Addressing entrepreneurship finance gap and wealth inequality using Alt-SFT method

The specific problem in the wealth defence industry that I am trying to address with my hack is the worsening worldwide wealth gap linked to economic inequality, plus digital and financial exclusions. This is rooted in the deepening global entrepreneurship finance gap, that are in turn rooted in problem with money, direct capital deployment, and illiquidity problems, as well as the resource constraint issue that face millions of micro/small private companies worldwide. These problems are due to the lack of a specialised trading system with the potential to leverage data, creativity, innovation, strategy, and AI technology to integrate business, markets, investments, and philanthropy in today’s digital economy. This also means a trading system that can nudge and incentivise the wealthy funders to establish special assets’ ownership relationships with the social, sustainable, and transformational entrepreneurs globally who are committed to tackling large-scale economic and environmental problems. The root causes of the worsening worldwide wealth gap are the poor wealth management strategies of the wealth defense industry, which make it impossible for certain specialised trade and investment opportunities to be promoted. For example, my project focuses on the trade and exchange processes that connect the governments and the wealthy private individuals together through public-private partnerships, thus enabling the wealthy to share and trade the risks and rewards of certain assets’ ownership with social, sustainable, and transformational entrepreneurs directly. In particular, the illiquid securities of micro/small private companies are not traded and exchanged in a flexible, frequent, and fractional manner like the securities of large public companies. Simply put, the stakeholders fail to engage in sufficient trade and exchange of this vital asset class – securities (equities) of micro/small private companies.  There are currently no specialist direct ownership trade and investment relationships for these unique, valuable assets to be traded, for instance, between wealthy funders as passive owners/traders and entrepreneurs as active owners/traders. However, the combination of data, creativity, innovation, strategy, and technology can address the pain points of both parties in facilitating inclusive and integrated trade and exchange transactions.

My wealth hack initiative seeks to address a few misconceptions while providing a creative solution that leverages ongoing advances in technology, especially recent developments in AI technology. The first misconception is thinking that we can succeed in forcing the wealth holders (wealthy individuals and companies plus their representatives) to stop defending or protecting their wealth. What we must do is provide some incentives that can nudge these wealthy individuals to voluntarily support the growth of a shared, prosperous global economy by paying their fair share of taxes and sponsoring the acceleration of social, sustainable, and transformational entrepreneurship. The second misconception is to think that it is all about money. Indeed, it is better to think and talk about different trade/exchange processes and less about money (funds). We know that money was invented mainly as a medium of exchange to improve the efficiency of modern trade. However, these days, everyone seems to heavily concentrate on money instead of strategically focusing on how to improve trade and exchange. For instance, how to use available resources to create more wealth by harnessing data, creativity, innovation, and technology through an alternative trading system.

Again, money is the main resource of the wealthy, but to trade more and better, we also need the non-financial resources of the entrepreneurs and other key stakeholders to create shared wealth and build an inclusive and prosperous economy. In view of the above, my hacking wealth project aims to show the wealthy how they can trade indirectly with entrepreneurs by using an alternative securities financing transaction (Alt-SFT) mechanism. This is the modified and simplified version of the traditional or conventional securities financing transaction (SFT), which is a family of transactions where securities serve as collateral

The wealthy can and should use the Alt-SFT framework to trade and exchange the illiquid securities of small private companies with valuable income-producing non-cash assets. The wealthy as strategic sponsors will trade directly with some dedicated social, sustainable, and transformational entrepreneurs who are committed to addressing large-scale social, economic, and environmental challenges of today’s globalised digital economy. I propose that this can be achieved through harnessing AI technology to advance artificial liquidity generation through the Alt-SFT method (as an artificial liquidity generator or creator). The Alt-SFT approach integrates the features of modified and simplified repo (repurchase agreement) trade and barter-style exchange transactions. This approach will ensure that the wealthy do not lose their principal investments and that their wealth is preserved. The Alt-SFT trade involves the purchase and repurchase of illiquid securities with other liquid assets, where securities serve as collateral. Occasionally, the Alt-SFT trade can be transacted with both cash and non-cash assets as non-barter and barter exchanges, respectively. 

To accomplish the above, I am creating structured liquidity finance (SLF) as a novel financial vehicle or tool and cooperative resourcing structure. Secondly, the SLF will be applied to finance the execution of the Alt-SFT mechanism, which we are building as a product that supports funding to move more effectively from some funders to entrepreneurs. Thirdly, I am developing SidoPay.ai as a data-driven and AI-powered fintech for Alt-SFT process automation.

Furthermore, I am creating an online platform www.OneBillionBuyers.com so that stewards as transformational entrepreneurs can search, find, and connect with interested wealthy funders as sponsors or their representatives (trustees) who are willing to engage in Alt-SFT trade. I propose that transformational entrepreneurs, funders (sponsors), and trustees should use the online community (platform) to build special, mutually beneficial, trusted trade and exchange relationships – whereby they connect and communicate, plus negotiate the Alt-SFT contract terms and conditions. The SidoPay.ai, as a data-driven, cloud-based, and AI-enabled global fintech software, will leverage artificial intelligence (AI) to promote artificial liquidity (AL) through the execution of Alt-SFT trade as a specialised trade/investment for illiquid securities of private companies limited by shares. As a pioneer trade tech or fintech, SidoPay.ai will empower funders and entrepreneurs as sponsors and stewards, respectively to harness the power of technology, creative funding, and innovative ownership to prudently play the game of ownership of highly illiquid securities based on Alt-SFT trade. 

I will work with a team of software technologists, developers, and project managers at Innovate Design UK. I will work together with Innovate Design to plan, design and develop SidoPay.ai, which will be used to organise, personalise, customise, standardise, internationalise, digitise, and automate Alt-SFT trade and exchange transactions for the illiquid securities of private companies.  As an artificial liquidity and risk management solution, SidoPay.ai will manage the processes of issuing and transferring ownerships/equities plus liquidity/incomes. The SidoPay.ai will improve efficiency, accuracy, compliance, remove human errors, reduce costs, and minimise risks. The SidoPay.ai is also promoted as a liquidity and ownership management information system (LOMIS) - a software tool that helps sponsored private companies manage their equity ownership with their sponsors to enable entrepreneurs to generate liquidity and facilitate improved financial leverage. It will track the flow of liquidity and ownership of shares during Alt-SFT trade. 

Several things will change as a result of my hack. Firstly, my hack will facilitate the expansion of the global repo market by extending structured and simplified repo trade/exchange processes such as Alt-SFT method to illiquid securities of private companies limited by shares. This will unlock new opportunities for wealthy funders to focus on financing the investment activities – also called secondary business activities or non-operating activities of these companies to ensure that the companies achieve investment readiness and creditworthiness required to attract follow-on debt and equity financing from lenders and investors, as more traditional funders. This makes it easy for these lenders and investors to concentrate on the enterprise activities of the companies, also called primary business activities or operating activities. These approaches will assist the companies in achieving optimally balanced capital structures and accomplishing desired scalable, sustainable, and profitable growth to pay more taxes and create more jobs that address unemployment and low income linked to the wealth gap and economic inequality. In addition, it will help to ensure strategic cooperation and collaboration, firstly between wealthy funders and governments in private-public partnership arrangements and secondly among wealthy funders (sponsors), lenders (like banks), and investors (like business angels and venture capitalists). In response to this hacking wealth challenge and WealthHacker initiative, I intend to double my efforts in developing creative and innovative fintech to subvert or reclaim repo trade as an existing mainstream instrument and mechanism for liquid securities and “hack” it to shift assets’ ownership systems towards the emergent, just, inclusive, and equitable future through repo trade. The shared ownership system in repo trade is a unique, scalable subversion that goes against the grain of the current ownership system to rewire the way capital (funds) and securities (equities) move and flow, especially digitally by leveraging the web, mobile, cloud and AI technologies. Indeed, the proposed Alt-SFT trade will allow the low-risk and cost-efficient flow of funds from the peak of the economic pyramid to the base and flow of illiquid securities of private companies from MSMEs at the base to wealthy funders at the peak of the economic pyramid. The structured and simplified repo trade approach includes financial, digital, accounting, and behavioural aspects. The simplified repo trade hack is strategic, specific, and sustainable, as well as anchored on measurable small innovations in ownership of assets or securities, creativity in funding, intelligence in agreements, and prudence in collaborations. All these have the capacity to turn the massive tanker that is the Wealth Defense Industry towards equity, justice, and fairness. Presently, the repo trade is reserved for only liquid securities and large investments operating at the peak of the economic pyramid but with data, innovation and technology modified and simplified repo trade can be extended to illiquid securities of private companies and small investments at the bottom of the world's economic pyramid so that the wealthy can be nudged and incentivised to use repo trade to build special ownership relationships with global entrepreneurs in a low-risk and cost-efficient manner. This should become one of the largest use cases of digital technologies, especially AI technology.