To: Clark Hansen 

From: Nathan Viennet 

Date : 03/08/2024

Subject : SmartFish investment proposal 

This memorandum has the intention of putting forth a potential investment that could be highly beneficial to Anima Mundi. SmartFish is a Mexican based company that flawlessly embodies the triple bottom line that we value here at AMDP. The Smartfish group is composed of 2 entities, the SmartFish NGO and SmartFish Inc, both work in synergy with fishing cooperatives in Baja California (Mexico) to help them “earn more by fishing less”. The NGO trains the fishermen to  better practices while Smartfish Inc, which I believe we should invest in, buys their production for up to 400% the price they would get for it otherwise. These practices help protect the fishermen but also the environment in which they live, as their fishing practices are far less damaging to the environment. 

Definitions : 

• Triple bottom line : “The triple bottom line is a business concept that states firms should commit to measuring their social and environmental impact—in addition to their financial performance—rather than solely focusing on generating profit, or the standard “bottom line.” (Harvard business school) hbs.edu

• Corporate social responsibility : “Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public” (investopedia) investopedia.com

• Social enterprise : “A social enterprise or social business is defined as a business with specific social objectives that serve its primary purpose. Social enterprises seek to maximize profits while maximizing benefits to society and the environment” (investopedia) investopedia.com

• Carbon footprint : “A carbon footprint is the total amount of greenhouse gases (including carbon dioxide and methane) that are generated by our actions” (the nature conservancy) nature.org

Smartfish now: 

Smartfish is spearheading many new practices in the Mexican food industry but fishing remains their primary occupation and the one that will be critical to their successful IPO in 2025. They are currently seeking investment for new and improved infrastructure around Baja California as well as for shipping across Mexico and the US. 

The plant: 

They plan to construct a processing plant in La Paz (Baja California) to further reduce costs for them and to potentially increase the fisherman's pay. In order to maximize the use of this processing plant, Smartfish intends to work with at least 30 new cooperatives on the pacific coast of Mexico, augmenting their input tenfold. The plan for this operation is already well established, their finances are mostly in order and considering their growth in recent years their plan is quite feasible. 

Initial public offering and timeline: 

Smartfish estimates that they will receive funding in 2024 and will be able to have their IPO in 2025. The expansion will take place in its majority in the first 5 years after the IPO, over which the company’s profits are expected to increase by nearly 1000%, stimulating new growth in both their online and brick and mortar businesses (Smartfish plans to open 7 new stores in Mexico during that time). 

In most aspects this is not even as much a restructuring as it is more of the same, however this is incredibly important for Smartfish as it could put their name on the map, after which their growth would aliment itself. 

External opinions: 

Crunchbase: this first source covers all of Smatfish’s public financials, that being mainly covering their last investment round. So far Smartfish has had one non equity assistance round in oct of 2020, nearly four years ago. As of now Smartfish remains a private company and their next round of investment will be selling between 10 and 15% of equity for 2 million dollars. They also are working with unnamed funds for the rest of the money which will be debt. 

Solve MIT: puts more of an emphasis on their methods and triple bottom line philosophy. They essentially backup Smartfish’s claims and show exactly why models like theirs are so important in developing economies. Smartfish are indeed ecologically responsible in that they allow fishermen to not take part in overexploitation and prevent any use of destructive fishing methods such as using nets. Secondly they do in fact pay their partners up to 400% for their, however fishermen do actually produce much less than they would under normal conditions so they do not actually earn 5 times as much. Although according to Solve, Smartfish’s system does represent a significant augmentation nonetheless. 

Recommendation: 

In the light of these expert opinions and analysis of the company, as well as their willingness to invest in Smartfish Inc, I can only recommend Smartfish for a deeper analysis on our part. A thorough analysis of their financials, would reveal how sound their expansion plan is on an economical level and justify an investment or rejection of Smartfish. 

I recommend we invest in this social enterprise for two reasons and in two ways. First I believe it is crucial for AMDP to both invest in Smartfish Inc through liquidity and through equity. These two things are mutually beneficial as the success of one only encourages the success of the other. for their plan to work it is imperative that both their liquidity sources are successful. Smartfish is looking for 2 million USD in debt and 2-3 million USD from equity. If AMDP loans funds to Smartfish and its plan is successful the company's valuation will increase, and so will their equity. This is why AMDP must also invest in their equity so that they may profit from Smartfish’s success. This is completely free and legal insider information and if we deem that their plan is likely to be successful this is the course of action that should be followed.