Comdev- Jim Ife

download Comdev- Jim Ife

of 386

Transcript of Comdev- Jim Ife

  • &RPPXQLW\'HYHORSPHQWLQDQ8QFHUWDLQ:RUOG

    9LVLRQDQDO\VLVDQGSUDFWLFH

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

    7KHILUVW VHFWLRQRI WKHERRNH[DPLQHV WKHPDMRU WKHRULHVDQGFRQFHSWV WKDWXQGHUSLQFRPPXQLW\GHYHORSPHQW7KLV LQFOXGHVDGLVFXVVLRQRIFRUHSULQFLSOHVFKDQJHDQGZLVGRPIURPEHORZ WKHLPSRUWDQFHRISURFHVVDQGYDOXLQJGLYHUVLW\7KHVHFRQGVHFWLRQIRFXVHVRQSUDFWLFDOHOHPHQWVVXFKDVFRPPXQLW\ZRUNUROHVDQGHVVHQWLDOVNLOOV7KHILQDOFKDSWHUVGLVFXVVWKHSUREOHPDWLFFRQWH[WRIPXFKFRQWHPSRUDU\SUDFWLFHDQGRIIHUYLVLRQDQGKRSHIRUWKHIXWXUH

    :ULWWHQLQ-LP,IHVFKDUDFWHULVWLFHQJDJLQJDQGDFFHVVLEOHVW\OH&RPPXQLW\'HYHORSPHQWLQDQ8QFHUWDLQ:RUOGLVDQHVVHQWLDOUHVRXUFHIRUVWXGHQWVDQGSUDFWLWLRQHUVQRZPRUHWKDQHYHU

    (PHULWXV3URIHVVRU -LP ,IH KROGV DGMXQFW SRVLWLRQV DW WKH&HQWUH IRU+XPDQ5LJKWV (GXFDWLRQ DW&XUWLQ8QLYHUVLW\3HUWKDWWKH&HQWUHIRU&LWL]HQVKLSDQG+XPDQ5LJKWVDW'HDNLQ8QLYHUVLW\DQGDW9LFWRULD8QLYHUVLW\0HOERXUQH

  • &RPPXQLW\'HYHORSPHQWLQDQ8QFHUWDLQ:RUOG

    9LVLRQDQDO\VLVDQGSUDFWLFH

    -LP,IH

  • &$0%5,'*(81,9(56,7
  • /HYHO&DVWOHUHDJK6WUHHW

    6\GQH\16:

    7HOHSKRQH

    )DFVLPLOH

    (PDLOLQIR#FRS\ULJKWFRPDX

    &DPEULGJH8QLYHUVLW\3UHVVKDVQRUHVSRQVLELOLW\IRUWKHSHUVLVWHQFHRUDFFXUDF\RI85/VIRUH[WHUQDORUWKLUGSDUW\LQWHUQHWZHEVLWHVUHIHUUHGWRLQWKLVSXEOLFDWLRQDQGGRHVQRWJXDUDQWHHWKDWDQ\

    FRQWHQWRQVXFKZHEVLWHVLVRUZLOOUHPDLQDFFXUDWHRUDSSURSULDWH

  • &RQWHQWV

    /LVWRIILJXUHVDQGWDEOHV$FNQRZOHGJHPHQWV,QWURGXFWLRQ 7KHFULVLVLQKXPDQVHUYLFHVDQGWKHQHHGIRUFRPPXQLW\

    7KHFULVLVLQWKHZHOIDUHVWDWHDQGWKHHPHUJHQFHRIQHROLEHUDOLVP$ZD\IRUZDUG&RPPXQLW\EDVHGVHUYLFHVDVDQDOWHUQDWLYH7KHPLVVLQJLQJUHGLHQWFRPPXQLW\GHYHORSPHQW7KHQH[WVWHSV

    )RXQGDWLRQVRIFRPPXQLW\GHYHORSPHQW$QHFRORJLFDOSHUVSHFWLYH&ULVLV(QYLURQPHQWDOUHVSRQVHVDQG*UHHQUHVSRQVHV7KHPHVZLWKLQ*UHHQDQDO\VLV$QHFRORJLFDOSHUVSHFWLYH$QHFRORJLFDOSHUVSHFWLYHLVLWHQRXJK"

    )RXQGDWLRQVRIFRPPXQLW\GHYHORSPHQW$VRFLDOMXVWLFHSHUVSHFWLYH$SSURDFKHVWRGLVDGYDQWDJHWKHOLPLWDWLRQVRIVRFLDOSROLF\(PSRZHUPHQW1HHG5LJKWV

    )RXQGDWLRQVRIFRPPXQLW\GHYHORSPHQW%H\RQG(QOLJKWHQPHQWPRGHUQLW\7KH(QOLJKWHQPHQW%H\RQGWKH(QOLJKWHQPHQW,QGLJHQRXVXQGHUVWDQGLQJV&RQFOXVLRQ

    $YLVLRQIRUFRPPXQLW\GHYHORSPHQW:K\HDFKSHUVSHFWLYHLVLQVXIILFLHQWXQOHVVLQIRUPHGE\WKHRWKHUV7KHSURPLVHRILQWHJUDWLRQ&RPPXQLW\'HYHORSPHQW&RPPXQLW\EDVHGKXPDQVHUYLFHV$QDOWHUQDWLYHYLVLRQJURXQGVIRUKRSH

    &KDQJHIURPEHORZ9DOXLQJORFDONQRZOHGJH9DOXLQJORFDOFXOWXUH9DOXLQJORFDOUHVRXUFHV9DOXLQJORFDOVNLOOV9DOXLQJORFDOSURFHVVHV:RUNLQJLQVROLGDULW\,GHRORJLFDODQGWKHRUHWLFDOIRXQGDWLRQVIRUFKDQJHIURPEHORZ&RQFOXVLRQ

    7KHSURFHVVRIFRPPXQLW\GHYHORSPHQW

  • 3URFHVVDQGRXWFRPH7KHLQWHJULW\RISURFHVV&RQVFLRXVQHVVUDLVLQJ3DUWLFLSDWRU\GHPRFUDF\&RRSHUDWLRQ7KHSDFHRIGHYHORSPHQW3HDFHDQGQRQYLROHQFH&RQVHQVXV&RPPXQLW\EXLOGLQJ&RQFOXVLRQ

    7KHJOREDODQGWKHORFDO*OREDOLVDWLRQ/RFDOLVDWLRQ3URWHVW*OREDODQGORFDOSUDFWLFH8QLYHUVDODQGFRQWH[WXDOLVVXHV

    &RORQLDOLVPFRORQLDOLVWSUDFWLFHDQGZRUNLQJLQWHUQDWLRQDOO\*XDUGLQJDJDLQVWFRORQLDOLVWSUDFWLFH:RUNLQJLQWHUQDWLRQDOO\

    &RPPXQLW\GHYHORSPHQW6RFLDOHFRQRPLFDQGSROLWLFDO6RFLDOGHYHORSPHQW(FRQRPLFGHYHORSPHQW3ROLWLFDOGHYHORSPHQW

    &RPPXQLW\GHYHORSPHQW&XOWXUDOHQYLURQPHQWDOVSLULWXDOSHUVRQDODQGVXUYLYDO&XOWXUDOGHYHORSPHQW(QYLURQPHQWDOGHYHORSPHQW6SLULWXDOGHYHORSPHQW3HUVRQDOGHYHORSPHQW6XUYLYDOGHYHORSPHQW%DODQFHGGHYHORSPHQW

    3ULQFLSOHVRIFRPPXQLW\GHYHORSPHQWDQGWKHLUDSSOLFDWLRQWRSUDFWLFH)RXQGDWLRQDOSULQFLSOHV3ULQFLSOHVRIYDOXLQJWKHORFDO3URFHVVSULQFLSOHV*OREDODQGORFDOSULQFLSOHV&RQFOXVLRQ

    5ROHVDQGVNLOOV)DFLOLWDWLYHDQGHGXFDWLRQDO:LWKKHDGKHDUWKDQGDQGIHHW7KHSUREOHPZLWKFRRNERRNV&RPSHWHQFLHV3UDFWLFHWKHRU\UHIOHFWLRQDQGSUD[LV7KHODQJXDJHRIUROHV)DFLOLWDWLYHUROHVDQGVNLOOV(GXFDWLRQDOUROHVDQGVNLOOV

    5ROHVDQGVNLOOV5HSUHVHQWDWLRQDODQGWHFKQLFDO

  • 5HSUHVHQWDWLRQDOUROHVDQGVNLOOV7HFKQLFDOUROHVDQGVNLOOV7ZRVSHFLDOFDVHVQHHGVDVVHVVPHQWDQGHYDOXDWLRQ'HP\VWLI\LQJVNLOOV

    7KHRUJDQLVDWLRQDOFRQWH[W0DQDJHULDOLVP5HVSRQGLQJWRPDQDJHULDOLVPFRPPXQLW\GHYHORSPHQWDVVXEYHUVLYH,QWURGXFLQJFRPPXQLW\GHYHORSPHQWSURFHVVHVWKHSRZHURIWKHFROOHFWLYH&RQFOXVLRQ

    3UDFWLFHLVVXHV3UDFWLFHIUDPHZRUNV&DWHJRULHVRIFRPPXQLW\ZRUNHU9DOXHVDQGHWKLFV3URIHVVLRQDOLVP(GXFDWLRQDQGWUDLQLQJ7KHXVHDQGDEXVHRISRZHU,QWHUQDODQGH[WHUQDOFRPPXQLW\ZRUN/RQJWHUPFRPPLWPHQW6XSSRUW3DVVLRQYLVLRQDQGKRSH

    5HIHUHQFHV,QGH[

  • )LJXUHVDQGWDEOHV

    )LJXUH 7KHYLVLRQRIFRPPXQLW\GHYHORSPHQW)LJXUH ,QWHJUDWHGFRPPXQLW\GHYHORSPHQW)LJXUH 6RFLDOGHYHORSPHQW)LJXUH &RPPXQLW\HFRQRPLFGHYHORSPHQW)LJXUH 3ROLWLFDOGHYHORSPHQW)LJXUH &XOWXUDOGHYHORSPHQW)LJXUH &RPPXQLW\ZRUNSUDFWLFHUROHV)LJXUH $IUDPHZRUNIRUFRPPXQLW\ZRUNHUV7DEOH 6FKRROVRI*UHHQWKRXJKW7DEOH $QHFRORJLFDOSHUVSHFWLYH7DEOH $FFRXQWVRIVRFLDOLVVXHV7DEOH 3HUVSHFWLYHVRQSRZHU7DEOH (PSRZHUPHQW7DEOH 7\SHVRIQHHGVWDWHPHQWV7DEOH &DWHJRULHVRIFRPPXQLW\ZRUNHUV

  • $FNQRZOHGJHPHQWV

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

    7KHUH DUH VRPH SHRSOHZKR KDYH FRQWULEXWHG VLJQLILFDQWO\ WR WKLV ERRN DQGZKR QHHG VSHFLDODFNQRZOHGJHPHQW )LUVW P\ZLIH 'U 6RQLD 7DVFyQ KDV EHHQ D FRQWLQXLQJ VRXUFH RI VXSSRUW DQGLQVSLUDWLRQDWERWKDSHUVRQDODQGDQLQWHOOHFWXDOOHYHO,RZHKHUDWUHPHQGRXVGHEWDQGKHUSUHVHQFHLQWKLVERRNLVVWURQJ

    ,WLVLPSRUWDQWWRDFNQRZOHGJH'U)UDQN7HVRULHURZKRWRRNRYHUWKHWKLUGDQGIRXUWKHGLWLRQVRIWKLVERRNZKLOHP\DFDGHPLFDQGSUDFWLFHLQWHUHVWVPRYHGPRUHLQWRWKHILHOGRIKXPDQULJKWV,DPJUDWHIXO WRKLPIRUXQGHUWDNLQJ WKLVZRUNDQGDOVR IHHOD VHQVHRI VDGQHVV WKDWFLUFXPVWDQFHVKDYHGLFWDWHGWKDWKHFDQQRORQJHUEHLQYROYHGZLWKWKHSURMHFW,WLVLPSRUWDQWWRSRLQWRXWWKDWWKLVHGLWLRQFRQWDLQVRQO\PDWHULDO IURPWKHILUVWDQGVHFRQGHGLWLRQVIRUZKLFK,ZDV WKHVROHDXWKRU WRJHWKHUZLWKVXEVWDQWLDODGGLWLRQVDQGDOWHUDWLRQV,KDYHPDGHWREULQJLWXS WRGDWH ,WFRQWDLQVQRQHRI WKHPDWHULDOWKDW)UDQNDGGHGLQWKHWKLUGDQGIRXUWKHGLWLRQVDQGKHQFHLWLVSXEOLVKHGZLWKP\QDPHDVWKH VROH DXWKRU , DP DOVR JUDWHIXO WR WKHPDQ\ FROOHDJXHV WKURXJKRXW$XVWUDOLD DQG RYHUVHDVZKRHQFRXUDJHGPHWRWDNHXSWKLVSURMHFWDJDLQDQGWRFRPPLWWRDQHZHGLWLRQ

    2WKHUSHRSOH,ZLVKWRDFNQRZOHGJHZKRVHLQIOXHQFHRQWKHHDUO\HGLWLRQVDQGRURQWKHSUHVHQWHGLWLRQKDVEHHQSDUWLFXODUO\LPSRUWDQWDUHLQDOSKDEHWLFDORUGHU-DFTXHV%RXOHW/LQGD%ULVNPDQ,QJULG %XUNHWW /RYH &KLOH 3KLO &RQQRUV -R 'LOORQ:HQG\ (DUOHV (ULFD )DLWK /XF\ )LVNH 9LF*HRUJH$PDQGD+RSH$GDP-DPUR]LN6XH.HQQ\1ROD.XQQHQ0DU\/DQH/RXLVH0RUOH\5RE\Q0XQIRUG 5RE 1DEEHQ -HDQ 3DQHW5D\PRQG 6WXDUW 5HHV *DYLQ 5HQQLH 0RQLFD 5RPHR '\DQQ5RVV5RGQH\5RXWOHGJH(YHO\Q6HUUDQR3DW6KDQQRQ-RDQQH6WRQH'DYLG:RRGVZRUWKDQG6XVDQ

  • LGHDVDQGKHOSHGWRFUHDWHHQULFKLQJFOLPDWHVWRH[SORUHLVVXHVRIFRPPXQLW\GHYHORSPHQW%H\RQGWKHWUDGLWLRQDOXQLYHUVLW\%RUGHUODQGV&RRSHUDWLYHLVDVSHFLDOSODFHRIVKDUHGVFKRODUVKLSOHDUQLQJDQG DFWLYLVP ZLWK D ZRQGHUIXO FRPPXQLW\ GHYHORSPHQW OLEUDU\ ZKLFK KDV SURYLGHG PH ZLWK DSDUWLFXODUO\VWLPXODWLQJHQYLURQPHQWLQZKLFKWRGHYHORSLGHDVIRUWKLVHGLWLRQ(DUOLHUHGLWLRQVZHUHSDUWLFXODUO\LQIOXHQFHGE\IULHQGVDQGFROOHDJXHVDWWKH*UHHQV:$$PQHVW\,QWHUQDWLRQDODQGWKH,QWHUQDWLRQDO)HGHUDWLRQRI6RFLDO:RUNHUV

    7KLVHGLWLRQLVSXEOLVKHGE\DGLIIHUHQWSXEOLVKHUDQG,DPJUDWHIXOWR3HDUVRQ(GXFDWLRQIRUWKHLUJHQHURVLW\LQUHOHDVLQJWKHFRS\ULJKWRIWKHILUVWWZRHGLWLRQVVRWKDWWKH\FRXOGEHLQFRUSRUDWHGLQWKLVQHZHGLWLRQ ,DPDOVRJUDWHIXO WR ,VDEHOOD0HDGSXEOLVKHUDW&DPEULGJH8QLYHUVLW\3UHVV IRUKHUHQWKXVLDVPIRU WKHSURMHFWDQGKHUVXSSRUW WKURXJKRXW WKHSURFHVV0\DVVRFLDWLRQZLWK&DPEULGJH8QLYHUVLW\ 3UHVV JRHV EDFN RYHU \HDUV QRZ DQG LW KDV EHHQ D YHU\ SURIHVVLRQDO SRVLWLYH DQGWURXEOHIUHHUHODWLRQVKLSWKDW,KDYHFRPHWRYDOXHKLJKO\

    )LQDOO\WKLVERRNLVGHGLFDWHGWRP\JUDQGFKLOGUHQ%HQ(PPD-RH+DPLVKDQG3KRHEH,WLV,KRSHDVPDOOFRQWULEXWLRQWRZDUGVFUHDWLQJDEHWWHUIXWXUHIRUWKHPDQGIRUDOOWKRVHZKRZLOOLQKHULWWKH ZRUOG WKDW P\ JHQHUDWLRQ KDV VR FRPSUHKHQVLYHO\ WUDVKHG DQG VWULSSHG RI LWV FRPPXQLWDULDQWUDGLWLRQV

    -LP,IH0HOERXUQH

  • ,QWURGXFWLRQ

    'HVSLWHWKHIRUPLGDEOHDFKLHYHPHQWVRIPRGHUQ:HVWHUQLQGXVWULDOLVHGVRFLHW\LWKDVEHFRPHFOHDU WKDW WKHFXUUHQW VRFLDOHFRQRPLFDQGSROLWLFDORUGHUKDVEHHQXQDEOH WRPHHW WZRRI WKHPRVW EDVLF SUHUHTXLVLWHV IRU KXPDQ FLYLOLVDWLRQ WKH QHHG IRU SHRSOH WR EH DEOH WR OLYH LQKDUPRQ\ZLWKWKHLUHQYLURQPHQWDQGWKHQHHGIRUWKHPWREHDEOHWROLYHLQKDUPRQ\ZLWKHDFKRWKHU ,I WKHVH WZR QHHGV FDQQRW EH PHW LQ WKH ORQJ WHUP WKH DFKLHYHPHQWV DQG EHQHILWV RIPRGHUQVRFLHW\ZLOOEHWUDQVLWRU\

    7KHLQDELOLW\RIWKHGRPLQDQWRUGHUWRPHHWWKHVHQHHGVFDQEHVHHQLQWKHFULVHVFXUUHQWO\IDFLQJQRW RQO\ :HVWHUQ LQGXVWULDOLVHG VRFLHWLHV EXW DOO VRFLHWLHV 7KH ZRUOG LV FKDUDFWHULVHG E\LQFUHDVLQJLQVWDELOLW\ZKHWKHUHFRORJLFDOHFRQRPLFSROLWLFDOVRFLDORUFXOWXUDODQGH[LVWLQJLQVWLWXWLRQV VHHPRQO\ DEOH WRSURYLGH VROXWLRQVZKLFK LQ WKH ORQJ WHUP DQG HYHQ LQ WKH VKRUWWHUPRQO\PDNHWKLQJVZRUVH

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

    7KHUH DUH KRZHYHU VLJQV RI KRSH 7KH FRQWLQXLQJ GHPRQVWUDWLRQV DJDLQVW JOREDOLVDWLRQFXOPLQDWLQJLQWKH2FFXS\PRYHPHQWRIVXJJHVWWKDWWKHUHDUHPDQ\SHRSOHZKRDUHVHHNLQJDQDOWHUQDWLYH 7KH ZLGHVSUHDG GLVLOOXVLRQPHQW ZLWK PDLQVWUHDP SROLWLFDO SDUWLHV FDXVHG E\ WKHSHUFHLYHGLUUHOHYDQFHRIPDLQVWUHDPSROLWLFVDQGPHDQLQJOHVVHOHFWLRQVWKDWIDLOWRDGGUHVVPDQ\RI

  •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

    7KLVRQJRLQJLQWHUHVWLQFRPPXQLW\GHYHORSPHQWLVVKRZQE\UHDFWLRQWRWKHHDUOLHUHGLWLRQVRIWKLVERRNZKLFKKDYHKDGDZLGHUDSSHDOWKDQILUVWLPDJLQHG7KLVZLGHUDSSHDOKDVEHHQHYLGHQWLQWZRGLUHFWLRQV2QHLVWKHHPEUDFLQJRIFRPPXQLW\GHYHORSPHQWE\DZLGHUDQJHRIRFFXSDWLRQDOJURXSVQRWPHUHO\WKHKXPDQVHUYLFHSURIHVVLRQDOVDQGFRPPXQLW\DFWLYLVWVWKDWRQHPLJKWH[SHFWDQGZKRZHUH LPSOLFLWO\ WKH UHDGHUVKLS IRUZKLFK WKH ILUVW HGLWLRQZDV LQWHQGHG , KDYHGLVFRYHUHG DPXFK

  •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

    7KHQH[WWZRFKDSWHUVH[SORUHWZRVLJQLILFDQWSULQFLSOHVRIFRPPXQLW\GHYHORSPHQW&KDSWHULVFRQFHUQHGZLWKFKDQJHIURPEHORZYDOXLQJWKHZLVGRPH[SHUWLVHDQGVNLOOVRIWKHFRPPXQLW\DQGWKH LPSRUWDQFH RI GHFHQWUDOLVDWLRQ DQG FRPPXQLW\ FRQWURO&KDSWHU GLVFXVVHV WKH SURFHVVHV RIFRPPXQLW\ GHYHORSPHQW LQFOXGLQJ WKH SULPDF\ RI SURFHVV RYHU RXWFRPHV DQG WKH LVVXHV RISDUWLFLSDWLRQGHPRFUDF\FRQVFLRXVQHVVUDLVLQJSHDFHDQGQRQYLROHQFH

    &KDSWHUVDQGRXWOLQHDPRUHJOREDORULQWHUQDWLRQDOSHUVSHFWLYH&KDSWHULVFRQFHUQHGZLWKJOREDOLVDWLRQ DQG XQGHUVWDQGLQJ FRPPXQLW\ GHYHORSPHQW LQ D JOREDOLVLQJ ZRUOG ZKLOHFKDSWHU H[SORUHV WKH LPSRUWDQW LVVXHRI FRORQLDOLVPZKLFKFDQDIIHFW DOO FRPPXQLW\GHYHORSPHQWSUDFWLFH

  • DQGFRQVLGHUVLVVXHVDURXQGZRUNLQJLQWHUQDWLRQDOO\

    &KDSWHUV DQG RXWOLQH HLJKW GLPHQVLRQV RI FRPPXQLW\ GHYHORSPHQW VRFLDO HFRQRPLFSROLWLFDO FXOWXUDO HQYLURQPHQWDO VSLULWXDO SHUVRQDO DQG VXUYLYDO 3UDFWLFH LQ HDFK RI WKHVH HLJKWDUHDVLVGLVFXVVHGZLWKYDULRXVLVVXHVLGHQWLILHGLQUHODWLRQWRHDFK7KHDSSURDFKWDNHQLVRQHWKDWHPSKDVLVHVWKHLPSRUWDQFHRIDOOHLJKWLQDKROLVWLFDQGLQWHJUDWHGXQGHUVWDQGLQJRIZKDWFRPPXQLW\GHYHORSPHQWPHDQV

    &KDSWHUVHHNV WRVXPPDULVH WKH LGHDVRISUHYLRXVFKDSWHUV LQDVHULHVRISUDFWLFHSULQFLSOHV7KHUHDUHSULQFLSOHVGLVFXVVHGDOWRJHWKHUDQGDOWKRXJKWKHUHLV OLWWOH LQ WKLVFKDSWHU WKDWKDVQRWEHHQFRYHUHGLQSUHYLRXVFKDSWHUVUHDGHUVKDYHIRXQGVXFKDVXPPDU\DWWKLVSRLQWWREHSDUWLFXODUO\XVHIXODVDZD\RIHQFDSVXODWLQJWKHSULQFLSOHVRIFRPPXQLW\GHYHORSPHQW

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

    7KHERRNPRYHVLQDJHQHUDOZD\IURPPRUHWKHRUHWLFDOWRPRUHSUDFWLFDOFRQVLGHUDWLRQVEXWLWLV IDU IURP D VLPSOH OLQHDU GHYHORSPHQW ,QGHHG SDUW RI WKH GLVFXVVLRQ LQ WKH HDUOLHU FKDSWHUVHPSKDVLVHV WKHQHHGWRUHMHFW OLQHDU WKLQNLQJVR WKHUHDGHU LVHQFRXUDJHGWRMXPSDURXQGDQGQRWQHFHVVDULO\ UHDG WKH ERRN LQ WKH RUGHU LQ ZKLFK LW LV ZULWWHQ 7KH ERRN GRHV DWWHPSW WR IROORZ DORJLFDO VHTXHQFH EXW WKHUH DUH RWKHU HTXDOO\ YDOLG ORJLFDO VHTXHQFHV WKDW FRXOG KDYH UHVXOWHG LQ DYHU\GLIIHUHQWRUGHURIWKHPDWHULDO

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

    ,KDYHXSGDWHG WKH UHIHUHQFHV WR LQFRUSRUDWHFRQWHPSRUDU\VRXUFHVD ORWKDVEHHQZULWWHQVLQFH +RZHYHU , KDYH DOVR LQFOXGHG D QXPEHU RI ROGHU VRXUFHV IRU WKH HDUOLHU HGLWLRQV ZKHUH ,EHOLHYHWKH\KDYHVRPHWKLQJLPSRUWDQWWRVD\,QWKLVDJHZKHQWKHKHUHDQGQRZLVVRYDOXHGDQGZKHUHKLVWRU\LVRIWHQPDUJLQDOLVHGLWLVLPSRUWDQWWKDWZHFKDOOHQJHWKLVE\OLVWHQLQJWRWKHYRLFHVRI

  • WKH SDVW DV ZHOO DV WKH SUHVHQW DQG WKHUH LV PXFK RI YDOXH WR FRPPXQLW\ GHYHORSPHQW LQ HDUOLHUOLWHUDWXUH

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

    7KURXJKRXW WKH ERRN WKH WHUPVFRPPXQLW\ GHYHORSPHQW DQGFRPPXQLW\ ZRUN KDYH VOLJKWO\GLIIHUHQW PHDQLQJV , KDYH XVHG WKH IRUPHU WR UHIHU WR WKH SURFHVVHV RI GHYHORSLQJ FRPPXQLW\VWUXFWXUHVZKLOHWKHODWWHUUHIHUVWRWKHDFWXDOSUDFWLFHRIDSHUVRQZKHWKHUSDLGRUXQSDLGZKRLVFRQVFLRXVO\ZRUNLQJWRIDFLOLWDWHRUDFKLHYHVXFKGHYHORSPHQW

    , KDYH RSWHG IRU WKHPRVW SDUW WR XVH WKH WHUPVWKH6RXWK DQGWKH1RUWK UDWKHU WKDQGHYHORSLQJQDWLRQV7KLUG:RUOG RU RWKHU VLPLODU WHUPV DQG WKHLU RSSRVLWHV1RQH LVZKROO\ VDWLVIDFWRU\ DQGOLYLQJLQ$XVWUDOLDWKH6RXWKRIIHQGVRQHVJHRJUDSKLFDOFRQVFLRXVQHVVEXWDVLQRWKHUZD\VLWLVWKHOHDVW RIIHQVLYH WHUP LW LV WKH RQH , KDYH FKRVHQ 7KH WHUP:HVWHUQ RUWKH:HVW VLPLODUO\ WDNHVOLEHUWLHVZLWKJHRJUDSKLFDOSULQFLSOHVSDUWLFXODUO\IRUDQ$XVWUDOLDQ7KHWHUPLVQRQHWKHOHVVDXVHIXORQHDQG LQ WKHFRQWH[WRI WKLVERRNLW UHIHUVSULPDULO\ WR:HVWHUQFXOWXUHZKHUHDV WKH WHUPV1RUWKDQG6RXWKDUHXVHGPRUHLQDQHFRQRPLFFRQWH[WRIFRXUVHWKHGLVWLQFWLRQLVQRWDOZD\VFOHDUFXWDVHFRQRPLFVDQGFXOWXUHDUHWKHPVHOYHVLQH[WULFDEO\HQWZLQHG,WVKRXOGKRZHYHUEHQRWHGWKDWWKHUHLVQRQHFHVVDU\VLQJOHDQWLWKHVLVRI:HVWHUQLQFXOWXUDOWHUPVZKHUHDVWKHHFRQRPLFFRQVWUXFWVRIWKH1RUWKDQGWKH6RXWKDUHQRWRQO\RSSRVLWHVEXWDOVRLQVXFKDVWUXFWXUDOUHODWLRQVKLSWKDWQHLWKHUFRXOGH[LVWZLWKRXWWKHRWKHUDQGHDFKVHUYHVWRGHILQHWKHRWKHU,KDYHXVHGWKHWHUP$RWHDURDUDWKHUWKDQ1HZ =HDODQG DV D GHOLEHUDWH SROLWLFDO DQG FXOWXUDO VWDWHPHQW , RQO\ ZLVK WKDW $XVWUDOLD KDG DVLPLODUO\DFFHSWHG,QGLJHQRXVQDPH

    7KURXJKRXWWKHERRNWKHUHDUHDQXPEHURIWDEOHVDQGGLDJUDPVWKDWLOOXVWUDWHLQVXPPDU\IRUPWKHLGHDVGLVFXVVHGLQWKHWH[WFXOPLQDWLQJLQILJXUHVHHSDJHZKLFKDPELWLRXVO\DWWHPSWVWRVXPPDULVH WKH HQWLUH IUDPHZRUN 7KH\ DUH LQFOXGHG ZLWK PL[HG IHHOLQJV VHYHUDO UHDGHUV KDYHFRPPHQWHGWKDWVXFKWDEOHVDQGGLDJUDPVDUHKHOSIXOLQREWDLQLQJDQRYHUYLHZDQGLQVHHLQJKRZWKHPDWHULDO ILWV WRJHWKHU EXW WKLV QHHGV WR EH EDODQFHG DJDLQVW WKH GDQJHUV RI FDWHJRULVDWLRQ DQGRYHUVLPSOLILFDWLRQ7DEOHVDQGGLDJUDPVFDQKDYHWKHHIIHFWRILPSRVLQJDIDOVHVHQVHRIRUGHURQDFRPSOH[ DQG FKDRWLF UHDOLW\ DQG KHQFH RI LQYLWLQJ VLPSOLVWLF VROXWLRQV WR FRPSOH[ SUREOHPV 7RUHSUHVHQWFRPSOH[FRQFHSWVE\D IHZZRUGV LQDFHOORID WDEOH LV WRFKDQJH WKHYHU\QDWXUHRI WKHFRQWHQW LWVHOI DQG LQYLWHV D GDQJHURXV UHGXFWLRQLVP $ WRRULJLG LQWHUSUHWDWLRQ RI VXFK WDEOHV LVDQWLWKHWLFDO WR WKHKROLVWLF DSSURDFKDGYRFDWHG LQ WKHHDUO\FKDSWHUV DQG WKH UHDGHU LV FDXWLRQHG WRUHPHPEHU WKDW WKH ERXQGDULHV RI WKH WDEOHV GR QRW UHSUHVHQW ULJLG GLVWLQFWLRQV RU LPSHUPHDEOHEDUULHUV ,I WKH WDEOHV DQGGLDJUDPV DUH UHJDUGHG DV DQ DLG WR FRPSUHKHQVLRQ EXW QRW DV ULJLG

  • FDWHJRULVDWLRQVRUGHILQLWLRQVWKH\ZLOOKDYHVHUYHGWKHLUSXUSRVH

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

  • 7KHFULVLVLQKXPDQVHUYLFHVDQGWKHQHHGIRUFRPPXQLW\

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

  • 7KHVWDUWLQJSRLQWIRUWKLVH[SORUDWLRQZLOOEHWKHFULVLVLQWKHFRQWHPSRUDU\ZHOIDUHVWDWHDQGWKHHPHUJHQFH RI QHROLEHUDOLVP DORQJVLGH WKH UHFXUULQJ LQWHUHVW LQ GHYHORSLQJ VRPH IRUP RIFRPPXQLW\EDVHGDOWHUQDWLYH,WLVIURPH[DPLQLQJWKHVKRUWFRPLQJVRIPDQ\DWWHPSWVWRPRYHWRDFRPPXQLW\EDVHGPRGHODQGWKHLGHQWLILFDWLRQRIZKDWLVPLVVLQJIURPWKHVHDWWHPSWVWKDWWKHYLVLRQRIDPRUHYLDEOHDOWHUQDWLYHFDQEHJLQWRHPHUJH

    7KHFULVLVLQWKHZHOIDUHVWDWHDQGWKHHPHUJHQFHRIQHROLEHUDOLVP

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

  •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o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

    7KHHIIHFWVRIWKHFULVLVLQWKHZHOIDUHVWDWHDQGWKHULVHRIQHROLEHUDOLVPDUHFOHDUO\YLVLEOHDWWKHOHYHORIVHUYLFHGHOLYHU\&RQWLQXLQJFXWEDFNVLQSXEOLFVHUYLFHVORZHULQJRIWKHTXDOLW\RIVHUYLFHDVRYHUEXUGHQHGZRUNHUVDUHXUJHGWRGRPRUHZLWKOHVVORQJHUZDLWLQJOLVWVDQGZDLWLQJSHULRGVODFNRIDFFHVVWRKHDOWKFDUHH[FHSWIRUWKRVHZKRFDQDIIRUGSULYDWHLQVXUDQFHWKHGHWHULRUDWLRQRI

  •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

    7KHQHROLEHUDOSHUVSHFWLYH LVQRWDOZD\VUHDGLO\DFFHSWHGE\ WKHSHRSOHDVFDQEHVHHQ LQ WKHUHDFWLRQVRISHRSOHLQWKH(XURSHDQUHJLRQWRWKHDXVWHULW\PHDVXUHVLPSRVHGRQWKHPE\QHROLEHUDORUWKRGR[\IROORZLQJWKH*OREDO)LQDQFLDO&ULVLV&DVWHOOV&DUDo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

    'HIHQGHUVRIWKHZHOIDUHVWDWHKDYHIRXQGLWGLIILFXOWWRFRXQWHUWKHFULWLFLVPWKDWODUJHFHQWUDOLVHG

  •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

    $ZD\IRUZDUG

    7KH DERYH YHU\ FRPSOH[ LVVXHV GHVHUYH PRUH WKRURXJK WUHDWPHQW WKDQ FDQ EH FRYHUHG KHUH 7KHSXUSRVH RI WKLV TXLFN DQG LQHYLWDEO\ VXSHUILFLDO GLVFXVVLRQ LV VLPSO\ WR KLJKOLJKW VRPH RI WKHVSHFLILFREMHFWLRQVWRHDFKRIWKHWKUHHFRQYHQWLRQDOUHVSRQVHVWRWKHFULVLVLQWKHZHOIDUHVWDWHDQGWKHHPHUJHQFHRIQHROLEHUDOLVP)RUWKHSXUSRVHVRIWKLVERRNLWLVVLJQLILFDQWWRFRQFHQWUDWHRQRQHRYHUULGLQJREMHFWLRQWRDOOWKHDERYHUHVSRQVHVWRWKHFULVLVZKLFKFDQEHVXPPDULVHGDVIROORZV

  • 7KHFULVLV LQ WKHZHOIDUHVWDWHDQG WKH WUDJHG\RIQHROLEHUDOLVPDUH WKHUHVXOWRIDZLGHUFULVLVRIDVRFLDOHFRQRPLFDQGSROLWLFDOV\VWHPZKLFKLVXQVXVWDLQDEOHZKLFKKDVUHDFKHGDSRLQW RI HFRORJLFDO FULVLV DQGZKLFK LV RQO\ H[DFHUEDWHG E\ WKH QHROLEHUDO DJHQGD (DFKFRQYHQWLRQDOUHVSRQVHWRWKHFULVLVLQWKHZHOIDUHVWDWHDQGWKHHPHUJHQFHRIQHROLEHUDOLVPLVLWVHOIEDVHGRQWKHVDPHXQVXVWDLQDEOHJURZWKRULHQWHGDVVXPSWLRQVDQGLVWKHUHIRUHLWVHOIXQVXVWDLQDEOH

    7KLV REMHFWLRQ WR WKH WUDGLWLRQDO SROLF\ UHVSRQVHV WR WKH FULVLV LQ WKH ZHOIDUH VWDWH DQG WR WKHHPHUJHQFHRIQHROLEHUDOLVP LV WKHEDVLV IRU WKH UHPDLQGHURI WKHERRNZKLFKDLPV WRGHYHORSDQDOWHUQDWLYH DSSURDFK WR KXPDQ VHUYLFH SROLF\ DQG SUDFWLFH WKDW LV PRUH FRQVLVWHQW ZLWK D WUXO\VXVWDLQDEOHVRFLHW\7KHUHIRUHLWLVDSSURSULDWHWRFRQVLGHUWKLVREMHFWLRQLQPRUHGHWDLO

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o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

  • 0D[1HHI'RRUPDQ*UHFR%RXOHW+RQH\ZLOO7KLVFKDQJHZRXOGFOHDUO\LQFOXGHWKHZHOIDUHVWDWH

    7KHDUJXPHQW WKXVIDU LV LQPDQ\ZD\VFRQVLVWHQWZLWKD0DU[LVWDQDO\VLV LQGHHG0DU[DQGKLVVXFFHVVRUVKDYHFOHDUO\LGHQWLILHGWKHFRQWUDGLFWLRQVRIFDSLWDOLVPDQGKDYHVLPLODUO\VXJJHVWHGWKHQHHG IRU D UDGLFDO UHIRUPXODWLRQ+RZHYHU WKHUH LV D IXQGDPHQWDO GLIIHUHQFH EHWZHHQ WKH0DU[LVWSRVLWLRQDQGWKHDOWHUQDWLYH*UHHQSRVLWLRQRQZKLFKWKLVERRNLVEDVHG0DU[LVWVKDYHVWLOODVVXPHGWKDWFRQWLQXLQJHFRQRPLFJURZWKZLWKDFRUUHVSRQGLQJLQFUHDVHLQSURGXFWLYLW\ZHDOWKDQGSHUVRQDOLQFRPHLVQRWRQO\SRVVLEOHEXWDOVRGHVLUDEOHDQGRQHPLJKWDUJXHQHFHVVDU\,QWKLVWKH\DUHLQDJUHHPHQWZLWKRWKHULGHRORJLFDOSRVLWLRQVLQFOXGLQJERWKQHROLEHUDOLVPDQGVRFLDOGHPRFUDF\,WLVFRPPRQ LQ HOHFWLRQV WR KHDU SDUWLHV IURPPDQ\ GLIIHULQJ LGHRORJLFDO SRVLWLRQV LQFOXGLQJ WKH /HIWDVVXPLQJWKDWWKHZD\RXWRIFXUUHQWHFRQRPLFSUREOHPVLVWRVWHSXSHFRQRPLFJURZWKDQGWRDUJXHDERXWWKHEHVWZD\WKLVFDQEHDFKLHYHG2YHUWKH\HDUVLQDUHPDUNDEOHFDVHRIODQJXDJHVOLSSDJHWKH LGHD RI VXVWDLQDEOH GHYHORSPHQW FRLQHG LQ E\ WKH %UXQGWODQG &RPPLVVLRQ :RUOG&RPPLVVLRQRQ(QYLURQPHQWDQG'HYHORSPHQWKDVPRUSKHGILUVWWRVXVWDLQDEOHJURZWKWKHQLQWKH5LR(DUWK6XPPLWRILQWRVXVWDLQHGJURZWK$QDOWHUQDWLYH*UHHQSRVLWLRQKRZHYHUPDLQWDLQV WKDW HFRQRPLF JURZWK LV DW EHVW D GRXEWIXO EHQHILW LQ WKDW LW FDXVHV PRUH SUREOHPVLQFOXGLQJHQYLURQPHQWDOVRFLDODQGHFRQRPLFSUREOHPVWKDQLWVROYHV,QGHHGLQDILQLWHZRUOGLWLVFOHDUO\OXGLFURXVWRDVVXPHWKDWJURZWKFDQFRQWLQXHLQGHILQLWHO\DQGWKHUHLVDJURZLQJERG\RIHYLGHQFHWRVXJJHVWWKDWWKHHIIHFWLYHOLPLWVWRJURZWKDUHEHLQJUHDFKHG+DPLOWRQ'H

  • &RPPXQLW\EDVHGVHUYLFHVDVDQDOWHUQDWLYH

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

    :LWKLQWKLVFRQWH[WWKHUHLVDQLQFUHDVLQJLQWHUHVWLQFRPPXQLW\EDVHGSURJUDPVDVDQDOWHUQDWLYHPRGHIRUWKHGHOLYHU\RIKXPDQVHUYLFHVDQGWKHPHHWLQJRIKXPDQQHHG:KHDWOH\:KHDWOH\)ULH]H%DOO%DXPDQ%ORFN'H

  • DSSURDFKWRFRPPXQLW\GHYHORSPHQWWKDWRYHUFRPHVWKHVHGLIILFXOWLHVDQGKDVWKHSRWHQWLDOWREHFRPHWKHEDVLVRIDV\VWHPRIKXPDQVHUYLFHVLQDIXWXUHVRFLHW\EDVHGRQSULQFLSOHVRIVXVWDLQDELOLW\

    3UREOHPVZLWKFRQYHQWLRQDODSSURDFKHVWRFRPPXQLW\EDVHGVHUYLFHV

    3ROLFLHVRIFRPPXQLW\EDVHGKXPDQVHUYLFHVKDYHWKHSRWHQWLDOIRUERWKSURJUHVVLYHDQGUHJUHVVLYHFKDQJH$OWKRXJKVXFKDQDSSURDFKPD\SURYLGHDQRSSRUWXQLW\IRUWKHNLQGRIUDGLFDOGHYHORSPHQWVRXWOLQHGLQODWHUFKDSWHUVRIWKLVERRNLWKDVDOVREHHQFULWLFLVHGIRULWVLQKHUHQWFRQVHUYDWLVPRQDQXPEHU RI JURXQGV7KLV LV QRW WKH SODFH WR H[SORUH WKHVH FULWLFLVPV LQ GHWDLO \HW WKH\ QHHG WR EHVXPPDULVHG DQG VSHFLILFDOO\ DFNQRZOHGJHG /DWHU FKDSWHUV VHHN WR GHVFULEH DQ DSSURDFK WKDWRYHUFRPHVWKHVHREMHFWLRQVWRFRPPXQLW\EDVHGVRFLDOSURYLVLRQ

    5HGXFLQJWKHFRPPLWPHQWWRZHOIDUH

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

    7KXV FRPPXQLW\EDVHG VHUYLFHV FDQ UHDGLO\ VHUYH WKH SROLWLFDO DJHQGD RI D JRYHUQPHQW WKDW LVFRPPLWWHGWRUHGXFLQJSXEOLFH[SHQGLWXUHDQGFDQIDFLOLWDWHWKHUHGXFWLRQLQWKHVKDUHRIWKHQDWLRQVZHDOWKJRLQJWRKXPDQVHUYLFHV

    &RYHUWSULYDWLVDWLRQ

    $QRWKHUZD\ LQZKLFK FRPPXQLW\EDVHG VHUYLFHV FDQ VHUYH D FRQVHUYDWLYH SROLWLFDO DJHQGD LV E\SURYLGLQJDUDWLRQDOHIRUWKHZLWKGUDZDORIJRYHUQPHQWUHVSRQVLELOLW\DQGDFRUUHVSRQGLQJPRYHWRDPDUNHWEDVHGDSSURDFK%\VLPSO\ZLWKGUDZLQJIURPVHUYLFHSURYLVLRQORRVHO\XVLQJWKHUKHWRULFRIFRPPXQLW\UHVSRQVLELOLW\DJRYHUQPHQWFDQDOORZWKHSULYDWHPDUNHWWRPRYHLQWRILOOWKHJDS7KLVFDQUHVXOWLQDFRPPXQLW\EDVHGSURMHFWEHLQJRSHUDWHGE\DPDUNHWGULYHQSKLORVRSK\ZLWKWKHJRDO

  • RI PD[LPLVDWLRQ RI SURILW UDWKHU WKDQ WKH PHHWLQJ RI KXPDQ QHHG 7KXV WKH WHUPVFRPPXQLW\ DQGPDUNHW FDQ EHFRPH V\QRQ\PRXV7KLV LV QRW QHFHVVDULO\ VR WKH FRPPXQLW\ GHYHORSPHQW DSSURDFKRXWOLQHG LQ ODWHU FKDSWHUV IRUHVHHV D UHGXFWLRQ LQ GLUHFW JRYHUQPHQW DFWLYLW\ EXW GRHV QRW LPSO\ DQLQFUHDVHGUHOLDQFHRQWKHSULYDWHPDUNHWDWOHDVWLQLWVODUJHVFDOHPDQLIHVWDWLRQ

    7KHIDPLO\

    -XVW DV WKH UKHWRULF RI FRPPXQLW\EDVHG VHUYLFHV FDQ EH XVHG DV D MXVWLILFDWLRQ IRU D UHWXUQ WRUHOLDQFHRQWKHPDUNHW WRPHHWKXPDQQHHGVR LWFDQEHXVHGWRVXSSRUWDV\VWHPZKHUH WKHIDPLO\DFFHSWV DJUHDWHUEXUGHQRI FDUH DVZLWKSULYDWLVDWLRQ WKLV LV VLPSO\ VHHNLQJ WR UHWXUQ WRDQROGHUIRUP RI VHUYLFH SURYLVLRQ ZKLFK LV LQDSSURSULDWH IRU WKH FRQWHPSRUDU\ FRQWH[W 6XFK D WUHQG LVSDUWLFXODUO\VHHQLQWKHILHOGRIFRPPXQLW\FDUH7KLVRIWHQGRHVQRWLPSO\WKDWVRPHIRUPRIORFDODXWRQRPRXVFRPPXQLW\ZLOODFFHSWUHVSRQVLELOLW\IRUDSHUVRQVFDUHDVZRXOGEH WKHFDVHZLWKDJHQXLQHO\ FRPPXQLW\EDVHG V\VWHP UDWKHU WKDW WKH SHUVRQ FRQFHUQHG ZLOO EH FDUHG IRU LQ WKHFRPPXQLW\E\PHPEHUVRIWKHLUQXFOHDURUH[WHQGHGIDPLO\XVXDOO\ZRPHQ,WFDQWKHUHIRUHKDYHWKHHIIHFWRISODFLQJH[WUDEXUGHQVRQIDPLO\PHPEHUVHVSHFLDOO\RQZRPHQZKLOHQRWDFNQRZOHGJLQJWKH SUHVVXUHV DOUHDG\ SODFHG RQ IDPLO\ VWUXFWXUHV DQG WKH EUHDNGRZQ RI WKH WUDGLWLRQDO IDPLO\ LQFRQWHPSRUDU\VRFLHW\

    *HQGHU

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

    7KHW\UDQQ\RIORFDOLW\

    3HUVRQDOPRELOLW\LVDFKDUDFWHULVWLFRIPRGHUQ:HVWHUQVRFLHWLHVDQGLWKDVEHFRPHDFFHSWHGHYHQYDOXHG WKDW SHRSOH VKRXOG WUDYHO ORQJ GLVWDQFHV WR PHHW WKHLU QHHGV IRUVRFLDO LQWHUDFWLRQHQWHUWDLQPHQW HGXFDWLRQ VRFLDO VHUYLFHV DQG VR RQ$ FRPPXQLW\EDVHG DSSURDFK FDQ EH VHHQ DVUHVWULFWLQJSHRSOHWRWKHLUORFDOFRPPXQLW\ZKHQWKH\PD\SUHIHUWRVHHNKXPDQVHUYLFHVHOVHZKHUHHLWKHUEHFDXVHRIDEHOLHIWKDWDEHWWHUVHUYLFHLVDYDLODEOHLQDQRWKHUORFDWLRQRUEHFDXVHRIDZLVKIRUDQRQ\PLW\DQGDGHVLUHWRDYRLGJRVVLSDQGLQWUXVLYHQHLJKERXUV

    /RFDWLRQDOLQHTXDOLW\

  • %HFDXVHVRPHFRPPXQLWLHVDUHEHWWHUUHVRXUFHGWKDQRWKHUVDPRYHWRDFRPPXQLW\EDVHGDSSURDFKFRXOG VLPSO\ UHLQIRUFH H[LVWLQJ LQHTXDOLWLHV EHWZHHQ FRPPXQLWLHV RIWHQ EDVHG RQ FODVV OLQHV&RPPXQLWLHV ZLWK PRUH UHVRXUFHV ZRXOG EH DEOH WR SURYLGH KLJKHU OHYHOV RI VHUYLFH DQGGLVDGYDQWDJHG FRPPXQLWLHVPLJKW EH IXUWKHU GLVDGYDQWDJHG E\ EHLQJ GHQLHG VXSSRUW IURP D VWURQJFHQWUDODGPLQLVWUDWLRQ

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

    7KH DSSURDFK SUHVHQWHG LQ WKH IROORZLQJ FKDSWHUV VHHNV WR RYHUFRPH WKHVH REMHFWLRQV DQG WRGHPRQVWUDWHKRZDFRPPXQLW\GHYHORSPHQWDSSURDFKQHHGQRWEHFRQVHUYDWLYHEXWFRXOGFKDOOHQJHVXFKFRQVHUYDWLYH LGHDVDQGFRXOGKHOS WR LQLWLDWHDQDOWHUQDWLYHVRFLHW\EDVHGRQVRFLDO MXVWLFHDVZHOODVRQHFRORJLFDOVXVWDLQDELOLW\

    7KHPLVVLQJLQJUHGLHQWFRPPXQLW\GHYHORSPHQW

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

    )RU WKLV UHDVRQ WKHGHYHORSPHQW RI FRPPXQLW\EDVHG VWUXFWXUHV VHHPV VRPHZKDW FRQWUDGLFWRU\DQGLW LVOLWWOHZRQGHUWKDWFRPPXQLW\EDVHGVHUYLFHVKDYHSURYHQSUREOHPDWLFDVVXJJHVWHGE\WKHFULWLFLVPVLQWKHSUHYLRXVVHFWLRQ7KHFHQWUDOLVVXHFDQEHVWEHH[SUHVVHGDVIROORZVKRZFDQWKHUH

  • EH FRPPXQLW\EDVHG VHUYLFHV LI WKHUH LV QR FRPPXQLW\ LQ ZKLFK WR EDVH WKHP" 7KH SULPDU\DVVXPSWLRQ RI FRPPXQLW\EDVHG VHUYLFHV PXVW VXUHO\ EH WKDW WKHUH DUH FRPPXQLW\ VWUXFWXUHV DQGSURFHVVHV WKDW FDQ WDNHRYHUDOORU VRPHRI WKH UHVSRQVLELOLW\ IRU WKHSURYLVLRQRIKXPDQVHUYLFHV$OWKRXJKIRUFHQWXULHVWUDGLWLRQDOFRPPXQLWLHVSHUIRUPHGWKHVHUROHVPRUHRUOHVVDGHTXDWHO\LW LVPXFKPRUHSUREOHPDWLFLQDVRFLHW\ZKHUHWKHGRPLQDQWVRFLDODQGHFRQRPLFRUGHUGLVFRXUDJHVWKHHVWDEOLVKPHQWRIFRPPXQLW\DQGXQGHUPLQHVFRPPXQLW\VROLGDULW\

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

    7KHSURPLVHRIFRPPXQLW\

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

    7KH IHHOLQJRI ORVV RI FRPPXQLW\ LV RIWHQ LQWHUSUHWHG DV QRVWDOJLD IRU DQ LGHDO WKDW QHYHU UHDOO\H[LVWHG DQG DGYRFDWHV RI FRPPXQLW\ GHYHORSPHQW KDYH EHHQ DFFXVHG RI LGHDOLVLQJ WKH YLOODJHFRPPXQLW\ZKRVHUHDOLW\ZDVLQPDQ\LQVWDQFHVRSSUHVVLYH7KLVLVDQLPSRUWDQWFULWLFLVPDQGLWLVHVVHQWLDO WKDW WKH QRWLRQ RI FRPPXQLW\ EH EDVHG RQPRUH VXEVWDQWLDO JURXQGV WKDQ VLPSO\ DQ LGHDOHYHQ WKRXJK WKH SRZHU RI WKDW LGHDO DQG WKH LPSRUWDQFH RI YLVLRQ PXVW QRW EH XQGHUUDWHG 7KHFKDSWHUVWKDWIROORZVHHNWRSURYLGHVXFKDIRXQGDWLRQ

    6RFLDOFDSLWDODQGFLYLOVRFLHW\

  •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

    7KH HURVLRQ RI FLYLO VRFLHW\ DQG RI VRFLDO FDSLWDO UHSUHVHQWV D PDMRU SUREOHP IRU :HVWHUQVRFLHWLHV DQG UHGXFHV WKH TXDOLW\ RI OLIH RI WKRVH OLYLQJ LQ WKHP &RPPXQLW\ GHYHORSPHQW LV DQREYLRXVDSSURDFKWRVHHNWRUHYHUVHWKLVWUHQGERWKLQWKHIRUPDOLVHGVWUXFWXUHVRIFLYLOVRFLHW\DQGLQWKHPRUHZLGHUHDFKLQJ LGHD RI VRFLDO FDSLWDO DQG WKLV KDV EHHQ DQRWKHU LPSRUWDQW UHDVRQ IRU WKHUHFHQWXSVXUJHRILQWHUHVWLQFRPPXQLW\GHYHORSPHQW

  • 7KHGDQJHURIDQHROLEHUDOYRFDEXODU\

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

    7KHQHHGVRIVWUDQJHUV

    :LWKWKHEUHDNGRZQRIWUDGLWLRQDOFRPPXQLWLHVDQGWKHGHYHORSPHQWRIPRGHUQLQGXVWULDOVRFLHW\DIXQGDPHQWDOFKDQJH WRRNSODFH LQ WKHQDWXUHRIKXPDQLQWHUDFWLRQZKLFK LQKLVFODVVLFVRFLRORJLFDOZRUNKDVEHHQGHVFULEHGE\7|QQLHVDVWKHFKDQJHIURP*HPHLQVFKDIWWR*HVHOOVFKDIW:KLOH7|QQLHVDQDO\VLV LV FRPSOH[ IRUSUHVHQWSXUSRVHVKLVGLVWLQFWLRQFDQEH VXPPDULVHG DQGJURVVO\

  •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

    ,WVKRXOGEHQRWHGWKDWDSULYDWHPDUNHWDSSURDFKWRKXPDQVHUYLFHVDOVRLQFRUSRUDWHVWKHQHHGVRIVWUDQJHUVPRGHO+HUH WKH SULYDWH FLWL]HQ LV DEVROYHG RI WKH UHVSRQVLELOLW\ WRPHHW WKH QHHGV RIRWKHUV HYHQ WKURXJK WKH SD\PHQW RI WD[HV DQG LQGLYLGXDOV DUH H[SHFWHG WR ORRN DIWHU WKHPVHOYHVWKURXJKSXUFKDVLQJVHUYLFHVLQWKHPDUNHWSODFHSRVVLEO\ZLWKWKHKHOSRILQVXUDQFHDJDLQSXUFKDVHGLQ D PDUNHW 7KLV IRUP RI PDUNHW WUDQVDFWLRQ LQ PRGHUQ VRFLHW\ LQYROYHV OLPLWHG LQVWUXPHQWDOUHODWLRQVKLSVDQGKHQFHLWLPSOLHVLQFRPPRQZLWKWKHZHOIDUHVWDWHDQHHGVRIVWUDQJHUVDSSURDFK

    $ PRYH WR FRPPXQLW\EDVHG VHUYLFHV DQG VWUXFWXUHV DV DGYRFDWHG LQ VXEVHTXHQW FKDSWHUVHVVHQWLDOO\VHHNVWRUHYHUVHWKHGRPLQDQWWUHQGWRZDUGVWKHQHHGVRIVWUDQJHUVPRGHODVHSLWRPLVHG

  • E\ WKH PRGHUQ ZHOIDUH VWDWH ,W VXJJHVWV WKDW WKLV DSSURDFK WR WKH PHHWLQJ RI KXPDQ QHHG KDV QRWZRUNHGZHOO DQG WKDW RQ EDODQFH LWV GLVDGYDQWDJHV KDYH RXWZHLJKHG LWV EHQHILWV ,W LV QHFHVVDU\WKHUHIRUH WR H[DPLQH VRPH RI WKH DGYDQWDJHV FODLPHG IRU WKH ZHOIDUH VWDWH LQ RUGHU WR VHH KRZVWURQJO\WKH\UHSUHVHQWREMHFWLRQVWRWKHGHYHORSPHQWRIDPRUHFRPPXQLW\EDVHGDSSURDFK,WLVWKHFRQWHQWLRQRIWKLVERRNWKDWWKHVHEHQHILWVDUHPRUHDSSDUHQWWKDQUHDO

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

    $GHTXDWHPLQLPXPVWDQGDUGV

    7KHDLPRIDFKLHYLQJDGHTXDWHPLQLPXPVWDQGDUGVRIKHDOWKKRXVLQJHGXFDWLRQLQFRPHVHFXULW\HWFUHVWVRQWZRDVVXPSWLRQVQDPHO\WKDWWKHDWWDLQPHQWRIXQLIRUPPLQLPXPVWDQGDUGVLVSRVVLEOHDQGWKDWLWLVGHVLUDEOH%RWKRIWKHVHDVVXPSWLRQVFDQEHTXHVWLRQHG

    ,WLVGLIILFXOWWRGHILQHPLQLPXPVWDQGDUGVLQFRPSOH[PRGHUQLQGXVWULDOVRFLHWLHV,QPDQ\QDWLRQVUHJLRQDODQGFXOWXUDOGLYHUVLW\PHDQVWKDWZKDWLVDQDGHTXDWHPLQLPXPLQRQHVHWWLQJPD\EHIDUIURPDGHTXDWHLQDQRWKHUDQGPRUHWKDQDGHTXDWHLQDWKLUG,QKRXVLQJIRUH[DPSOHWKHGHILQLWLRQRIDQDGHTXDWHPLQLPXPLVKHDYLO\LQIOXHQFHGE\ERWKFOLPDWLFDQGFXOWXUDOIDFWRUVZKDWZLOOVXIILFHLQRQHVHWWLQJZLOOQRWLQDQRWKHU6LPLODUO\FRVWRIOLYLQJDQGKHQFHDPLQLPXPVWDQGDUGRILQFRPHYDULHVVLJQLILFDQWO\DFURVVUHJLRQVEHFDXVHRIGLIIHUHQWFRVWVRIEDVLFFRPPRGLWLHVGLIIHUHQWWUDQVSRUWQHHGVLQ VRPH ORFDWLRQV FDU RZQHUVKLS LV D QHFHVVLW\ZKHUHDV LQRWKHUV LW LV QRW GLIIHULQJ FOLPDWHV LQVRPHORFDWLRQVKHDWLQJFRVWVDUHVLJQLILFDQWDQGVRRQ7KHLGHDRIDXQLYHUVDOPLQLPXPVWDQGDUGLVGLIILFXOW WR DFFHSW DQG DOPRVW LPSRVVLEOH WR GHILQH LQ RWKHU WKDQ YHU\ EDVLF LQVWDQFHV VXFK DVSURWHFWLRQRIEDVLFKXPDQULJKWVDQGGLHWDU\LQWDNHWKLVH[FHSWLRQKRZHYHULVYHU\LPSRUWDQW'R\DO*RXJKDQGZLOOEHGLVFXVVHGLQFKDSWHU0RVWFRQYHQWLRQDOPLQLPXPVWDQGDUGVVXFKDVWKH SRYHUW\ OLQH DUH WKHUHIRUH RQO\ DSSUR[LPDWLRQV DQG DUH FUXGH PHDVXUHV LQGHHG RI WKHHIIHFWLYHQHVVRIVRFLDOSROLF\

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

  • ,QDQ\FDVH DVZDVSRLQWHGRXW HDUOLHU WKH UHVHDUFKHYLGHQFH VXJJHVWV WKDW WKHPRGHUQZHOIDUHVWDWH KDV EHHQ RQO\ PLQLPDOO\ VXFFHVVIXO LQ PHHWLQJ DFFHSWDEOH PLQLPXP VWDQGDUGV RI SURYLVLRQ*HRUJH:LOGLQJ7KHQHHGIRUWKHPDLQWHQDQFHRIPLQLPXPVWDQGDUGVLVDVDUHVXOWDZHDNMXVWLILFDWLRQIRUWKHFRQWLQXDWLRQRIWKHZHOIDUHVWDWHDQGWKHQHHGVRIVWUDQJHUVPRGHO

    6RFLDOMXVWLFH

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

    ,PSDUWLDOLW\

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

    7KH LPSOLFDWLRQV RI WKLV DUJXPHQW DUH VLJQLILFDQW DQG ZLOO EH WDNHQ XS LQPRUH GHWDLO LQ ODWHUFKDSWHUV ZKHUH WKH FRPPXQLW\EDVHG DOWHUQDWLYH LV VSHOOHG RXW LQ PRUH GHWDLO %XW IRU SUHVHQWSXUSRVHVWKHSRLQWLVVLPSO\WKDWLPSDUWLDOLW\KDVQRWEHHQDIHDWXUHRIWKHPRGHUQZHOIDUHVWDWHDQGWKDWLWUHSUHVHQWVDZHDNMXVWLILFDWLRQIRUWKHQHHGVRIVWUDQJHUVDSSURDFK

    &RQILGHQWLDOLW\

  •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

    $QRQ\PLW\

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

    $FFRXQWDELOLW\

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

    :KLOH WKHVH DFFRXQWDELOLW\PHFKDQLVPVPD\ EH SUHVHQW LQ WKHRU\ WKH H[SHULHQFH RI WKRVH ZKR

  • ZRUNLQWKHZHOIDUHVWDWHLVWKDWWKH\RIWHQGRQRWZRUNZHOOSDUWLFXODUO\IRUWKHUHODWLYHO\SRZHUOHVVDQG LQDUWLFXODWH FRQVXPHU 6RSKLVWLFDWHG PHFKDQLVPV KDYH GHYHORSHG ZLWKLQ EXUHDXFUDFLHV WRPLQLPLVH WKH HIIHFWV RI DFFRXQWDELOLW\ PHFKDQLVPV DQG LQGHHG WKH EXUHDXFUDF\ QHHGV VXFKPHFKDQLVPVIRUVXUYLYDO

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

    6SDFH GRHV QRW SHUPLW D IXOO RXWOLQH RI WKH REMHFWLRQV WR WKH QHHGVRIVWUDQJHUV DSSURDFKFKDUDFWHULVWLFRI WKHPRGHUQZHOIDUH VWDWH EXW WKH DERYHGLVFXVVLRQ VKRXOGDW OHDVWEH VXIILFLHQW WRGHPRQVWUDWHWKDWWKHPDLQDUJXPHQWVLQVXSSRUWRIVXFKDPRGHODUHQRWQHFHVVDULO\YHU\VWURQJ7KH\VKRXOG QRW WKHUHIRUH EH VHHQ DV VLJQLILFDQW LPSHGLPHQWV WR WKH GHYHORSPHQW RI D FRPPXQLW\EDVHGPRGHO6RPHRIWKHVHLVVXHVZLOOEHH[SORUHGLQPRUHGHWDLOLQODWHUFKDSWHUVWRWKHH[WHQWWKDWWKH\LQIRUPWKHDSSURDFKWRSROLF\DQGSUDFWLFHGHYHORSHGLQWKLVERRN

    7KHQH[WVWHSV

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

  • )RXQGDWLRQVRIFRPPXQLW\GHYHORSPHQW$QHFRORJLFDOSHUVSHFWLYH

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

    7KH HFRORJLFDO SHUVSHFWLYH RXWOLQHG ODWHU LQ WKLV FKDSWHU GHULYHV IURP WKH*UHHQ FULWLTXH RI WKHFXUUHQW VRFLDO HFRQRPLF DQG SROLWLFDO RUGHU 7KLV FULWLTXH UHSUHVHQWV D SRZHUIXO DQG IXQGDPHQWDOFKDOOHQJHWRPDQ\RIWKHDFFHSWHGQRUPVRIVRFLDODQGSROLWLFDOGLVFRXUVH,WLVDFKDOOHQJHWKDWLQWKHWZHQW\ILUVW FHQWXU\ FDQ QR ORQJHU EH LJQRUHG DQGZKLFKZLOO LQHYLWDEO\ SOD\ DPDMRU UROH LQ WKHVKDSLQJRIDIXWXUHVRFLHW\

    &ULVLV

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

  •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

    7KHVHLPSHQGLQJFULVHVKDYHOHG*UHHQWKLQNHUVWRVHHNUDGLFDODOWHUQDWLYHVDQGWKHVHFULVHVDOVRJLYHWKH*UHHQSRVLWLRQDVHQVHRIXUJHQF\DQGLQHYLWDELOLW\)URPD*UHHQSHUVSHFWLYHFKDQJHLVQRWD OX[XU\ WKDW FDQ EH SRVWSRQHG XQWLO WKH WLPH LV ULJKW WKH SUREOHPV DUH XUJHQW DQG LPPHGLDWH DQGIDLOXUHWRDFWFRXOGSODFHWKHIXWXUHRIKXPDQFLYLOLVDWLRQDQGLQGHHGWKHYHU\VXUYLYDORIWKHKXPDQUDFHDVZHOODVPDQ\RWKHUVSHFLHVDWULVN

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

  • DQGPHGLDFRYHUDJHDOOWKHVHSUREOHPVDUHVWLOOZLWKXVDQGWKHLQGLFDWLRQVDUHWKDWHDFKLVJHWWLQJZRUVH(DFKLVVXIILFLHQWWRFDXVHPDMRUFRQFHUQDQGUHTXLUHVLPPHGLDWHDQGVLJQLILFDQWDWWHQWLRQDWORFDO QDWLRQDO DQG JOREDO OHYHOV 7KH\ SRWHQWLDOO\ WKUHDWHQ WKH ORQJWHUP RU HYHQ PHGLXPWHUPVXUYLYDORIWKHKXPDQUDFHRUDWWKHYHU\OHDVWRIFLYLOLVDWLRQ+RPHU'L[RQ7DNHQWRJHWKHUWKH\ LQGLFDWH DQ RYHUDOO FULVLV RI HQRUPRXV PDJQLWXGH DQG LW LV RQO\ ZKHQ WKH\ DUH FRQVLGHUHGWRJHWKHUWKDWWKHVHULRXVQHVVRIWKHFRPLQJSHULRGRIFULVLVFDQEHIXOO\DSSUHFLDWHG

    (QYLURQPHQWDOUHVSRQVHVDQG*UHHQUHVSRQVHV

    ,QFRQVLGHULQJWKHUHVSRQVHVWRWKHVHFULVHVDQLPSRUWDQWGLVWLQFWLRQQHHGVWREHPDGHEHWZHHQZKDWZLOOKHUHEHUHIHUUHG WRDVHQYLURQPHQWDO UHVSRQVHVDQG*UHHQUHVSRQVHV2WKHUZULWHUVKDYHXVHGGLIIHUHQW WHUPLQRORJ\ VXFK DVOLJKW JUHHQ DQGGDUN JUHHQ 'REVRQ HQYLURQPHQWDO DQGHFRORJLFDO%RRNFKLQRUGHHSDQGVKDOORZHFRORJ\)R[

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

  •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

    7KHSHUVSHFWLYHRIWKLVERRNDFFHSWVWKH*UHHQUDWKHUWKDQWKHHQYLURQPHQWDOYLHZRIHFRORJLFDOSUREOHPV ,I WKHHFRORJLFDOFULVLV LV WREHHIIHFWLYHO\ UHVROYHG LWZLOOEH WKURXJKVRFLDOHFRQRPLFDQGSROLWLFDO FKDQJH UDWKHU WKDQ WKURXJK VFLHQWLILF DQG WHFKQRORJLFDO SURJUHVV&RPPXQLW\ZRUN LVSRWHQWLDOO\RQHRIWKHPRVWHIIHFWLYHZD\VWRGHYHORSDPRUHVXVWDLQDEOHVRFLHW\DQGLVWKXVGLUHFWO\UHOHYDQW WRD*UHHQDQDO\VLV7KHH[SHUWLVHRIFRPPXQLW\ZRUNHUV LQ WHUPVRIERWKNQRZOHGJHDQGVN