Brian Ross: The mind behind Infrashares
Q: Your idea of creating means for citizens to make retail investments in infrastructure seems tremendous. How did you come up with this idea?
Infrashares was formed after I collaborated on a research paper for the Transportation Research Board (TRB) exploring the potential application of investment crowdfunding in the financing of Public-Private Partnerships (P3s).
The paper was based on my experience as a private equity developer/investor in P3s where I saw that while private investment in public infrastructure is critical to meeting global infrastructure needs, small to medium sized projects and infrastructure technology companies often suffer from a lack of cost competitive early-stage capital. Also, direct investment in infrastructure assets has historically been limited to large institutional investors which drives up capital costs, limits the local ownership and the economic impact of infrastructure investment.
Q: Tell us a bit about how it would work?
InfraShares takes the successful model of crowdfunding investment for technology start-ups and commercial real estate projects and applies it to the infrastructure industry. Similar to the model employed by other investment crowdfunding platforms (Startengine.com, Crowdstreet.com, etc.), InfraShares partners with offers to determine the size, type, and terms of the crowdfunding campaign.
Then the campaign is launched on the InfraShares website where potential investors can see project details, investment terms and comparable investments. InfraShares leverages technology and industry expertise to provide a platform for project sponsors to market their projects to a broad base of investors who were previously restricted from participating in these deals. The low transaction costs and socially motivated investors combine to provide cost competitive capital, while providing transparency, public engagement, and greater economic impact.
Q: From my point of view I could see this as transformative for infrastructure project investment around the world. You must be encountering a lot of resistance - where are you encountering the greatest resistance?
The feedback I commonly get is "great idea, I can really see how this would transform the industry; let me know when someone else does it first".
Infrastructure is a conservative industry and no one wants to be a pioneer or take risks. This mindset is beneficial to the entrenched entities who profit from monopolistic markets, inefficiency and lack of transparency, but it holds the industry back in its ability to deliver infrastructure in innovative ways that would benefit society.
Q:Which kinds of projects would you think are most likely to attract retail investors? What kind of volume would you see over a 10 year period?
Retail investors, like institutional investors want a return commensurate with the riskiness of the investment, but retail investors also have social motivations relating to community, environment or social equity. Projects that provide healthy financial returns along with strong social returns will do the best in attracting retail investors.
Over the course of the next ten years, given the global need for infrastructure investment and retail demand for infrastructure as an asset class, we anticipate we facilitating $350 billion in infrastructure financing around the world.
Q: What book (or person) has had the most powerful impact on your thinking, and your career?
The most powerful impact on my thinking and career was from my experience as an Army Engineering Officer in Afghanistan building (and re-building) roads and bridges in remote areas of the country. I saw first-hand the fundamental role that infrastructure plays in promoting safety, stability, and economic prosperity. That experience is constantly in the back of my mind and guides the desire to help advance infrastructure development around the world.
Brian has over 16 years of experience in the development of major infrastructure projects. In his career he has worked for construction and engineering firms, private infrastructure developers, public agencies and financial advisors. As founder and CEO of InfraShares, Brian's aim is to help bridge the global infrastructure investment gap by applying investment crowdfunding to the development of infrastructure around the world. Brian has a Master’s in Civil Engineering from Stanford University and an MBA from the UC Berkeley Haas School of Business.