Monterey Bay, California
+1 831-761-0700
info@in3capital.net

What In3 does *NOT* provide

Inspire | Innovate | Invest

What We Won’t Do

Sometimes it can be helpful to eliminate certain ideas to help focus and avoid wasting time.

Here’s a list of what In3 generally does not offer to sharpen your understanding of what we do. These are not hard-and-fast rules, but more like guidelines; exceptions can and do sometimes occur, but first understand why we simply do not fund certain activities:  our attention must go toward delivering more than just money.  Some sectors need to be phased out in favor of more sustainable ones.

This is both practical, because “unsustainable” commercial activities face risks that impact projects do not, such as the promoters being held to account for the “unintended consequences” of their activities, sooner rather than later, as well as ethical, as there is money to be made with “virtuous” activities that help deliver value over time, in some cases, achieving the Sustainable Development Goals (more on In3’s investments strategy).  We can work with transitional plans that move away from activities that use up limited resources, those that make waste with “no place to go” or that degrade ecosystems or soils that support life.

In3’s Industry Focus is to “do no harm” and, even better, have a positive social and/or environmental impact:

  • Accordingly, we will not work in certain industries such as extractive ones (conflict diamonds, most mining, petroleum-based endeavors, such as Oil & Gas, coal, shale gas (fracking), including supply chain, exploration, production … and absolutely not if located in protected habitat), or involving chemically-intensive agriculture, tobacco products, weapons, unsafe, unethical or illegal activities.
  • We do not get involved with any activities that will likely cause irreparable harm to the environment, or that treat workers with disrespect (note: many or most sources of development finance will also take issue with such practices, so if this is part of how your business will operate, please disclose this as a known issue so we can explore possible solutions, or reconsider the entire approach).  Specific examples of what’s not allowed or supported:
    • Production or activities involving harmful or exploitative forms of forced labor, or harmful child labor, or practices that are discriminatory or prevent employees from freely exercising their right to association and collective bargaining.
    • Production or trade in any product or activity deemed illegal under host country laws or regulations or ratified international conventions and agreements.
    • Production or trade in weapons and munitions.
    • Production or trade in tobacco, gambling, casinos, and other similar activities.
    • Trade in endangered species of wildlife or wildlife products regulated under CITES, or products derived thereof.
    • Restricted materials:  Production or trade in radioactive materials, in or use of unbonded asbestos fibers, in wood or other forestry products from forests that lack sustainable management, in nanomaterials not known to be safe.
    • Plantation projects that would require the removal of existing non‐degraded natural forest.
    • Production or trade in products containing PCBs.
    • Production, trade, storage, or transport of significant volumes of hazardous chemicals,
      or commercial scale usage of hazardous chemicals.
    • Transboundary trade in waste or waste products, except for non‐hazardous waste destined for conversion or recycling.
    • Production or trade in pharmaceuticals, pesticides/herbicides, or persistent organic pollutants (POPs) subject to international phase‐out or bans. For example, Bayer/Monsanto RoundUp™ (glyphosate), or other chemicals with known health concerns (controversial due to lawsuits found in favor of the plaintiff, or where the “jury is out” as to proof of their safety and efficacy), are off our table.

Conclusion:  We will listen, and initially remain open to learning about your unique situation, but don’t be surprised if we simply say “no” to proposals that tie in with any of the above activities.

How We Partner with Clients

In a word, collaboration.  No proposals for funding are ever perfect, but there are minimum “underwriting” standards that define whether or not it is likely to succeed.  Of course, the world is not how it appears; it is what we make of it.  How you frame and support your storytelling says a lot about your odds of success.

You intend to make money, of course, but how else will you measure your success?  Money alone is not enough, as no commercial activities are in a vacuum, and although there’s nothing wrong with making money, how will those activities affect other stakeholders?  If there’s a win/lose dynamic, it won’t be sustainable.  We can help resolve these inherent challenges and help identify solutions that lead to viable proposals. Consider a brief review/audit to kick off this collaboration.

Nobody is a victim of their circumstances, their upbringing, the company they keep, the problems they seem to have inherited, or the limitations they think they have (some are, admittedly, very hard to break through); but knowledge is power, and generally when we know better, we do better.  What “nut” are you trying to crack and how can In3 help?  We will listen.

In3 Funding Structure & Purpose

We offer in-house capital through our flagship Completion Assurance Program™ (CAP funding), as well as other funding above US$50 million for mid-market projects or portfolios.  For companies seeking either project funding below $25 million or venture capital (differences between venture capital and project capital?), we generally require a Management Services Agreement to deliver strategic advisory and other “premium” services within a tight scope of work.

Short list of what we won’t do:

  • We won’t take on 100% of the risks.  We can provide 100% financing, but not without the developer or a stakeholder or sponsor taking on a meaningful share of the risks.  No reputable lender or equity investor will take on all of the risks without expecting risk-adjusted returns or control in some form.  Some less reputable lenders tend to be predatory and will attempt to outmaneuver the owners to take control of assets (and they will do so if you let them, even if unwittingly). To avoid this unfortunate, deceptive practice, we created In3’s CAP funding, where we make all terms and conditions fully transparent and help developers qualify, with ZERO upfront fees, a true “full leverage”, non-recourse, innovative structure.  All funding for qualified projects comes from a private, US-based family office.  For a deeper dive, review the CAP funding description, program synopsis, or Frequently Asked Questions.
  • We won’t work for free.  Experienced developers can skip this one.  We do not charge initial fees for our flagship CAP funding, mentioned above, but we reserve the right to point to minimum standards that must be met, and invite the client or project promoter to take steps to meet those standards.  First-time entrepreneurs seeking to gain project development experience through commercial financing will have a harder time qualifying. There’s usually a required minimum 3 years business and sector experience, plus a sharp learning curve just to navigate the requirements.  We may ask for a vetting fee if you cannot demonstrate preparedness (starting with a detailed and transparent accounting of how you propose to use raised funding), or wish to learn on-the-job how to build a standards-based project financing proposal.  Alternatively, you may hire/involve someone else to help you prepare the project’s financial model, make commercial arrangements (such as with buyers of goods and services), and related disclosures that meet minimum expectations for funding.  Consider hiring In3 or an In3 Affiliate as they are trained in our systems.
  • We don’t directly handle trade finance (Import/Export) transactions (with rare exception) — our flagship funding is mainly about building things, such as sustainable infrastructure, including renovations, retrofits and expansions.  We have trusted partners that will handle this area and can make an introduction.
  • Alternative currencies — we do not work with Bitcoin or other “cryptocurrencies,” nor fintech or purely financial services companies, with rare exception.  That said, we can invest in almost any established “local” currency.
  • Funding to pay off existing debt or buy out existing equity holders in a lump sum.  Most lenders prefer to pay out seed investors or short-term (bridge or construction loans) over time, though the program mentioned above may be able to solve this.  Some projects can also be sold outright — delivered “turnkey” under a Build-Operate-Transfer or BOT model — where the developer collects a fee instead of retaining a carried interest.  Some assets can be acquired outright if the payout of funds are first accumulated in an escrow account.  We also have an M&A practice, making acquisitions possible, so please mention this up front, when we are just starting out (New Client Resource Center).
  • Doing business in countries not qualified for our lending or investment programs, which is a finite list that boils down to countries with US sanctions imposed against them (see list of qualified countries).  That said, if the Special Purpose Vehicle (SPV) can be located somewhere else, it may still be feasible to fund such a project, within reason.

Questions?  Not sure if your project fits, exactly?  Ask!