OFFERING MEMORANDUM:  Development Investors Inc. February 24,1982

          Economic activity accomplishes most under private ownership. Developing countries possess many attributes attractive to private investors. Investors, however, have typically preferred the climate of the already-developed countries. Another technique must be found to overcome the constraints to capital flow that presently leave developing countries so severely disadvantaged. DII will overcome obstacles to productive investment through a judicious choice of projects,  location, incentives offered by host countries, and experienced development specialists. Profit will be an indispensable measure of success, but profit alone is an inadequate motivation for any of DIIís organizers.


Courtney A Nelson - Beirut 1973

Angkor Wat, 1955


          Funding in the amount of $250,000 is sought to finance the launching of Development Investors Inc. (DII), a new type of venture capital enterprise having as its purpose the identification, design and implementation of financially sound investment opportunities possessing high development value. DII will seek these opportunities in carefully selected countries in the developing world. DII will be guided by the twin criteria of profitability and high developmental impact. 


          The legal form which DII will take, the jurisdiction in which organized, and its capital structure will be determined after due consideration of all relevant considerations and in consultation with the party or parties providing the initial financing for the enterprise. Beneficial ownership of DII will be allocated in the following proportions:  49 % to the investors and 51 % to the organizing principals, Donald Paradis, David Gordon, and Courtney Nelson. Other principals who join as principals during the period of initial operations will be allocated a percentage of ownership out of the 51 % earmarked for the organizers.

Use of Initial Capital

          DII's initial funds will be used in accordance with the preliminary budget (Exhibit A) to establish an office in Washington, D.C., to finance exploratory visits to selected developing countries, to identify promising investment opportunities, and to carry agreed projects through to the implementation stage. It is anticipated that initial efforts will concentrate on the agribusiness field. Among the regions presently under consideration are North and East Africa (Egypt, Kenya, and Somalia), the Caribbean (Jamaica and Barbados), and the Far East (the Philippines, South Korea and Indonesia).

Individual Project Funding

          As project opportunities reach the implementation stage, they will be developed as separate business entities, with the requisite additional financing and essential technological and management expertise being organized and provided by DII. The owners of DII will be given the opportunity to participate in the provision of required financing on a priority basis. The owners of DII will in any event acquire an interest in each such business opportunity, by virtue of their ownership in DII.

Future Funding of DII

          It is anticipated that by the end of the first year of operations, DII will have acquired equity positions in one or more projects. However, because of the inevitable time lag between the start-up of a given project and the generation of dividend revenues, it will be necessary for DII to raise additional capital. With a successful performance record already established, DII will have ready access to sources of finance interested in participating in DII's on-going development investment activities. Further financing should thus be available on favorable terms.


          DII proceeds on the proven assumption that productive economic activity achieves its most efficient and economic levels under private ownership. Developing countries characteristically possess many attributes attractive to private investors, such as low-cost labor and under-utilized natural resources. Ideally, then, private enterprise should be playing a major role in the economies of the developing world. Unfortunately, experience is otherwise.

          In practice, except for the extractive industries and some services, such as banking, investors have typically preferred the climate of the already-developed countries. The reasons for this are familiar; developed countries promise the security of investment from political instability and freedom from the threat of confiscation, better capital and real estate markets, and the ready availability of skilled labor and experienced management.

          In particular, the pronounced tendency in recent years for the oil-exporting states to prefer developed country investments has severely disappointed the poorer countries of Africa and elsewhere, and contributed to a distinct slowing of the pace of worldwide development. This is not said in criticism of those in the capital-surplus, oil-rich states; as the guardians of the revenues derived from a wasting asset, they would be remiss in discharging their obligations to future generations if they took undue risks with their temporary surpluses.

          The clear conclusion, then, is that another technique must be found to overcome the constraints to capital flow that presently leave developing countries so severely disadvantaged. It is to this problem that DII will address itself.

The DII Strategy

          DII believes that the obstacles to productive investment in the developing world can be overcome through a judicious choice of projects and their location, by taking maximum advantage of incentives offered by host countries and the governments of developed nations as well, and by associating experienced development specialists in the launching and management of carefully selected projects in accordance with a carefully planned strategy.

          DII will concentrate on investment opportunities that will optimize the security as well as the profitability of the investment. They will normally be in the agribusiness field or in labor-intensive industries that have been accorded high priority by the governments of the developing countries and are hence most eligible for government protection and incentives. High risk-high profit ventures such as mineral exploitation will not be pursued, in part because of the high risk involved and in part because they do little to contribute directly to the development process. Profit will be an indispensable measure of success, but profit alone is an inadequate motivation for any of DIIís organizers.

          DII will optimize security and profitability by the following strategy:

          a. Seek projects in areas actively promoted by host governments. This will facilitate access to favorable local sources of finance (development funds and finance institutions), tax incentives, research and extension activities, and other measures offering technical support.

          b.  Spread risk by operating in several developing countries, but only those which explicitly welcome foreign investors, such as Egypt, Jamaica, Barbados, and Kenya, among others.

          c. Organize separate ownership arrangements for each project, with DII sharing ownership with other sources of finance. Joint ventures will be preferred in order to take maximum advantage of local knowledge and talent.

          d. Work closely with government assistance programs where special inducements for private investment are offered. Typical U.S. programs include OPIC, for investment insurance; ExIm Bank, for credit; and the Generalized System of Preferences, which offers preferential treatment to exports from selected countries, including Jamaica and Barbados. Other tariff agreements offering important advantages are Canada's BSP, the Lome II Convention, and CARICOM for the Caribbean region. In the developing world, Egyptís Private Investment Encouragement Fund, the Philippines Industrial Guarantee and Loan Fund, and a major agribusiness project in Jamaica that provides investors with technical assistance, credit and feasibility studies may be cited.

The Organizers

DII's principal organizers have all lived and worked for many years in the developing world, particularly in Africa and Asia. They bring to the undertaking

  • an exceptional and wide-ranging experience in the developing world and a profound knowledge of the development process;
  • familiarity with the working conditions in the developing states, and a lively awareness of the local comparative advantages and disadvantages impinging upon particular development investment projects;
  • high-level contacts in many of the countries in which DII will be active;
  • a broad range of professional acquaintances in major private financial institutions and such international organizations as the World Bank and the Ford Foundation;
  • proven and successful experience in business and financial management and organization.

See Exhibits B, C, and D for brief biographical sketches of Messrs. Paradis, Gordon and Nelson.

Exhibit A:  First Year Budget

Organization Expenses                                              $   4,000

Office Expense (Washington, D.C.)

          Rent                                 $  15,000

          Furnishings                              5,000

          Equipment                               5,000

          Secretarial Services                15,000

                                                 $  40,000                40,000

Communications                                                          4,500

Compensation to Organizers

          $250 per day for 100 days x 4 (est)                  100,000

Services of Technical Consultants                                 40,000


          Airfares                            $  25,000

          Per diem ($100 x 50 x 4)         20,000

                                                $  45,000                 45,000

Contingency                                                             16,500


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