What We Are Doing
Lighthouse One, Inc.
is a creating an investment platform to bring
investors in opportunity zones together with investable projects
– both real
estate and operating businesses. The platform
enables investors to match their
exact investment needs in terms
of geographies, risk
profile, expected return,
and investment thesis
with projects available; it also
supports syndication of deals and creation of diversified portfolios.
The Tax Reform Act of 2018 created
8,700 Opportunity Zones throughout the country and established pathways
for investors to reduce, defer,
and eliminate their
capital gains while
investing in their
communities. The legislation has widespread bi-partisan
support, as it enables
money to flow into communities that
traditionally are either
very low- income
-or- otherwise do not get
their fair share
of investment dollars. Some of the
communities are downtrodden with great
potential e.g. Birmingham AL; others are high performing e.g. all of Portland OR is an Opportunity Zone.
Key Finding
While the tax benefits to potential investors is significant, many
high potential investors are sitting on the sidelines. The root
cause here is program architecture coupled
with a mismatch
between what investors want to invest
in and the early investment projects available.
To get investors off the sidelines and making OZ investments, we will target
the technology and crypto elite
who live and work in San Francisco, New York, and
Puerto Rico. The real
momentum in the
OZ market will
come by reducing friction for these
investors and making
high-quality investments available to them that match
their investment needs.
While the OZ program has been interpreted as supporting investment in real estate, the most compelling benefits to investors come from investing in operating businesses.
Reducing Friction
The OZ program
was architected in two parts.
A relatively shallow
incentive that defers
and forgives up to 15% of capital gains achieved
today; the more compelling benefits happens on the back
end with a 100% elimination of capital gains
on the investment in an Opportunity Zone so long
as you invest
for 10 years.
The only
way to unlock
these tax benefits is to invest
through a Qualified Opportunity Zone fund.
Many family offices
and high-net worth individuals do not want
to put their money to work through
a traditional OZ fund, preferring to trust their
own judgment (¡°Do it Yourself¡±) as to what to invest
in versus relying
on the judgment a first-time fund manager
(¡°Do it For Me¡±). When they invest,
tech and crypto
investors want to syndicate deals
to reduce
their exposure to any one deal. Also,
they want someone
else to handle
the very real
compliance headache needed to unlock
the tax benefits. (Lighthouse One will
handle all of this plus
the creation of diversified portfolios on its platform.)
Mismatch with
Investor Needs
Technology and crypto investors often seek to invest for transformative change
in industries and communities and therefore invest for a higher risk/return
profile. Most OZ Funds target
low-risk investments with
steady returns – primarily real estate - which is a mismatch with the technology-and crypto
investors we intend
to target.
We will exploit
this mismatch by creating an investment platform
that will enable
do-it-yourself accredited investors to invest
$50,000 or more
in a set of highly-curated projects – both real
estate and operating businesses -- that qualify
for OZ tax treatment.
Lighthouse One
intends to reduce
barriers and enable
investors to put their money
into OZ projects while developing a community of conscious, active
investors, and projects
that can take
the lead in the OZ ecosystem,
complimenting existing mechanism and reducing friction
across the OZ landscape.
We also believe
our offering will have great
appeal to family
offices and private
capital across the country that seeks to make systematic change in communities but so far are not being offered
projects with an underlying theory
of change or achieving scale.
Angel List
as a Model
Lighthouse One, Inc.
is modeling its business model
on the success of Angel
List. Like Angel
List, we will
take a syndication fee from project owners
to list and market the project on the Lighthouse One, Inc. In addition, we charge investors a compliance fee and take
5% carry on deals financed
through our platform. Larger deals will
be handled as 2/20% funds
where we act as principals in raising money.
The types of deals we are interested are those that can lift up a community based
on an investment thesis that
real estate
ALONE is not sufficient to lift up the type of lower-income communities that have been declared as Opportunity Zones. In addition to real estate,
communities need investment in infrastructure and in the
types of companies that can
create jobs and
build up its talent
base:
¡¤
businesses with fixed-place capital investments such as solar/distributed energy, data centers/broadband, urban agriculture
¡¤
advanced factories serving regional markets
including those that
disrupt the cost
equation of housing
and construction
¡¤
businesses with scalable
operational expertise fundamental to all community development such as workforce development/training
Ultimately, our goal
is to build value for
investors in Lighthouse One by creating
primary demand for
these types of investments
while encouraging experimentation with new methods of financial
innovation and community wealth building.
COMPANY OPERATIONS
Lighthouse One, Inc.
operates as a Qualified Opportunity Zone business with
offices in San Francisco (Excelsior District), Portland, and Los Angeles
(West Hollywood).
We are seeking
$1.0 - $1.5M in angel
financing plus $6.0
- $7.0M in a Series
A. Proceeds will be used
to build out a team of professionals to vet deals,
create a network
that will refer
both investable projects and investors to us, and to support
both customer acquisition and compliance. Spending on technology will be light
initially as we will rely on an outsourcing model.
This – by the way
– is the exact way
Angel List got
its start, outsourcing much of its technology to Assure.
Initial financing comes
from Unicorn.vc, an angel
investment fund based
in Puerto Rico;
Puerto Rico has
become home to some 1,500
crypto billionaires and
millionaires due to its favorable tax treatment. Also,
Puerto Rico is offering an additional 15% shelter on capital gain
– over and above that offered
by the federal
program.
Executive Team:
▪
Peter Hirshberg
– CEO* - ex Apple Computer, respected
Urbanist, enterprise software
guru
▪
Marcia Kadanoff
– President/COO* - ex Apple
Computer, respected technology executive, former agency
principal
▪
Christopher Petzel – Chief Investment Officer*
- ex Houlihan Lokey investment banker, expert in structured
finance
▪
Stephen Brooks
– SVP/Chief Compliance Officer – director
of Portland OZ initiative, expert in community
development
▪
Nick Burnett
– VP Business Development
▪
Barry Watkins
– VP Business Operations*
Advisors:
▪
Brock Pierce
– Founder, Unicorn.vc; access to the
crypto elite
▪
Steve Glickman
- Coauthor of the Opportunity Zone legislation, respected
consultant
▪
Novogradac – Leading accounting firm in the OZ ecosystem
▪
Chris Flannery - Security Law
*Company founders.
For More
Information
Peter Hirshberg CEO & Co-Founder (917) 678-3446
peter@lighthouse.one
Marcia Kadanoff President/COO & Co-Founder (650) 270-4309
marcia@lighthouse.one
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