Let’s talk next about our financial structure and business model. Orthogonal Thinker is set up as a Holding Company, or “Hold Co.” for short. There are a number of key benefits to you as a potential investor with this kind of financial structure.
Why a holding company? Let’s take a look at how this type of financial structure works. A holding company is a type of firm which owns controlling interest in other companies, including wholly-owned subsidiaries, instead of engaging in operating activity itself.
Perhaps the best known Hold Co. is Berkshire Hathaway, which is Warren Buffet’s holding company. Buffet is renowned for building enormous shareholder value over time as shown in these two charts. The first chart shows how the share price has appreciated since 1980.
As you can see, the price of a single share of Berkshire Hathaway has seen astronomical growth. At the end of 2018, it was nearly $300,000 per share. Relative to the S&P index, Berkshire’s growth has been equally mind-blowing. This next show shows how the stock has risen 1,000,000% between December 1964 and December 2015.
Bottom line... the holding company model is built for the long term. It is used by some of the most successful companies in the world, not just Berkshire Hathaway. Other examples of well-known holding companies include Alphabet, Amazon, Walton Enterprises and Alibaba.
The key distinction for Orthogonal Thinker is this... we are a Socially Conscious Holding Company. As I shared at the beginning... it’s about The New Standard of Farma. It’s about whole foods, plants medicines and other products which nourish the body, mind and soul.
How Does Orthogonal Thinker Make Money?
To begin, we invest in and partner with companies for up to 50% equity stake in their business, in return for capital and our services.
We do this in order to achieve consolidated cash flow and yearly returns. For example, if one of our 50% equity stake partners earns $1M in annual net profits, Orthogonal Thinker would receive $500,000. With this in mind, we look for companies where we can acquire the following three things:
1: Tangible Assets & Intellectual Property
2: Operating Income
3: Equity Ownership
The first path to profit is liquidity through exits and the second path to profit is through paying dividends.
Our consolidated cash flow model provides for yearly returns that come into Orthogonal Thinker. This cash flow can either be reinvested or we can opt to pay a dividend.