A presentation delivered by Aginsky Consulting Group (ACG) at "Citizenship by Investment and International Residence" Conference in London on October 30th-31st, 2013. ACG was a silver sponsor of the event. In this presentation ACG discusses the EB-5 Program, a government sponsored program which allows foreign investors to gain access to U.S. residency in exchange for an investment of $0.5M-$1M, focusing on the direct investment route.

1. EB-5 Direct Investments:
The Road Less Traveled
Citizenship by Investment & International Residence
London, UK - October 30th – 31st, 2013

2. Presentation Outline
 Global
immigration trends
 Why the U.S.?
 EB-5 today
 ACG & EB-5
 Implications for immigration professionals
October 30th-31st, 2013
www.aginskyconsulting.com
2

3. October 30th-31st, 2013
www.aginskyconsulting.com
3

4. Global Immigration Trends
4.5%
25.4%
25.6%
49.7%
26.9%
3.6%
Source: United Nations Department of Economic and Social Affairs, Population Division, “Trends in International Migrant
Stock: Migrants by Destination and Origin”
April 6th, 2013
www.aginskyconsulting.com
4

5. October 30th-31st, 2013
www.aginskyconsulting.com
5

6. Why the U.S.?
 Safe-haven
for long-term investments
 Current economic environment: “buyers
market”
 Stability
 Free enterprise protection
 Top education and healthcare services
April 6th, 2013
www.aginskyconsulting.com
6

7. October 30th-31st, 2013
www.aginskyconsulting.com
7

8. EB-5 Today – Visas Issued
8000
7,641
954
109
447
Number of visas issued
6000
Other
Venezuela
4000
2000
3,463
1,885
589
135
295
562
117
254
South Korea
6,131
China
Total
2,530
866
0
2010
October 30th-31st, 2013
2011
www.aginskyconsulting.com
2012
8

9. EB-5 Today - Regional Centers
 Influx
of players due to low barriers to entry:
 17x
increase in the number of Regional Centers over
the past 5 years
 325 registered Regional Centers today
 Fraud
and SEC compliance issues:
 There
is a growing sense of distrust towards Regional Centers, in
light of the recent IRCTC scandal
 Increased
USCIS scrutiny:
 I-924
acceptance dropped from
68% to 36% in 2012
 The tenant occupancy issue
October 30th-31st, 2013
www.aginskyconsulting.com
9

10. October 30th-31st, 2013
www.aginskyconsulting.com
10

11. Investor Options (Alternatives to RCs)
 Competing
immigrant-investor programs
overseas
 Other Visa Categories (L-1, E-2)
 EB-5 Direct Investment
October 30th-31st, 2013
www.aginskyconsulting.com
11

12. Alternatives - Direct Investment
October 30th-31st, 2013
www.aginskyconsulting.com
12

13. October 30th-31st, 2013
www.aginskyconsulting.com
13

14. ACG EB-5 Service Offering: A One-Stop Shop
Exit Strategy
and Execution
New Entity
Formation
Immigration
Legal Support
(if necessary)
Matter of
Ho Business
Plan
Post Acquisition
Business
Management
October 30th-31st, 2013
Investment
Opportunity
Identification
Due
Diligence
ACG
Escrow/Closing
www.aginskyconsulting.com
Negotiations
and Deal
Structuring
Corporate
Legal Support
14

15. October 30th-31st, 2013
www.aginskyconsulting.com
15

16. Phase I: Information Gathering & Client
Interviews
Client:
Mr. Smith
ACG Collected information
 Financial
information verification
 Mr. Smith’s Investment Criteria
Investment objectives: Green
card, safe investment, returns
Investment size: ~$1,500,000
October 30th-31st, 2013
www.aginskyconsulting.com
16

17. Phase I: Information Gathering & Client
Interviews
Mr.
Smith’s Investment Criteria (continued)
Risk
profile: Conservative
Timeline
Green card as soon as possible
Exit within 3-4 years of investment
Any other specific criteria: Majority control of the
investment
Phase I Timeline: 1-2 weeks
October 30th-31st, 2013
www.aginskyconsulting.com
17

18. Phase II: New Entity Formation
 “NewCo
LLC”
 Mr.
Smith owns 100% membership stake in
NewCo LLC
 Mr. Smith hires ACG as a Manager
for NewCo LLC
Phase II Timeline: 1 week
October 30th-31st, 2013
www.aginskyconsulting.com
18

19. Phase III and IV
 Phase
III: Market monitoring & long list
 ACG
provides Mr. Smith with a customized list of
available deals
 Deliverables: ACG Dealbook
 Phase
IV: Short list
 ACG
works with Mr. Smith to narrow down to 1 or
2 deals that will work best for him
Phase III & IV Timeline: 3-4 weeks
October 30th-31st, 2013
www.aginskyconsulting.com
19

20. Selected Deal: Commercial Janitorial
Service Company
•
•
•
•
Total investment size: $1,500,000
Expected number of new jobs: 24
Projected ROI: 26.5%
Expected Exit: 3-4 years
October 30th-31st, 2013
www.aginskyconsulting.com
20

21. Company Overview
 Founded
in 1995
 Services include janitorial services, floor
care, supply sales, related services to
commercial customers
 Markets: Oregon, Washington, and Arizona
 Clients include the likes of AT&T, Parr
Lumber, Union Pacific Railroad, Leading Regional
Property Management Firms
 Award-winning company
October 30th-31st, 2013
www.aginskyconsulting.com
21

22. Financial Summary
2010
Revenue
2011
2012
2013*
$1,906,939.00
$1,636,755.00
$1,707,474.00
$1,939,514.00
$387,767.00
$365,385.00
$377,684.00
$398,362.00
Net Cash Margin
20.3%
22.3%
22.1%
20.5%
ROI
25.9%
24.4%
25.2%
26.6%
Cash Flow
*2013 forecasts are based on existing customer contracts
October 30th-31st, 2013
www.aginskyconsulting.com
22

23. Pre-acquisition Org Chart
Owner
Total Employees: 12
Business
Manager (1)
Operations
Manager (1)
Office
Manager (1)
Janitorial Staff (9)
October 30th-31st, 2013
www.aginskyconsulting.com
23

24. Phase V: Due Diligence
ACG verifies all the claims made by the company
 Financial, legal, personnel, and business due
diligence
 Deliverable: Due-diligence Report

Phase V Timeline: 4-6 weeks
October 30th-31st, 2013
www.aginskyconsulting.com
24

25. Phase VI: Negotiations and Closing

ACG negotiates and structures the deal for NewCo LLC

Reducing price by 23%
ACG works with the corporate lawyers to draft and
finalize all the contracts for the transaction
 Immigration attorney contract
review
 Escrow/Closing

Phase VI Timeline: 2-4 weeks
October 30th-31st, 2013
www.aginskyconsulting.com
25

26. Phase VII: Ongoing Management
Day-to-day operations
 Key strategic decisions

Geographic expansion
 New service/product launch
 Strategic business development


Human resources management
Job creation
 Strategic hiring

Regulatory/tax compliance
 Quarterly reports to investor
 Budgeting/forecasting

October 30th-31st, 2013
www.aginskyconsulting.com
26

27. Post Closing: EB-5 Application
 ACG’s
responsibilities:
 Draft
a “Matter of Ho” compliant business plan for
NewCo LLC
 Work with the client’s immigration attorney or
recommend an immigration attorney if the client
does not have one
 Assist with I-526 application
EB-5 Application Timeline: 4-6 weeks
October 30th-31st, 2013
www.aginskyconsulting.com
27

28. New Job Creation (post acquisition)

Business plan outlined growth strategy and job
creation time table
All senior hires were made first
 Salesmen (4 new hires)
 Contractor conversion
(8 conversions)
 New janitorial staff for new
accounts acquired (11 new hires)


Initial hires were funded by
working capital reserves and
existing cash flow
October 30th-31st, 2013
www.aginskyconsulting.com
28

29. Organizational Transformation
Pre - Acquisition
Owner
Business
Manager (1)
Operations
Manager (1)
Post - Acquisition
Pre-acquisition # of
employees: 12
 Post-acquisition # of
employees: 36
 New jobs created: 24

October 30th-31st, 2013
ACG
Oversight
Senior
Management (4)
Office
Secretary (1)
Janitorial Staff (9)
EB-5
Investor(s)
Sales Force
(4)
www.aginskyconsulting.com
Janitorial Staff
(28)
29

30. Phase VIII: Exit Strategy and Execution

Apply for I-829 (condition removal)

ACG will work with Mr. Smith and the immigration attorney
to file the application
Mr. Smith decides to sell NewCo LLC after receiving
approval of the I-829
 Exit strategy execution (Phase VIII)

ACG will prepare the offering documents to place
NewCo LLC in the market
 ACG will work with interested buyers through the
entire selling process

Exit Timeline: 5-9 months
October 30th-31st, 2013
www.aginskyconsulting.com
30

31. Summarized Process and Timeline
Phase I. Information gathering and client interviews
Phase II. New entity formation
Phase III. Market monitoring and long list
Phase IV. Selection process – short list
Phase V. Due diligence
Phase VI. Negotiations and contract signing
PROJECT TIMELINE OF PHASES I-VI: 11-17 weeks
Phase VII. Post-acquisition management (Ongoing)
Phase VIII. Exit Strategy and Execution
EXIT TIMELINE: 5-9 months after approval of I-829
October 30th-31st, 2013
www.aginskyconsulting.com
31

32. Comparative Analysis: RC vs. DI
Metrics
Direct Investment
Regional Center
Business Control
100% control
No control
Number of Options
Virtually unlimited
Very limited
Involvement Level
Passive/Active/Hybrid
(options)
Passive only
(no options)
Transparency
Full
Limited
Brokerage/ Admin fee
4% to 6%
5% to 10%
Liquidity
Liquid
Illiquid
Business Expansion
Optional
Not an option
Returns
12% to 30%
0% to 1.5%
Risk
Low
High
October 30th-31st, 2013
www.aginskyconsulting.com
32

33. Advantages of Direct Investment –
Lower Risk
 Reduced risk – why?
 Business track-record
 Existing cash-flow
 Direct job creation, easy to
demonstrate
 Ability to bridge any job creation
deficit with existing cash-flow
 Perfect alignment of stakeholders’
interests
 No leverage required
October 30th-31st, 2013
www.aginskyconsulting.com
33

34. Direct Investment
October 30th-31st, 2013
www.aginskyconsulting.com
34

35. October 30th-31st, 2013
www.aginskyconsulting.com
35

36. Direct Investments – A New Tool for
Immigration Professionals
 To
capture new clientele and capitalize on this
emerging opportunity:
Know of EB-5 investments taking place outside Regional Centers
 Understand the process and structure of these transactions
 Expand your network of partners and affiliates to include
professionals experienced in structuring EB-5 direct investments

October 30th-31st, 2013
www.aginskyconsulting.com
36

37. Closing remarks

The EB-5 landscape is quickly changing:
Emergence of a more a robust and dynamic alternative to
Regional Centers
 As service providers, we must adapt and be at the forefront
of the industry to better assist clients


The underutilized direct-investment route will be key
to maintaining the EB-5 program’s momentum!
October 30th-31st, 2013
www.aginskyconsulting.com
37

38. October 30th-31st, 2013
www.aginskyconsulting.com
38

39. October 30th-31st, 2013
www.aginskyconsulting.com
39

40. Contacts
U.S. HEADQUARTERS
Office: +1-503-546-4049
Fax: +1-503-549-8990
info@aginskyconsulting.com
411 NW Park Ave., Suite 402
Portland, OR 97209, USA
INDIA OFFICE
Office: +91 11 41207155
acg-india@aginskyconsulting.com
21, Nehru Place Greens,
Suite 602
New Delhi, 110019, India
www.aginskyconsulting.com
October 30th-31st, 2013
www.aginskyconsulting.com
40