Minimizing Costs

When we invest our money in a company, we want every dollar to be invested in increasing shareholder value in the business.

Most investors are increasingly concerned about the fees they pay to their management, financial advisors and fund managers.

Our commitment to our shareholders is to operate Fundamental Technologies with the lowest possible overheads and expenses.

We are proud that after expensing everything, our total expenses as a percentage of assets are under 0.5% per year.

No management salaries or management fees

Our management team draws no salaries from Fundamental. We don't charge management fees. Our return for the work we do is a 20% share of the realized gains that exceed 8% per year compounding. We only make money from Fundamental when our investors do.

No sales fees

Similarly, we do not pay sales commissions to our financial partners who assist us in raising capital. Many professionals who provide financial services, especially to high net worth clients, are moving their business models to a simple annual fee for all of their services. This is often called a 'wrap' fee. They believe this model is most fair to their high net worth clients. These professionals want to be measured on the returns, advice and information they provide to their clients.

Fundamental is a perfect fit for this model and an ideal component of an overall portfolio strategy for these professionals and their clients.

Minimizing Legal and Accounting Fees

Another way we keep our costs low is to be very careful about legal and accounting fees. We keep legal fees low by using simple common-sense agreements with our investee companies. Basil Peters has championed a return to simpler, common sense angel investment agreements and makes these agreements available free to anyone on his blog at www.angelblog.net.

Accounting and audit fees have skyrocketed as a result of the court cases around Enron and similar cases over the past several years. Every year we will ask our shareholders if they agree to waive the costs of a full formal audit because we don't think it's necessary in a very simple organization like Fundamental Technologies.

Electronic Information

Another way we will be frugal with our investors' capital is to have all of our information and communications in electronic form only. BC has recently passed modern electronic information legislation. Companies can now be fully compliant and operate with only electronic information. We will provide our investors more than the usual amount of information, but it will be done by e-mail and through the web, saving our shareholders the costs of mailing hard copies and filing paper records.

© Fundamental Technologies II - 2007