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September 2017

Arrow Global Capital CEO Invests in Change

by Lori Williams

Talk to the CEO of Arrow Global Capital, and two things become clear: Chad Jordan doesn’t promise a financial return to investors. In fact, he wants to go out of business. So how is it that his company is ready to put half a million dollars into SMEs in Macedonia, Guatemala, and Rwanda? “At Arrow,” Chad says, “we’ve created a way for people to invest in emerging entrepreneurs through a non-cash investment.”

“Instead of writing a check to a charity or non-profit,” he explains, “you can keep your money while using it as a business tool that helps one person, then one small community, and then a plethora of people.”

These claims are possible because, as Chad puts it, “Arrow builds a bridge between the entrepreneur and the local financial market.”

After a philanthropist/investor decides to partner with Arrow, Chad takes the first step: borrowing funds from an American bank based on the investor’s balance sheet. At the same time, relationships are developed with, and between, the in-country bank and business accelerator while Arrow thoroughly vets an SME that is ready to scale. The leveraged funds are channeled through the in-country bank at a competitive interest rate.

“There’s about a ten trillion dollar gap in SME lending around the world,” Chad says, “so Arrow’s not going to be able to solve that problem on its own. But with other people doing similar things to what we’re doing, in seven to ten years our goal is to be able to shift the financial ecosystem enough in places like Central America, Eastern Europe, and Africa, so that Arrow’s services are not needed anymore.”

So far, Arrow’s business paradigm sounds like something out of an avant-garde textbook. Their business model is structured legally as a non-profit. They encourage market investments without financial returns while turning the charitable contribution prototype on its head. Could this

work? The answer lies in a trip to Central America where temperatures are like incubators and entrepreneurs hatch great ideas.

On a recent visit to Nicaragua, Chad Jordan navigated a mangrove bordered estuary while the rising sun silhouetted a distant volcano. His destination? MarExport, a shrimp farm that employs twelve full-time, nine temporary, and thirty-two seasonal workers. After responding to customer demand and changing to a production facility, the company leaders sought $80,000 in financing to enlarge its eight shrimp pools. But local banks required 300% collateral and charged hefty annual fees.

“After visiting MarExport,” says Chad, “their ideas, dreams, and personalities became living, breathing things we could engage alongside. MarExport also has a great relationship with TechnoServe, an international organization that trains entrepreneurs in developing countries.”

Fifteen months ago, Arrow Global Capital issued its pilot loan in Nicaragua to MarExport. Soon thereafter the first follow-up report arrived: New boat purchased. Deeper shrimp gates installed. Increases in employee wages as well as pricing leverage with suppliers and buyers. Continued mangrove stewardship. Three new jobs.

“Those three jobs may not be large in number, but they are mighty in impact. They are forever changing the lives of the people Arrow sought to support.”

“Through this reporting process,” says Chad, “we make sure the capital is on track while ensuring that the community is being supported and transformed through our intervention.”

And there is more good news. Banco de América Central, the lending institution through which Arrow channels its loans in Nicaragua, recently published an Impact Report. “The bank thanked Arrow for helping them understand and trust SMEs,” recalls Chad. “That’s huge in terms of ecosystem development. Talk about an AHA! moment!”

There are also AHA! moments in Oklahoma. “I’ve been meeting with the staff of a biomedical company in Norman,” says Chad. “They’re a growing company with 70 employees.”

“The company leadership wants to support what Arrow does, but it’s more than that. They’re hiring a lot of millenials who want to be a part of something bigger. So we’re interviewing these people, asking them how they want to engage with the world, both locally and globally. At some point down the road, we will build a comprehensive strategy for this company and others we’re talking to that will include Arrow but will not be exclusive to Arrow.”

For the entrepreneur from Skiatook, Oklahoma, the blending of local and international couldn’t be sweeter. “I believe a healthy Oklahoma consists of a citizen population that is both locally-rooted and globally-engaged. This is about doing sustainable, nonprofit work, removing the word charity, and focusing on business engagement.”

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Further Reading

Enjoyed this month's Newsletter? There's more where that came from. Here's what's hot in the community right now:
 

Building technology in Oklahoma, shipping all over the world
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New entrepreneurial hub will make its home in Brady District
by Robert Evatt
 

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Clarke Farmer
Western Regional Manager – Lending Solutions
ProfitStars® - A JACK HENRY COMPANY
Clarke is the business development team lead for the ProfitStars Lending Solutions Group in the Western half of the US.  He has served both financial institutions and business owners since 1996.  Specializing in working capital financing, his group guides financial institution clients in the successful acquisition, funding and ongoing management of a portfolio of commercial borrowers. 
 
He says that the most rewarding part of his current position is facilitating a mutually beneficial relationship between a rapidly growing business and funding source.  His financial institution clients include regional and community banks and commercial finance companies.  Business clients consist of entities in all industries whose revenues are derived from commercial transactions.  They range in size from start-up to $100mm in annual sales.
 
Clarke is a graduate of the University of Oklahoma Price College of Business with a degree in Finance where he was a member of the President’s Leadership Class.  He is Paul Harris Fellow and former member of the Downtown Rotary Club 29.  He is a longtime member and adult Sunday School teacher at Church of the Servant and resides in Oklahoma City with wife of 22 years, Misty and four children; Nick, Dalton, Darci and Nate.
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Chairman's Perspective
by Ryan Butts

As another Summer flies by and quickly draws towards an end it means 3 things in Oklahoma, beautiful fall weather is around the corner, football season, & most importantly beginning another great year of Oklahoma Venture Forum!

This year we kick off our 30th session of OVF with two excellent events. First, our September 13th luncheon where Chad Jordan, Co-Founder & CEO of Arrow Global Capital will talk with us about their journey to create jobs around the globe by providing a boost to proven business leaders thru helping breakdown barriers to capital.  

Next our OVF after hours September 19th, sponsored by Jim Bratton and the OU office of Technology Development, will be hosted at the newly opened University of Oklahoma Graduate School of Business located at the University Research Park in the OKC Innovation district. We Will have 2 presentations from post doc inters in the department highlighting their work on starting new companies based on tech they invented.

As our year begins I challenge our outstanding & diverse group of OVF members to reach out to someone you know should be part of our great organization and invite them to be your guest this month at one of our excellent events. If you haven’t attended OVF before or it’s been a while we would love for you to join us!  Whether you are an entrepreneur, institution, investor, or service provider OVF offers an unmatched community of leaders committed to working together to make sure that entrepreneurs across Oklahoma future is a bright one!

In closing I would like to thank all of those that have made OVF impactful for over 30 years & are working hard to make sure it thrives for another 30. The hours spent volunteering for our board of directors, executive committee, & special events are invaluable. I’d like to offer special thanks to outgoing treasure Bruce Chill and board of Directors Carl Gibson and Steven Price for your many years of service. Their commitment to our organization has been above and beyond! 
I look forward to seeing you all soon!
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