Investment Bank Agency
The seventh agency in the community is the Investment Bank Agency. The agency is primarily dedicated to supporting startup businesses, as well as funding with established businesses as they seek new ventures.
The Investment Bank Agency, together with the Commercial Bank and Capital Fund Agencies, forms the Economic Department. The three agencies are collectively in charge of the community’s economic system, in which participants invest all or part of their net worth into the community. The system then uses the pool to invest and guarantee participants a far better return than would be the case if they had invested outside the community.
The Investment Bank Agency uses an automated system that is able to offer general and customized assistance to participants. The system encourages startups to apply for financial investment from the agency through this system. The system vets the applications through an automated system, deciding the extent to which the agency can invest. In some cases, the participant may not be able to navigate the system, or their circumstances may be beyond the capabilities of the system. In such instances, the participants approach the village presidents for help. Besides helping the participants, the village presidents collect data on what needs to be improved about the system and forward this information to the agency president, who adjusts the system to reflect participants’ needs.
To achieve its mandate, the Investment Bank Agency performs a number of roles, either independently, or in coordination with other agencies.
One of the main reasons why startups fail is lack of capital and the absence of opportunities to raise it to fund their operations. The Investment Bank Agency’s core responsibilities revolve around helping startups and existing businesses establish and grow themselves. Its main responsibilities are:
- Enhance participants’ access to capital
- Fund startups
Enhance access to capital
Through the Investment Bank’s system, participants are able to apply for and receive guidance on how they can access funds to fund their ventures, especially as they try to establish their businesses in the community. These businesses’ main worry is the lack of finances to initiate production, as well as the lack of prerequisite qualities that would be required by a contemporary bank. The agency’s system, however, has extensive information about the community economic system and the individual participants, which it uses to overcome issues such as lack of collateral. Through the agency, businesses are able to access funds set aside as savings or surplus funds, further optimizing the operation of the economic system.
The Investment Bank Agency helps startups as they take off, providing much-needed funds, without which such businesses are likely to fail in the medium term. The agency offers financial resources as part of a joint venture. The agency’s system vets the startup’s application for funding and makes a decision on the level of support and the stake that it will control in the business. Where this automated decision does not satisfy the participant, they can approach the village president for advice.  By virtue of its stake, the agency has a say in major financial and operational decisions, though it does not have influence over the daily running of the enterprise. Through the automated system, the participant whose business has been funded by the agency must submit such decisions, which are reviewed by the system, and approved, or referred back. Where necessary, the participant can liaise with the village presidents for discussion and clarification. From its investment in the startups through the Investment Bank Agency, the community has a share of the profits in promising businesses. The investment in startups can be structured as either debt or equity. Under equity, the community, through the agency, has a stake in the business indefinitely, while under debt, it relinquishes its stake once its loan has been repaid. A number of factors will determine which mode of financing is most appropriate, including the strength of a participant’s managerial skills, the viability of the business, and how exposed the agency is to financial risk through other investments.
The Investment Bank Agency coordinates with agencies within the Economic Department, in the Business Support Vertical, and others beyond these two groupings as it aims to support businesses and enhance the return on invested funds.
The Investment Bank provides the Capital Fund and Commercial Bank Agencies with an additional avenue for investment. From the Capital Fund, the Investment Bank Agency receives capital that it then invests in startups and other businesses. From the Commercial Bank, it receives information on past credit appraisals for existing participants, who may wish to access funds to expand their businesses. The Investment bank Agency utilizes this information to decide whether the participant qualifies for a loan or not.
Within the Business Support Vertical, the Investment Bank Agency coordinates with the Stewardships and Business Planning Agencies to help participants draw up credible business plans. The Investment Bank’s system advises the participants on how they can draw up the business plan to have higher chances of being financed. The Investment Bank Agency also liaises with the Accounting Agency to equip the system to train startups on prudent financial management. The Investment Bank Agency liaises with the Stewardships Agency as the Investment Bank monitors new and established businesses to ensure that they operate within industry best practice and therefore safeguard invested resources. This is performed through the Investment Bank Agency’s automated system, with its results being shared with the Stewardships Agency.
The Investment Bank Agency coordinates with the IP Agency to identify and support participants wishing to develop intellectual property. The Investment Bank Agency highlights the importance of innovations being aligned with market needs so that they can be commercialized with ease. The Investment Bank Agency also appreciates the nature of IP development as a resource-intensive process, meaning that many participants may shy away from it, as they do not have the necessary funds or the financial incentive to pursue innovations.
The Investment Bank Agency supports participants who wish to engage in nutrition, including food production, processing, restaurants, and other subsectors, coordinating this effort with the Nutrition and the Land, Utilities, and Easements Management Agencies. The Investment Bank Agency provides the funds needed to develop land and other facilities required for production so that quality food production is prioritized.
The Investment Bank Agency also liaises with other agencies that are neither in the Business Support Vertical nor the Economic Department. The agency coordinates with the Human Relations and Life Planning Agencies in maintaining the system to train participants to manage their businesses effectively. The Investment Bank coordinates with the Marketing Agency to provide marketing help to startups, as part of the Investment Bank Agency’s help for new ideas and businesses. The investment Bank Agency liaises with the Auditing Agency to strengthen internal financial controls for startups and verify financial statements before financing, beyond what is offered by blockchain technology.
The Community Economic Department’s primary aim is to promote participants’ economic interests and collectively act as a capitalist entity, rather than the individual participants acting as independent capitalists. Through the Investment Bank Agency, participants invest pooled resources in their own ventures within the community’s economic system. The agency gives community businesses an added advantage over normal businesses in a free economy by offering easier access to finance, targeted financial advice, and other benefits enabled by the community’s unique economic synergies.
 The impact of community-based banking can be seen in the case of the Grameen Bank, which won wide acclaim for bringing millions out of poverty in Bangladesh, in a model that was replicated elsewhere around the world with significant success. One of the model’s weaknesses was its low focus on growth-related lending. Research suggests that by reducing material and behavioral risks of lending, while diversifying its loan portfolio, the model could have even greater success. This is expected to be the case in the community, with no personal loans being extended, and all lending being aimed at supporting startups and new ventures by existing businesses (Khandker, S. “Grameen Bank: Impact, Costs, and Program Sustainability.” Asian Development Review 14.1 (1996): 65-85).
 Venture capitalists’ appetite for startups is dwindling fast, as they look for lower risk investments. This trend has affected startups, which have virtually nowhere else to turn to as they seek to support their business ideas. The Investment Bank Agency would go a long way in reversing the trend within the community (Basta, V. There’s an implosion of early-stage VC funding, and no one’s talking about it. 2018. electronic. 19 05 2019.).
 Major credit rating companies, such as Moody’s, appreciate the task they face in manually appraising credit, a difficult and risky business for any type of loan, whether retail or multi-billion. Inability to properly conduct credit appraisals affects lender margins for small loans, potentially risking a lender’s financial future. The use of automated analytics solutions has however helped evade this risk, evading to more evidence-based and accurate decisions (Moody’s. Credit Assessment. 2019. 30 06 2019).
 Lack of enough funds is cited as among the most prominent reasons why businesses fail. Startups start with insufficient resources and take time before they start making money. Without any support, and their inability to immediately start making money, they cannot survive (Kalyanasundaram, G. “Why Do Startups Fail? A Case Study Based Empirical Analysis in Bangalore.” Asian Journal of Innovation and Policy 7.1 (2018): 79-102. electronic.)
 Innovation and commercialization of the resulting innovation require extensive resources, often without any revenue inflows for the first few months/years. This finance gap is likened to a “valley of death” in which startups are unlikely to survive without external financing, in this case from the Investment Bank Agency, working as a venture capitalist (Savaneviciene, A., V. Venckuviene and L. Girdauskiene. “Venture Capital a Catalyst for Start-Ups to Overcome the “Valley of Death”: Lithuanian Case.” Procedia Economics and Finance 26 (2015): 1052-1059. electronic.)
 Venture capital is only minimally involved in the initial stage of a business, which includes R&D. The next stage, which involves commercialization of a startup’s creation or innovation, is key to survival, and where the Investment Bank will play a major role. The agency’s presence is short-lived – it will exit once the startup is now stable, and is looking for more conventional sources of finance for expansion – in this case, the Commercial Bank Agency (Zider, B. “How Venture Capital Works.” Harvard Business Review (1998): online publication. electronic.).
 Business plans are unlikely to survive in their original form once they have encountered the market. It is necessary to have a flexible business plan, which is able to take in unforeseen market dynamics. The investment Bank Agency works with the Business Planning Agency to ensure that the business plan being funded is able to adapt to evolving or unforeseen market demands (Krommenhoek, B. Why 90% of Startups Fail, and What to Do About It. 10 04 2018. electronic. 19 05 2019.)