical.

Sustainable businesses grow faster, with lower risk.

Multi-sector trend to sustainable solutions. Public and private institutions responding to sustainable consumer culture.

3% global assets managed, fast growth, proven outperformance, demanded by WorldBank et al..

GEO 1, 2, 3, WRI, Earth Charter, Rio, Kyoto, Jo'burg, Evian Group

Success requires:

Value for money

Transparency/Disclosure (self audit)

Cooperation And knowing what to look for ... GRI Equity

Why we target sustainable business and why now.

High growth of markets for sustainable goods, services and systems.

Rapid substitution to sustainable solutions including eco/ethical tech.

Attractive investment returns available

Target markets' consumer profile improves risk/return profile

Demonstrable opportunities and dealflow across sectors and globally.

Attractive returns indicated by ethical and SRI funds.

The time is right.

GRI Equity's structure and operations uniquely support success.

Stakeholders interests aligned: self managed venture capital holding company for globally responsible asset management.

Committed team with appropriate skills, experience and attitude

WBEM systems use leading edge technology to lower IT overheads significantly and increase IT productivity (a proven high output distributed knowledge system).

Executive
Summary

GRI Equity has sustainable competitive advantages.

Clear holding structure aligns interests of all stakeholders:
investors, managers, holdings ...

Self managed fund: manager owned by the fund.

Performance fees/bonus paid in fund equity.

IT infrastructure overhead low and productivity high

Economic space costs, distributed knowledge resources.

Investment process internally consistent with investment policy.

Self audit with full transparency at board level.

Distinct investment focus: businesses demonstrating sustainable commercial success – built upon globally responsible initiatives

Wide diversification available: wide policy for sector, geography, stage etc.

GRI competitive advantage demonstrated.

Business managers that can build sustainable businesses are in great demand.

Executive
Summary

The Investment Opportunity

GRI Equity: Industry, Structure, Policies, Terms, Economics

GRI Equity's Operations and Team

Contents

Investment Opportunity

Rising tide of responsible consumption is changing markets.

New standards and laws of governance, environment and social respect are challenging asset and business managers to raise minimum performance.

Traditional managers are inexperienced in considering qualitative benchmarks.

Traditional methods have difficulty combining qualitative evaluations with traditional financial screens.

Target market of sustainably successful businesses offers an attractive risk/return profile.

GR offers better risk return profile, driven by high consumers and its available now.

Sustainable technology is becoming mainstream.

Sustainable industrial, commercial and domestic technologies allow more efficient use of resources in a wide variety of applications.

Micro power, organic foods, biofuels and bio-lubricants, bio-cosmetics, eco-cleaners

Energy: Cleaner, renewable energy is expected to be mainstream within a decade or so.

Business examples:
Ballard, Vestas, Veggie Van, BP and Shell R&D/marketing

IT and communication technology enabling rapid efficient technology transfer and development.

Low cost computing, Linux, Mozilla, OpenOffice, telcom costs ...

Siemens WBEM savings, ITDG ...

Opportunity

Technology

Sustainable economics are driving markets and regulations.

Economic systems now pricing natural resources and systems.

Destruction of natural capital being reflected in market prices. Carbon pricing, pollution taxes/fines ...

Natural resource prices increasing reflecting scarcity. Human made capital (including technology) is relatively less valuable.

Scientific recognition of the limits of natural systems and the interdependencies between nature and human produced systems

Visible examples like organic food availability, pacifism, technology price.

Access to affordable enabling technology has spawned many sustainable alternatives.

Pricing of non-renewable materials increasing. Demand for renewable materials increasing. New infrastructure uses sustainable alternatives.

Noospherical consumer groups are facilitating rapid substitution.

SustainableBusiness.com, OrganicConsumers, ChaordicCommons, GrameenFoundation ...

Rapid disemination of product/business value/performance/price information using www.

Opportunity

Economics

Ethics increasingly a key economic driver.

Regulation of industrial and consumer markets demands environmentally and socially responsible behaviour.

Carbon pricing, Rio/Kyoto/Jo'burg, German Green coalition, Earth Charter ...

Risk profile influenced by systemic ethics. Ethical track record used to standardise expected return.

Particular responsibility of financial markets.

E.g. businesses failing to be ethical: AA, Enron, WorldCom, Tyco ...

E.g. Fiduciaries focusing on GR market: Dexia, Morley, Triodos, Coop ...

E.g. Institutional initiatives: IMF, Evian Group, DJSI, FTSE4Good ...

Opportunity

Governance

The target market growth is attractive.

All SIC sectors moving to sustainable paradigm pulled by consumer demand for “value for money” goods, services, track record.

High Market Growth

Examples: organic market growth >30% pa, alternative energy systems growth >30% pa, ...

Growth of ethical funds above average. Indicative returns above average.

The inherent demand among the highest consumers is for interdependence with the natural world.

“More than 80% of the Americans polled in public opinion surveys agree that
‘protecting the environment is so important that requirements and standards can not be too high and continuing environmental improvements must be made regardless of cost’.”
from Environmental Science - a global concern, by WCB/McGraw-Hill, 2000

Opportunity

Market

Big changes are all about us!

Opportunity

Market

Demonstrating against US in Indonesia with NY Yankees cap!

GRI consumers are young at heart, educated and plugged in! ... Like GRI Equity.

Demand is driven by individuals, NOT rulers, prime ministers, CEOs ...

Micro-technology, global access and efficiencies allow individual access to opportunities.

Attractive opportunities in many areas: software and other IT, food, materials, eco-clean, bio-care, ...

Growth markets are driven by high consumers whose demand is shifting from convenience solutions to appropriate, considerate solutions. They are

young (at heart) - enthusiasm to conserve, reuse, recycle etc. Subscribe to “do to others what you want them to do to you”philosophy.

educated - understand complex resource allocation issues locally and globally

use the noosphere – media, www etc for efficient, effective access to sustainable alternatives.

Frustrated – tired of failure to disclose by incumbent suppliers

– Nike, Reebok, McDonalds, Enron, WorldCom, Eircom, 3 Gorges, government.

Opportunity

GR Consumers

Normal indicators tell us that substitution to sustainable alternatives is taking off.

Size of Globally Responsible Segment

Eg
UK SR only funds:
Total ~$3billion, SOM 3%,
growth high,
ROI competitive.

Time

2000

2020

The company’s first investment cycle.

Business risk is diversified by sector, geography, etc.

Liquidity
Events

Holding
Period

Investment Period

Opportunity

Timing

The target market offers exciting and attractive opportunities.

Confluence of factors that make industrial and consumer LOHAS* market growth powerful.

Intrinsic growth.

Rapid substitution.

Growth of opportunities.

Cooperative economic model offers attractive risk/return profile.

Lower transaction costs and enterprise goodwill principally based on work ethic, not brand, technology premia, goodwill etc.

The market is in its high growth phase.

Public awareness of medical, ecological, political and economic globalisation issues.

Rapid substitution driven by cheap technology.

*Lifestyle Of Health And Sustainability

Opportunity

Conclusion

The Business

Asset Management Industry Review

GRI Equity: Objective, structure and systems

Investment policy

Terms

Economics

GRI Equity's business is to achieve superior returns by applying sustainable business principles.

Invest in a selected portfolio of globally responsible businesses

Investing long term equity linked capital to private businesses eg organic, alternative energy, eco-materials, education/training, tele-business, chaordic systems.

Cash management applies funds to value investment in listed businesses eg Odwalla, Vestas, Triodos

Achieve net returns to investors of over 15% per annum (2x investment in 5 years).

Investment to achieve attractive returns by investing in innovative well run businesses satisfying growing market demand.

Control risks through application of financial and management techniques including screening.

Control costs through use of modern management methods and technology.

Manage resources to leverage its own activities and those of its partners.

Non-cash benefits accrue to GRI Equity stakeholders: business method, network, technology.

Responsible investment engagement with holdings through monitoring and advisory activities.

Responsible community engagement built in to business policies and culture.

GRI Equity

Business

Asset managers leverage massive influence over global trends through asset allocation and timing decisions.

Capital market size estimated to be over $ 100 trillion.

~ $ 80 trillion in 1998.

World GDP ~ $ 27 trillion (of which G7 ~ $ 19 tril), World trade ~ $ 5 tril, daily FX TO~ $ 3 tril.

Players use debt and equity linked securities. Derivatives used to acquire and sell risk.

Liquidity highest in currencies (turnover > $ 2 trillion per day globally); private equity market relatively illiquid relying on negotiated transactions.

Investment management is the principal influence on economic development.

Decisions over many individuals' assets (eg pensions, deposits etc) concentrated in the hands of relatively few managers (via intermediaries like banks and pension companies).

Intermediaries (long term financial institutions) being driven to globally responsible policies by customer demand (savers demanding ethics) and by regulation (governance).

Decision stakeholders include regulators, incumbents, public asset allocators, private investment managers, entrepreneurs, private investors, and, most importantly, individual savers.

GRI Equity

Investment Industry

New competitive challenges for managers since the asset bubble burst in 2000, including private equity.

Source: 3i, PWCMoneyTree.

GRI Equity

Investment Industry

IT benefited most from the bubble, growing over 2x faster than other sectors - all now below 1998 levels.

Source: PWC MoneyTree

GRI Equity

Investment Industry

Private investment and venture capital managers under particular pressure.

Majority of incumbents suffering from depreciated portfolios.

Massive investment during 1999 – 2001 at unsustainable prices.

Raised funds without sufficient rigour in due diligence on their own opportunity, because investors were chasing an economic bubble.

Now demanding over-aggressive pricing to improve portfolios.
Valuation methodology confused by vested interests.

Managers using short term investment strategies for (long term) private opportunities.

Pressured by investors demanding aggressive short term performance and more opportunities.

Participants lack experience in down-market.

Rapid expansion of private equity management industry brought in new inexperienced managers, lowering the overall standard of competence.

Players have not addressed challenges of higher minimum standards of governance, environment etc and thus have skill and experience gaps to be filled.

GRI Equity

Investment Industry

Governance, environment and ethical audits are rapidly becoming minimum standards, demanded by investors.

Governments adopting broader benchmarks eg Calvert-Henderson Quality of Life Indicators.

Globally responsible investment market is a large, well established sector, growing fast (30% pa).

USA*: Total socially responsible investments

$40 billion in 1984, $639 billion in 1995, $2 trillion in 1999; CAGR = 30% pa.

~ 13 % of estimated $16.3 trillion under professional management.

Incumbents adopting sustainable principles and products ...

Dexia, Societe Generale, Morley, ISIS, Henderson,

DJSI, FTSE4Good,

Specialists have been established upon sustainable principles during last 2 decades.

SAM, Domini, Trillium, Impax, Calvert, Temima, GRI Equity

Triodos, Cooperative Bank

Sustainable Business, Evian Group

* Social Investment Forum report 1999.

GRI Equity

Investment Industry

Demanded by customers and fiduciaries (pensions, banks etc), managers must adopt non-financial screens.

Accepted financial benchmarks: GAAP, Euro GAAP, AACCP, ...

The Global Reporting Initiative (unrelated to GRI Equity)

a framework for reporting corporate economic, environmental, and social performance.

The Sustainable Investment Research International (SiRi) template for profiling the sustainability of companies around the world.

Portfolio Advisers Screening Service PASS

provides a snapshot of a company’s social and environmental performance.

KLD Research & Analytics, Inc. developed an offshoot of its SOCRATES rating system.

Can be used to build portfolios according to client interests.

Social Return on Investment (SROI) in monetary terms

The Roberts Enterprise Development Fund (REDF)

Used for non-profit businesses and may be adapted for all.

Gaining recognition, two prominent business schools have attributed enough importance to SROI to include it as one of three criteria for winning a venture capital contest.

GRI Equity

Investment Industry

Sustainable, ethical or socially responsible asset managers are establishing themselves quickly.

Triodos Venture Capital

Established by the anthroposphic bank, building upon micro-credit experiences

$ 25 million fund fully invested in 2 years.

Sustainable Asset Management (CH)

manages 5 listed funds (~ $ 100 mil) and about $ 90 mil in private equity. Produces DJSI.

Investors include Gerling insurance, Storebrand, Swiss Re, Victoria/Ergo, ING Group.

Impax (UK)

Corporate finance and Asset Management. GR index published.

Best-practice SRI managers include Henderson/NPI (UK), Storebrand Asset Management (Norway), Trillium Asset Management (USA). (From Sweden’s Foundation for Strategic Environmental Research (MISTRA) commissioned report.)

GRI Equity

Investment Industry

The three most popular issues raised by US shareowners of funds in 2002 were human, social and health, not return.

Adopting International Labor Organization (ILO) standards;

Linking executive pay to social and/or environmental criteria; and

Phasing out, labeling, or reporting to shareowners on genetically engineered food products.

GRI Equity

Investment Industry

GRI Equity's strategy and operations demonstrate authentic fit with the high growth GR market.

Responsible global resource management is increasingly required by regulation and consumers.

Customers loyal, value for money, all costs accounted, sustainable offering.

Not arms/military - self policing & global watch; habilitation of value laggards.

Not nuclear power (cost > benefit today!) or fossil fuels (eco-cost > benefit).

Business strategy and systems demonstrate globally responsible initiative.

Investment timing suits medium term economic cycles, that is, now. Investment horizon avoids short term volatility.

Micro-industrial infrastructure maintains congruence of cost and benefit within local communities.

Open and secure network (LNX, MZ, OO) WBEM lowers overhead, raises flexibility.

GRI Equity

Investment Industry

The Company agreements maintain congruence between investors’ and management’s objectives.

The Board represents investors and controls the Fund and Manager.

Management fees competitive and surplus vests with investors not management company.

marginal fee of 1.0% for Committed Funds over US$ 50 million.

Incentive paid in shares of GRI Equity - economic and emotional objectives same for investors and executives.

No “performance fee”. Shares available for purchase by all employees.

Size sufficient to maintain efficient operating cost structure $ 25 m per manager.

Immediate investment in preselected opportunities.

Distributions after realisation of unlisted investments.

GRI Equity

Agreement

Corporate structure provides coherence between management's and investors’ interests.

Astraea

GRI Equity

OLC*

SIV
Investor

Investor

GRI Equity Management

Holding

Holding

SIV

Holding

Holding

100%

100%

*Offshore Limited Company

GRI Equity

Structure

Investors’ and management’s goals and incentives are congruent.

Offshore investment holding company, self-managed by 100% owned subsidiary.

Equality of opportunity for global investors (tax transparent)- matches global management trends.

Investment strategy may be adjusted to suit changing market conditions by the board.

GRI Equity's Board, representing investors, controls The Fund and The Manager.

The Board is the primary vehicle through which investors monitor the Manager and Administrator.

Quarterly and audited annual shareholder reports.

Board reviews annual valuations of unlisted investments

Board monitors application of the Investment Policy.

Board monitors conflicts of interest.

Members of the Board are linked to the WBEM system. It also meets at least once a year.

The Manager and members of the Investment Committee will normally be invited to attend.

GRI Equity

Structure

Integrated, coherent internal structure aligns interests. The Board, representing investors, controls GRI Equity.

GRI Equity OLC*

GRI Equity Management

Advisory Committee

Investment Team

Investment Committee

Board

Contractual arrangements with

Legal, Accounting, Research, Admin, Compliance, ...

GRI Equity linked through the Web to network of associates and with access to potential partners.

Investors direct GRI Equity and monitor the Manager and Administrator via the Board.

Quarterly and audited annual shareholder reports.

Board reviews annual valuations of unlisted investments

Board monitors application of the Investment Policy.

Board monitors conflicts of interest.

Investors have access to Web network.

GRI Equity

Structure

WBEM operations efficiently leverages team resources and lowers overheads.

Team based infrastructure and systems.

Partnership resources leveraged

Internally audited/monitored processes.

Lower IT, support, distribution costs.

Manager
(Europe)

Manager
(North
America)

Manager

(Asia)

WWW &
intranet

Public

Investors

Partners

Holdings

Subcontractors
(legal, admin, research etc)

GRI Equity

Systems

GRI Equity systems are congruent with the market opportunity.

Team incentives/culture match demands of globally responsible management.

Work environment and rewards reflect cooperative policies and extracurricular demands.

Executive and other employee equity (including premium compensation) vested alongside shareholders’.

Management culture congruent with that of Holdings.

Team committed to GRI management implementation.

Improves communication at all stages of investment management.

Facilitates liquidation execution.

Distributed knowledge linked by web based IT reflect efficient chaordic management methods.

GRI Equity

Systems

The investment policy is to be inclusive, screening for management and sustainable success factors

Target business demonstrates globally responsible initiative.

Industry screen broad, preference to consumption reduction.

Few restrictions: No arms/military. No nuclear. No human rights abuse.

Principal deal flow expected in energy, transport, IT, food, home and household, education, leisure.

Size of private investments expected to be $ 0.5 m to $ 5 m (per holding) for a minority stake.

Geographic focus is unrestricted, though larger markets predominate dealflow.

Deal flow, ranked by market size, likely to be North America, Europe, Asia.

Targets must be accessible for review, monitoring, general business pragmatism.

Stage of investment broad

Principal deal flow in product or market development, stage change (eg family to professional) and business combination (JV, partnerships, M&A).

< 20% in seed/startup, < 50% in listed (after year 3), likely to have private characteristics.

Other policies to guide fund diversification.

<25% per country, <25% per sector, < 12.5% per Holding

GRI Equity

Policy

Superior expected return/risk profile underpinned by investment policy and targeting sustainable businesses.

Equity linked investment, plus senior management and finance resources.

Offer finance; fill funding gap.

Leverage non-financial resources.

Critical selection of teams and technology.

Investment policy seeks broad risk diversification.

Risk management: High risk diversification possible through global (vs local) perspective, long term, flexible investment horizon (timing)

Global geographic policy and broad industrial policy to keep opportunities accessible.

Flexible investment tenor at various stages of business development matching optimum gestation period of businesses. Investment horizon avoids short term price volatility and benefits from timing to suit medium term industrial cycles.

Stage/size of investments captures market opportunity.

Added benefits from targeting sustainable businesses.

Benefits from growth of market, enterprise and valuation multiple.

Lower transaction costs

Pricing and valuation attainable

GRI Equity

Policy

The Fund size at launch to be ~US$ 30 million.

GRI Equity:offshore limited company managed by wholly owned subsidiary.

Minimum total Committed Funds to be [US$ 20 million]. Committed Funds are intended to be US$ 30 million.

Commitments will be in units of US$ 50,000, with a minimum of US$ 250,000 (subject to adjustment at the discretion of the Board).

The Sponsor has made a total commitment of [US$ 150,000 ] to The Fund.

Realisations to be distributed as soon as practicable.

Subject to a minimum distribution of US$ 250,000 in aggregate and to capital invested being retained for reinvestment for 5 years from Closing Date at the Manager's option.

GRI Equity

Terms

Fees are very competitive and provide for integrated executive incentive compensation.

Management fees competitive. Surplus reinvested in the Fund.

Commitments	Fee

US$ 15,000,000 – 25,000,000	2.0%

US$ 25,000,001 – 50,000,000	1.5%

Over US$ 50,000,000	1.0%

A performance fee will not be payable.

Vested interest incentive from executive compensation being partly in shares of the Fund.

The Fund will also make available shares for purchase by all staff of The Manager.

Other fees:

Establishment Costs: At First Closing, The Manager is to be paid a fee of US$ [250,000] by The Fund to reimburse the costs of the formation of The Fund and the issue of the Securities, including the Manager's costs, legal, professional and other fees. The majority of this fee will be paid out to third parties who may or may not be associates of The Fund.

Placement agent fees will not be paid by The Fund.

Administration fees of [ ..%] will be payable by the Fund.

Custodian fees will be payable by the Fund.

GRI Equity

Terms

Sound business economics offers attractive expected returns
and lower cost structure.

GRI Equity

Economics

Pro forma projections

Summary numbers

The Manager

Business model and investment management process

Team

Our approach to asset management matches globally responsible management principles.

Objectives congruent with globally responsible management objectives and practices.

Enhanced credibility with investors, holdings and partners.

Inherently sustainable

Technology used to share and efficiently leverage resources.

WWW, Mozilla, Open Office, mobile phone, computing power cost.

Demonstrated track record of commitment to principles.
Investment style builds goodwill and technology resources – virtuous feedback.

GRI Equity

Business Model

Our direct investment process combines experience, hands-on diligence and international standards.

Soft and hard target selection and management techniques.

quantitative market research and benchmarking

company visits,

systematic monitoring and reporting.

International financial standards reflect global management policy and ethical/social standards.

Executives manage process and relationships appropriately.

self reliant distributed people

appropriate skills, industrial and international experience

backed by emotional and economic commitment.

GRI Equity

Business Model

Pragmatic risk management

Facilitates the investment process.

Improves synergy between investor and holdings

Engenders circles of excellence.

Attractive return on investment.

Expected return

Risk

Managing the risks optimises returns.

Seek the efficient frontier.

GRI Equity

Business Methods

GRI Equity's dealflow is encouraging.

Current deal flow is encouraging.

Prior to fund launch we see about 2 per week.

Attractive opportunities are currently under review. Syndication has been sought by other managers.

Normal deal flow from industry links (latent pre-launch)

Association links and other private equity managers

Banks and investment banks.

Professional services: accountants, lawyers, consultants etc.

Industry

Web marketing provides additional pre-screened flow at low cost (ongoing)

Key word search reactive website.

Application forms provides criteria preselection.

GRI Equity

Deal Flow

GRI Equity operations are rigorous yet flexible: the process is guided and monitored; risks are qualified and quantified.

GRI Equity

Investment Process

Opportunity Screen

*Deal flow from industry, Web and GRI's network.

*Screen to check within investment policy.

*Screen for attractive businesses.

*Notify investment committee.

Business Review
*Strategic and financial review (screens):

Assess market, management, technology, operations, financials.

*Develop relationship and mutual understanding.
*Clarify the deal.

*Investment committee recommendation.

Invest

*Due diligence – financial, legal, technology, market etc

*Documentation

*Approval by manager, then investment committee.

*Investment – NB conditions precedent/ subsequent.

Advise and Exit

*Monitor business vs business plan and market.

*Strategic input.

*Financial support.

*Investment banking advice.

*Exits

Investment Research

Screens: policy, due diligence, diagnostic, env/soc/gov, etc

Management track record

Business/market opportunity

Financials

Competitive advantages.

Risks' identification

Deal: Price vs Value

Basic Criteria

GRI

Stage, size, sector screen.

Possibility of deal?

The Deal

Congruent objectives

Price and security

Conditions

Documentation necessary

Investment selection process is refined to effectively evaluate opportunities.

Early screening ... Clarify opportunity ... Verification and

Documentation

GRI Equity

Investment Process

Deal flow reports track deal statistics and enhance internal and external communication.

Weekly Report:
Company / Business / Status / Size

Monitor progress

Discuss action

Update relevant executives

Inform committees

Historical Report:
Company / Sector / Business / Stage / Geography / Size / Source

Internal record of deal flow.

Monitor type of dealflow.

Reference for new deals.

Reapproach principals.

GRI Equity

Deal Flow

Proven value chain based analysis coherently integrates comprehensive financial review with other analysis.

GRI Equity

Screening

NB: Management screen applied throughout organisation. Centralised management is considered a risk to growth and competitive flexibility. Confidentiality to be maintained through culture.

Communications: WBEM, IT, education (internal and external)

Administration: policy and monitoring of environment, regulations.

Finance: efficient and fair, performance, giving/sharing

HR: flat comp structure, good relations, family benefits, training, community, safety

Competition:

ability
history of bullying
culture of coop

Product or service:

value for money, fitness for use, renewable resource consumption, GRI technology

NOT military or nuclear

Customers: approrptiate profile available

Production:

technology commitment, value chain positioning (inc. make vs buy),

local sourcing, renewable/self made supplies, efficiency, pollution, reuse/recycle.

Distribution and Service:

efficiency, ethics, low transport, PR

Marketing and Sales: appropriateness,

ethics, efficiency

Target management selection is key:
they must be suited to the business plan.

Skills required to build sustainably successful business should be in house.

Include personal communication, analysis, cross-cultural, professional

The team should be resilient and flexible.

No one person irreplaceable.

Individuals able to back up one another.

Career track record should demonstrate consistent goals and performance.

References. Achievements.

Experience should include operational and executive roles.

Multi functional

industry, stage, geography.

Management objectives should match the Fund’s.

Energy of management should not be waning.

GRI Equity

Screening

We use several screens, but do not rely on any one.

Initial screen

Strategic review

Product and technology

Market size, growth, competitive landscape

Operations, competitive strengths and weaknesses

Financial review

Historical review, proforma projections, sensitivity analysis, scenario analysis, risk evaluation.

Stakeholder Impact Review

governance, social, environment

Diagnostic template

Benchmarks the business evolution, strengths and weaknesses across strategic and financial dimensions.

Due diligence checklist

All screens are signed off by the individual responsible for the transaction and circulated among the investment committee.

GRI Equity

Screening

We understand needs based on past performance, strategy and market conditions.

Substitutes

Past establishment and other milestones

Company Name:________________________

Business:______________________________

Present Current production base, JVs etc

Future growth plans

Product Substitutes

Manufacturer Substitutes

New Entrants/Barrier to Entry Economies of scale, capital required, customer switching costs, access to distribution channels, product differentiation, cost advantages etc

Customers main customers, % of sales, market shares, geographic breakdown.

Suppliers local/import, number of suppliers, % of costs, buyer strengths.

Competition/Key Factors Key factors for success and does the company have them.

Date:

Strategic Analysis

GRI Equity

Screening

Our Diagnostic Review benchmarks business development and clarifies issues to be addressed further.

Chart illustrates development of businesses to stages of seed, startup, product development, market development.

Most private companies that we review should be at product or market development stage or re-evolving.

The review questionnaire covers over 130 items in 12 categories shown on the chart.

GRI Equity

Screening

Governance, environment, social reviews are considered in parallel and used to evaluate risk.

Screen includes prohibited activities and broad checklist.

At a minimum, avoid investing in business which contravene governance, environmental or social regulations or significantly contributes to degradation.

The impacts may be on

Physical resource (topography, soils, water, geology),

ecological resources (flora and fauna),

human and economic development (population, infrastructure, land use, energy, agriculture, tourism etc) and

quality of life (socio-economic values, health, culture etc).

Identify laggards and innovators of strategic and operational policy and systems that enhance efficiency, stakeholder welfare and reduce costs.

GRI Equity

Screening

Financial analysis ties various screens together, quantifying operations analysis and testing assumptions.

GRI Equity

Screening

Financial
Projections

Income statement or P & L
Balance sheet

Cash flow

Margins, growth,
capital structure,

equity performance

Financial

Analysis

(Summary template shown)

The selection criteria key:
evaluate quality as well as quantity

Consider operating benchmarks (governance, ISO, HR turnover, customer service etc) as well as financial and economic benchmarks.

A well resourced management team.

a relevant track record - industrial and professional

demonstrated skills and competencies

understanding of global management issues

IT and general technology literacy.

A business proposition that is distinctive and commercially attractive.

Demonstrated globally responsible initiative.

GRI Equity

Screening

Investment requires verification performed by third party professionals.

Review of the business reveals to entrepreneur and investor issues to be addressed in greater detail.

We use professionals to examine issues of accounting, law, new market analysis, new product or technology etc.

Normally audit and legal reviews are a matter of course eg:

Accounts: review audited accounts, examine working capital and related party accounts, coherence of projections, accounting systems, funding arrangements, contingent liabilities etc.

Legal: corporate structure and ownership, possession of assets, liens, law suits, professional contracts, contracted and contingent obligations, related parties etc.

GRI Equity

Verification

And documentation to clarify and formalise arrangements.

Documentation describes the rights and obligations of parties in the transaction.

It describes the price and payment terms of the transaction.

Director's declarations are required.

It includes representations and warranties by the vendors that they have described the business appropriately and no material omission or facts have been made.

It will include a subscription agreement and shareholders agreement.

GRI Equity

Documentation

Advisory

Financial analysis and
performance appraisal.

Vested interest at board level
of holdings with no executive
interest and broad perspective.

Business planning, including
technology plan and financial plan.

Access to research and experience.

Monitoring

Are conditions for investment being met?

Ongoing valuation and performance appraisal (reports).

Problem identification.

Exit opportunity.

Value may be added through the monitoring and advisory role of the Manager.

Post investment monitoring ... and advice

GRI Equity

Advisory

Monitoring identifies problems early. Working with partners, innovative thinking and technology are key to solving them.

Conditions subsequent not met in a timely manner

(don’t accept excuses at face value).

Projections/budgets not met.

Sales, Gross Margin, Operation Margin, Net Margin missed.

Delays in financial information.

Artificial numbers: inflated sales, inflated profits, costing wrong.

Balance sheet movement: Accounts Receivable or Inventory build up.

Quality problems.

Requiring more capital - working capital, fixed capital, marketing.

Changes in key personnel, auditors, lawyers or high staff turnover.

GRI Equity

Advisory

In dealing with problems we act fast and focus on cash

We identify problems and solutions

We identify who controls the situation

investors, shareholders, management, customers, suppliers, bank.

We get involved. Make everyone realise that there’s a challenge. Agree the technical issues and compromise on cultural issues.

Act!

cut costs, increase prices, increase payables, decrease receivables, reduce inventory, fire management, sell marginal assets, refinance debt, due diligence again (agreements, suppliers, customers, employees, costs).

And obtain feedback.

GRI Equity

Advisory

Our experience is in challenging situations:
new tech/prod/mkt, private, family, international, fast growth. ... Always with others' in mind.

Corporate: succession, exit.

Growing local: expanding assets and headcount, range, distribution.

People: culture changes, family differences, different views, generational differences.

Growing international: ethnocentricity, experience of competitive market limited.

Growing management: creativity and communication, discipline, ethics, responsibility and power.

GRI Equity

Advisory

Exit management is key to realising returns.

Raise alternatives to IPO early on. Objective is to exit investment for both the Fund and the Holding.

Diversify risk by enabling alternative realisation mechanisms.

Ensure that Holding management is committed and involved.

Market Holding in good time for planned exit.

React to unexpected opportunity for realisation.

GRI Equity

Exit

GRI Equity, skilled and experienced, has your assets, interests and objectives in mind, as a matter of course.

Experience

entrepreneurship,

venture capital,

finance,

general management,

primary, secondary and tertiary sectors,

international,

Skills:

communication (people skills),

Analysis,

finance/accounting/legal,

Market/industry,

legal.

Energy and commitment.

Demonstrated GRI and successes in our fields.

GRI Equity

Team

The strength of our network comes from the congruence of objectives of people in the network (eg LOHAS).

People we know are part of our due diligence network.

Further industrial, financial reference.

Offering independent feedback for the Manager

Comment on application of investment policy.

Advise on conflicts of interest.

And possibly director roles and marketing/operational advice.

LOHAS stands for lifestyles of health and sustainability. It is one of many reference points that increasingly well informed consumers click to!

GRI Equity

Team

Tom Butler is the main person to contact with inquiries.

Thomas Butler managing director

Investor - manager of $25 million vc fund (4 years), $40 million vc fund (4 years), raised and managed $ 25 million ($ 40 million target) fund (3 years) (total 5 years - overlap).

Entrepreneur – organic farm, rural accommodation, fishing, SCA, equitation, livery, education/ technology transfer, restaurant catering and others.

MBA IMD, BSc Wharton, certified organic producer, finance lecturer, IT hack, windsurfer.

Non-executive directors are involved in investment or strategic decisions.

Michael Polkinghorne Director, partner Coudert Brothers, Joint Head Global Arbitration

Gert Jan van Soest Director. Investor/entrepreneur in leisure businesses. CEO Heineken NV 1990-1992

Friends & Advisors with a broad range of business, technology and finance skills, may be involved in specific reviews or transactions.

GRI Equity

Team

Thanks to these people who have obliged with assistance and support and made significant resources available.

Roger Marshall, Anne Marshall, Kathleen Ng, Christine Loh, Eoghan O'Lionaird, Howard Jenkinson, Caitriona Shanhan, Pamela Butler, Sir Richard Butler, Justin Mundy, Rachel Crossley, Arjun Luthra, David Beim, Elizabeth Beim, Elizabeth Handy, Charles Handy, Svante Pahlsson Moller, Marc van Strydonck, Lucie Heskett-Brem, Kitisak Sriprasert, Alexander Schwedeler, Alex Shaw, Patrick Butler ...

GRI Equity

Team

Please respect all people's privacy. Thank you.

Conclusion

Attractive investment opportunity available now.

Investment structure, terms and approach geared to optimise opportunity.

Business model geared to optimise opportunity.

Team selected to realise opportunity.

Confluence of these ingredients rare.

Contact us. See next page.

GRI Equity

A Great Opportunity

Investors, entrepreneurs and business managers
contact us on info@GRIEquity.com

If you are an investor ...

Please contact Tom Butler on info@GRIEquity.com to discuss your requirements.

Prospectus available on www.GRIEquity.com. Access requires a password available by email.

If you are an entrepreneur ...

Please contact Tom Butler on info@GRIEquity.com to discuss your requirements.

Much information is available from browsing the website www.GRIEquity.com

To discuss raising money for your business or exiting your business, please contact us immediately. Terms are indicated on the website www.GRIEquity.com.

Thank you.

GRI Equity

Contact Us

“putting our money where our world is”

GRI Equity

TPButler

2001-01-30T16:24:38