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Collaborative Strategies for Funding an Ecological Operating System

            It is often the case that new and unprecedented initiatives are difficult to fund in the early stages of development.  As a result, it is important to consider alternative strategies that might ultimately contribute to the very character of the initiative itself.  In this context, we will investigate the concept of collaborative funding as an evolution of crowd funding as a means of supporting new urban development strategies that existing developers and real estate investors have not considered.  Moreover, we will do so in the context of initially funding a model typology that can then be replicated throughout a neighborhood.  In doing so, we will examine the merits of securing a small buy-in from a large number of individuals upfront. 

            In doing so, we should consider collaborative funding beyond the crowd funding a model that exists via particular crowd funding websites such Kickstarter, Indiegogo, and Gofundme.  In this sense, we might consider collaborative funding via a proprietary funding platform connected to a broader Ecological Operating System, collaborative funding via a coalition of investors, or crow-funding via a broader media endeavor that invests in a story that drives the development process.  The source of such funding could be from an international group of people interested in alternative means of developing the city, a coalition of investors, or a group of local residents.  At the same time, we should be aware that collaborative funding would not have to be used throughout the development process, but could be merely the spark that leads to future large scale investment. 

            It should be clear that although we are beginning by funding a model typology, the collaborative funding ultimately is of an Ecological Operating System that supports the creation and management of space, the energy required to support that space, and those who inhabit this space.  Such a system would be a platform that supports the construction of and management of the city in such a way that is understandable by residents rather than as a product strictly designed for engineers and administrators.  In doing so, it would be possible to fund different parts of the Ecological Operating System through different coalitions of investors that range in size and type.  The result, would be to create a considerable degree of focus within the field of investment and construction in order to create something that would have been impossible independently.

            In what follows, I will very briefly elaborate on the argument for engaging collaborative funding in the urban planning and construction process.  The purpose of this argument is to attract parties who might help support the financial, political, social, and media conditions that would be required for collaborative funding to be successful.  In this sense, they are presented in order to lay the groundwork for attracting the large number of people required to transmit the message to as many people as possible.

I. From Crowd Fund to Collaborative Funding

            Collaborative funding an EOS is a maturation of crowd funding.  It is the ideal use of the platform.  It is a means of integrating various fragmented projects that support new ways of existing.  Both crowd funding and collaborative funding allow for investors who share a belief in the demand that a project addresses to take direct action.  Collaborative funding, however, aims to create additional alignment of the various goals and capacities of those who participate in order to capitalize on each investor’s unique position.  Moreover, collaborative funding aims to enhance dialogue and create longer term stakes and rewards than might be the case with crowd funding.  Such action is particularly vital in situations where apathy, tradition, and fear stand in the way of future investment.  In this sense, it would fund activities that have merit, but that fall between the lines of traditional funding sources.

II. Why?

            We should engage in collaborative funding because the current investment structure is flawed.  It is unable to address the particular situation that faces the city.  It is unable to address the crisis because of the type of risk that is involved.  Unlike many investment opportunities, investing in the city involves a physical involvement of depreciating material assets rather than a virtual risk of financing a digital product that can often be re-worked in order to pivot towards a more lucrative return on investment.  In addition, it occurs within the context of industries that are often associated with historic sources of wealth rather than with agile, lean, and cutting edge businesses that show new pathways leading to extreme returns on investment.

            In this context, it is essential to convey the extent to which an EOS is scalable and that new means of scalability in the building industry are rare, but have always led to great potential for profit.  In conveying this scalability, we must describe how our work goes beyond a repeatable type – such as a modular home, franchise, or building component with mass applicability – by integrating the type of scalability found in cutting edge digital technology companies via the design of an EOS that can support a wide range of modes and cost of living, support all the aspects of life, is rendered in its totality as an image and catalog, and that does so by relying on digital technologies to integrate the components and subsystems in order to drive the overall efficiency.  This scalability is explored further in Planning and Urban, Suburban, Town, Regional, and National Ecological Operating System.

            At the same time, we should engage in collaborative funding because the crisis of the city is dire and we cannot wait any longer for investors to become interested.  Engaging collaborative funding will help to move beyond developments that are confined to high end condos, townhouses, big box malls, and subsidized dwelling units.  It would make it possible for the fate of the city to be placed in the hands of its citizens rather than entirely controlled by large financial interests that often have little connection to the neighborhoods that they create.  The result would be a development process that brings unprecedented transparency to planning and development.

III. For Whom?

            Revenue from collaborative funding will first be used to create a model dwelling typology that will become the source of inspiration for development throughout a neighborhood and city.  This initial unit will be an unprecedented investment in a struggling neighborhood that will create hope.  It will benefit the broad consumer class of those interested in sustainable dwelling and the current community through the attention and ultimate investment that it will bring.  The revenue from collaborative funding will indirectly benefit an entire community and city. 

            Potential funders will be attracted by this capacity to benefit a wide range of individuals.  They will also be attracted by receiving an ownership stake in the model dwelling unit.  This ownership stake might also be in the building technology and smart housing technology.  They will be attracted by the support of Naught in managing, marketing, and ensuring that the development process takes place beyond the initial model unit.

            In the current context, we are seeking to raise $7.5 M and are prepared to offer stakeholders a return on investment via the sale of the model typology as well as a 29% ownership stake in the model typology that would entitle the stakeholder to a share of the profits from rental and food production.  This stake will be different depending on the size of the investment.  It also might involve shares in different programs and technologies associated with the model.  Although such a return might only be a token that does not given a small investor a sizable return, it would be a bridge to greater profits in the future and set a precedent for a link between global capital and local property.  Moreover, it would establish a precedent of being able to profit generally from an investment in the future of the city as opposed to only being able to profit directly from developing a specific space.

            Ultimately, the desirability of such an investment would rest on the capacity to go beyond a token profit by maximizing revenue through cyclical revenue sources such as food, rent, and products.  In doing so, each deal would have to take on more or less external control.  In this sense, it would determine the extent to which the “deal” was subsidized.  Doing so, would require a high degree of productivity that ultimately rests on the capacity to convince other places and cities to adopt this model by illuminating the added efficiency that the system allows for.

IV. The Upside of Collaborative Funding

            Collaborative funding will make it possible for a community to take ownership of how their community develops from an early stage.  In addition, collaborative funding might create opportunities to reward funders with artwork that is produced as part of the development process.  In doing so, it would standardize the role of art from an early stage in the process.  Contributors would be able to expect access to a unique work of art that traces the transition of the neighborhood.  Moreover, it would accrue value over time. 

            Collaborative is an opportunity to install a media presence throughout the process.  Such a media presence might be a documentary or even narrative film that holds the team accountable to goals set during the process.  This presence might also be the team that markets the campaign and the spaces and products that result.  Ultimately, the goal would be to get a celebrated filmmaker or documentarian to lead the process.  Collaborative funding in this context would capitalize on the recent trend of some of the most innovative filmmakers to use crowd funding to finance projects that studios feel won’t produce sufficient returns within the extremely costly studio stystem.

V. Broader Implications

            A distributed funding model could support a direct correspondence between the space that one inhabits and one’s investment stake in it.  It would ultimately allow humans an unprecedented capacity to make decisions about the space in which they live through how they invest directly in it rather than through the officials they choose to elect.  It would allow people to invest directly in the control systems that structure life.  Early investors would have a greater capacity to profit from the system.  They would ultimately be able to participate in the rate at which centralized wealth is released to support the development of new neighborhoods.

VI. Rate of Investment

            It is important to encourage a gradual acceptance of a collaborative funding system.  A transitional structure is required that would be capable of migrating capital investment from the current framework to the new framework through various methods of translation.  Such methods have been outlined in Plan for the West Side of Chicago and Framework for Development as well as in Urban, Suburban, Town, Regional, and National Urban Ecological Operating Systems.  In large part, it would occur through creating opportunities for investment in various aspects of the system and the catalog of goods and services that it provides to help users facilitate a transition to a more energy efficient manner of living. 

VII. Scales of Collaborative Funding

            The beauty of collaborative funding is that it reflects the broad structure that makes development possible.  It is a reflection of the coalition building that is required and of the community that ultimately might be served.  Funding through a collection of smaller stakeholders reflects the multiplicity of larger investors who will be required to make the system function at various scales and points throughout the country.

VIII. Faith

            Collaborative funding an EOS will illustrate faith in the future of the city in the minds and hearts of a wide range of individuals and organizations.  It will illustrate the desire of an external group to change a condition.  Ultimately, it will illustrate a faith in utopia that ultimately can support a direct connection between investment and power ­– both political and economic – that is derived from this new market.

IX. Management Process

            Naught Company is the driving force behind the investment process.  We are responsible for carefully orchestrating the rate at which all scales of stakeholders become involved.  Naught ensures that reasoned choices are made and that speculation does not take hold.  Moreover, we are responsible for recruiting larger-scale investors who makes a public commitment, a visionary civic leader, and an internal management and design team.  In this sense, we ensure that the rate of investment is carefully tailored to demand and that the manner by which it occurs is done in such as way so as to increase demand.  At the same time, we are aware of the potential for interest in an Ecological Operating System to increase rapidly and require us to quickly develop investment opportunities in order to capitalize on the momentum.

X. Paradigm Shift

            A paradigm shift will occur through an EOS.  It will support the representation of new perspectives of a wide range of groups.  It will support a new capacity to see the humanity in all of the men and women who have not been given sufficient opportunities to participate in the development of space.  It will support a capacity to include them in a new economy through trust and education.  At the same time, it might support an ability to expel those who do not make an effort to improve their capacity to engage in creating and maintaining space and the broader EOS.  In this sense, the collaborative that fuels the initial model housing typology will be the test group that negotiates these perspectives.  In moving beyond the initial model and securing the paradigm shift, we must recognize the need to balance ownership of current stakeholders of the community with large companies that could accelerate positive change.