Newsletter – One Person, One Vote (Vol. 2, No. 3)

The World Class R&D InstituteOne Person, One Vote+

This month's we discuss wealth creation for Intellectual Capital+. Unpredictable R&D+, our target investment, is an extreme form of Intellectual Capital, in that we don't know when or how it will be commercially exploited.

These are for the most part intangible assets. Wealth creation within these assets is similarly intangible. There are no physical manifestations of these assets equivalent in value to the wealth they get assigned. Investors need to get into the minds of those creating the Intellectual Capital to appreciate the validity of this created wealth. This only really happens within a community of investors. And our community must consist of citizen-investors, each citizen having the vote (and only one vote).

The home page articles give the big picture. Editors' Picks provide many of the operational details. See Separation of Voting Rights from Cash Flow for an explanation of how the one person, one vote rule can be justified in a financial world filled with investors of every economic strata.

September 2011 Home Page

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Colleagues,

We spent over a year exploring what it takes to commercially exploit new science platforms in the laboratory. We started at the bottom, showing how to increase effectiveness in industrial R&D. Now we come to the surprising answer as to how to make this work from the top: one person, one vote, no proxies. We flip today’s one share, one vote on its head. (Home Page)

There is a catch, of course. Not all votes are created equal and you don’t get a vote until you have significant skin-in-the-game (e.g., literacy tests and property-ownership). And, we expect you to show clear signs of being a good citizen / member of our investment community. One-person, one-vote works only when we have informed citizens who care. As you can start to sense, this is not your daddy's business model.

We seek many thousands of hundred-thousandaires (i.e., the upper middle class) as our investors. They can buy and sell at will similar to their experience trading in the larger public exchanges. Shares are reasonably priced, hold their value, and are quite fungible. We make a market in these shares if necessary. As a citizen-investor you choose when to leave but we make it worthwhile to stick around.

An organizational form coming to a similar answer is the cooperative+ (ouch!). Before you jump to a facile dismissal that these are only good for farmers markets and credit unions, recall CoBank is a U.S. $69 billion cooperative bank. For all their perceived (and actual) faults cooperatives have a hundred-plus year history of constructing self-sustaining and durable communities that coexist within almost any type of host country government. This durability is what will allow us to provide long-term funding for unpredictable R&D (our funding mission).

This may be the first time an organizational form of this genre has been proposed for an endeavor of this scope. We sought new money to fund unpredictable R&D and this is it. Our cooperative becomes the equivalent of NASDAQ / NYSE, but for investments into unpredictable R&D, and with some very unusual twists (e.g., you must be World Class R&D certified to get listed on our exchange). As a member of our exchange you get a seat and you get a significant say in how it's run.

We recommend the following article: Separation of Voting Rights from Cash Flow. This article makes the one person, one vote rule more palatable by framing it as a dual class capitalization (i.e., Class A, Class B shares), as are found today in many publicly traded firms.

Slowly, slowly the economy is coming back. Hope you enjoyed your summer.

Keith Ortiz, President and CEO
The World Class R&D Institute, A Non-Profit Institution
609-954-8319 (c)


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