Rare Birds Podcast 190 - Guyana Startup Nation Part 1 of 3
[Bonus Series] Guyana Startup Nation. A Three Part Series with Entrepreneur, Guyana Focused Frontier Merchant Banker and Asset Manager Steven Jasmin. Part 1 The Origin Story
EPISODE HIGHLIGHTS
*Find a written transcription of the interview below
Part I Origin Story
- Get to Know Steven
- Building Flashpoint Group
- Working with Louisiana Oil Multi-generational Family Businesses’
- Understanding the Oil Industry
- Transitioning from Louisiana to Guyana
- Launching Smart City Clearing Company (SC3)
- The Role of Merchant Bankers
- The Vision for SC3
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Host: Jo-Ann A. Hamilton
- LinkedIn: https://www.linkedin.com/in/jo-annalexandra/
- Twitter: https://twitter.com/JAlexandrHamil
Guest: Steven Jasmin
- LinkedIn: https://www.linkedin.com/in/smjasmin/
- Twitter: https://twitter.com/smjasmin
- Medium: https://theguyanabanker.medium.com/
Resources Mentioned:
- N/A
Credits:
- Produced and Hosted by-Jo-Ann A. Hamilton
- Music by Notes to the Soul
Full Interview Transcript:
Rare Bird Podcast Part I Origin Story
Jo-Ann Hamilton
Greetings everyone and welcome to this special bonus series of the rare birds emerging markets podcast with me, your host Jo-Ann A. Hamilton. This special bonus series is an exploration into the frontier market country of Guyana. It is an exploration driven by curiosity so that together we can learn more about the varying emerging and frontier markets across the globe, as well as the individuals on the ground driving the action. So why Guyana if you type guiding Google, you may be surprised by what you on Earth more than likely a series of articles about or related to the country's discovery of oil in 2015. This has subsequently led to an influx of new investments in different sectors across the country. In this three part series, you will hear me in conversation with entrepreneur and Guyana focus merchant banker and asset manager, Steven Jasmine, this series is titled Guyana startup nation. It consists of three parts part one, the origin story, part two, the Guyana story, and lastly, part three startup nation. Crucially important, this series, like all the rumored series are for informational purposes only. Nothing new here in this series is investment advice of any kind. As always, I'm excited to share this content with you so let's get to it. Bye for now.
Welcome to part one, the origin story. In this episode, you will get to know Steven. We then discuss what it was like building and scaling his first start up the Flashpoint Group. You will next hear Steven discuss his experiences working with Louisiana's multi-generational oil of family businesses. Steven provides an overview of the oil industry and explains the difference between merchant and investment bankers. You will also hear the fascinating story of how he landed in Guyana. Finally, you get to learn about his most recent company SC3, the smart city Clearing Company and the vision he has for it. Listening. Briefing Steven and welcome to the rivers emerging markets podcast.
Steven Jasmin
Excellent. Thank you, Jo-Ann.
Jo-Ann Hamilton
It's great to have you here. Steven.
Steven Jasmin
It's great to be here. Thank you so much for the opportunity.
Jo-Ann Hamilton
Yeah, absolutely. So Steven, let's jump right in. Tell us who are you your background where do you come from?
Steven Jasmin
Yeah, so I am a US citizen working in helping to develop Guyana, South America and so I'm originally from Atlanta, Georgia. That's where my family is based. And over the past four years, I've been living in working almost full time down in Georgetown, Guyana and South America.
Jo-Ann Hamilton
Okay, so how did you end up getting to Guyana? What's the background story there?
Steven Jasmin
Yeah the short version is that I was working as a chief restructuring officer in Louisiana, and the United States and we had a family office management consulting practice. And so I was helping multi-generational oilfield service companies, family owned oilfield service companies, you know, run their businesses more efficiently under a being capital being consulting model. And while I was doing that, I would usually spend one week a month in Louisiana and I spent three weeks a month working out in Silicon Valley. And the tech world involved with some of our technology portfolio companies, where we were focused on you know, smart cities, Internet of Things and autonomous vehicles. And so in that process, I ended up learning and finding out about Guyana while I was acting as a chief restructuring officer for some of those families in the oil and gas downturn in 2015. And as a part of that work, I ended up coming becoming a liquidator, having to liquidate some of the assets of the families on behalf of the bank, the commercial banks and investors that were involved with those companies. And in doing so, I literally Island hopped my way through the Caribbean, stopping at St. Kitts and Nevis long away. One of the families in St. Kitts and then I landed in Guyana in June of 2017. And absolutely fell in love with the country felt like it was a very similar working environment to the bayou in southern Louisiana. Which if some of your, I know most of your listeners are tech oriented, but Louisiana is the center of the offshore oil and gas industry for the United States of America. And so all the service companies that support and develop and run America's offshore oil and gas industry worked out of a port called flu shot in Louisiana and so perfect shot and so with that I got to Guyana in June 2017. That the time they had found 2 billion barrels of oil, kept in my relationships and contacts into Houston as a result of all the work I was doing in the offshore oil and gas industry, I was able to kind of understand and learn the magnitude of what was coming for Guyana. And with my experience also working globally as a banker and an oil and gas expert along with a technology expert. I thought you know, no better time like the present. Gyan is the future. I've always, you know, in my work as an analyst and banker and consultant, you know, it's my job to kind of see what's coming over the horizon. And that's where a lot of business opportunities lie. And so in that no tracking of the data and understanding the environment I believe that Guyana was going to become a very critical country for South America and the Caribbean. And not only play a role regionally as a leader, but because of the size of the resource that we were hearing about and what I was kind of finding behind the scenes, who showed my connections, realize that this is a once in a lifetime opportunity to be able to set up my merchant bank in Guyana and landed there establish operations, watch the country's first western style commercial real estate firm and really started to work towards building what now after four years has been. A very successful practice and it's only really just now starting to catch and grow. As you know, startups takes time to get companies kind of off their feet and find the right product market fit and, and wait for the market to kind of get where it needs to be. But now we've positioned ourselves and we're really looking forward to what's going to come as a result of a world class we'll find with some very unique characteristics and some great opportunities. And so, that's where we are and that's kind of how it started. Looking forward to digging in deeper with you.
Jo-Ann Hamilton
Yeah, you went to business school, right. You went to Emory Goizueta business school, and from there did you go straight into the industry that you're working in now or did you were you doing some other things before I'm trying to kind of plug the missing pieces?
Steven Jasmin
No, thank you. Great question. So I was very fortunate. When I was at Emory, I met some amazing adjunct lecturers, and you know, they were all bankers and worked in you know, work on Wall Street and did different things. And you know, one of them is actually a very prominent Jamaican individual who left Jamaica came to America. And he was one of my professors as a Harvard Business School alumni and, and in that, you know, one of the things he taught me along the way was, you could go work at Goldman Sachs and, you know, get the golden handcuffs and become work your way up the banking regs because as you know, banking is a very apprenticeship based industry. You start young and you kind of track your way up to the top. I like to joke you wait for other people to die or quit.
Jo-Ann Hamilton
It's very traditional industry.
Steven Jasmin
Yes. Very, very traditional. No, or, like himself coming out of the Caribbean. He had started out, raised his own funds took a more entrepreneurial approach to banking. And so I was fortunate because of all the hard work I had done. I had a really deep background in technology. Love startups, living an entrepreneur and decided, you know, you could do the traditional route of going with the golden handcuffs or you could do it yourself. And what I ended up doing was when I graduated from Emory, I graduated in three years. I was very fortunate. I worked hard. I was running a company so when I graduated; I sold one of my companies and ended up partnering with my partner who I'm still in business with today. And together we launched at the time, a fortune 500 management consulting and marketing consulting agency, called Flashpoint group. And so with that, you know, Flashpoint, we raised three and a half million dollars in debt and equity. We built the business we were, you know, consultants of record with companies like Delta Airlines, Coca Cola, Johnson and Johnson. And so I was 21 years old at the time, and I was fortunate enough to be helping, you know, the CEOs in the boardrooms and the C suites of these fortune 10 fortune 50 companies and helping them navigate through change and work through change. And that really, you know, helped give us the platform and the experience. Both on the banking side, because I worked together with my partner and we raised the debt and equity to do it successfully and build the practice. And then getting access to those boardrooms and, and those CEOs and helping them run their organizations as a big three, the Big Four consulting similar to McKinsey or Bain or PwC, or EY kind of advisory services and advisory practice. And so in doing that we had a lot of exciting case files, and we had a lot of exciting mandates and it was just, it was quite a surreal experience when you're going through you don't really appreciate it, but now looking back on it I can say that, yeah, it really set the stage for you know, the future of my career and where I went from there. And so I was very blessed and fortunate and excited to have such a strong start and, and grow rapidly and use that as a platform to launch what has been an extremely interesting and exciting career. And fortunately I can say that I've never worked as an employee for anyone you know, since I graduated university 15 years ago now 16 years ago, and it's been quite the adventure. And so if you would have told me back then that one day, I'd be helping advisors in position and country and are involved on a global scale, I would have laughed at you. But the universe has a sense of humor and life takes you where it's going to take you and you just got to keep showing up and see where the opportunities go and follow them as an entrepreneur.
Jo-Ann Hamilton
But I think obviously use even you got the mindset because I think so like you speak about being blessed. So many was blocker blessings, I think you're very good at seeing opportunities and grabbing them like, you just kind of went with everything, but I think it's also coincidental that the first person you met that influenced he was to meet somebody from the Caribbean. And here you are working now with Diana so it's kind of come full circle to right.
Steven Jasmin
Oh, it's amazing, you know, just little things in life and the signs I'm a big believer in signs and as you're going along your journey and you know, following just and watching things fall into place. And a lot of times over the years, you know, you learn things and you get wiser with age and one of the things I've learned is that you can't put round pegs in square holes and you got to kind of follow, follow the river currents and so there's an opportunity to help adjust the river or move the river but you've got to you can't just completely go against the river because when you try to do that, things usually don't work out and you make things a lot harder on you. So one of my main principles in life is to just be patient and kind of see where things go, let them evolve. You know, life's a marathon and I know it's a cliché, but it's about the journey and you got to appreciate and embrace the journey because otherwise you know, if you're looking for fast money and immediate success, I know a lot especially in the banking world I know a lot of people that do that and they do very successful but it's just not how I'm wired and it's not my temperament. You know, and, and personally, I think that those people kind of constantly are, you know, running almost on a mouse wheel, where you just could have once you kind of choose that path of wealth creation, you're just, you're constantly having to work and you're making money, you're losing money at a very quick pace, instead of a more slow and stable generational investment mindset and long term wealth creation strategy, and that's, that's really what resonates more with me and how I'm gotten to where I am today is more continuing to show up and just set a strategic plan and vision and just wake up every day executing against it and adapting it as the market environment changes and as things happen in the field, but still always following your North star and where you're going, and that's a large part of how I've got to unique position I'm in today.
Jo-Ann Hamilton
Definitely. And I think that approach works best in frontier and emerging markets. So it's paying off handsomely, I'm sure in the Guyana experience, which we'll get to a little bit later.
Steven Jasmin
Absolutely without a doubt and that's where at any point in our lives, there's everyone is constantly having wins and losses. And you're always looking, you know, in technology world; they talk about, you know, product market fit. You know, they in Silicon Valley, there's kind of this mentality of what's called failing forward. And so as you continue to get more and more experience on your with yourself and with your partners and, and in the world and in Game of Life, if you will, it's about how you continue to learn from the mistakes and I can tell you candidly that over my career I've learned more from my failures. And I wouldn't call anything a failure, it's more of a life lesson and a learning experience, which is all about mindset and, and how you look at the world and how you get up every day. And it's through those failures and through those missteps, that you really kind of understand things. There's a saying, I'm going to butcher but you've never you can only tell the test of it a general or boat captain when it gets to rough seas and when things are challenging when life is good, and things are growing and when we were in our hyper growth phase with Flashpoint originally. And growing rapidly and the money was flowing, ultimately, I didn't, I was too busy, caught up in the moment, and I didn't appreciate it one and two, I didn't understand, quite frankly, the opportunity that I had and I didn't know how to run a company and I didn't even realize because you don't know what you don't know. And that's a big thing I find in all aspects of life is that it's not a bad thing, but people just there's something to be said for experience because a lot of people just don't know what they don't know. And that applies in all walks of life in all areas of life and in all backgrounds. You know, it's if all you know as x then you can't be expected to know x plus y with the implications of x plus y. And so with that, that's where my ability as a consultant and the banker have kind of positioned me uniquely to go through life because I'm able to learn and walk into any situation and draw on all my experience and to also kind of step outside of the situation and look at it with a critical eye, which is what you know, organizations these fortune 10 fortune 50 organizations that we worked with, would hire us to do because they were so busy caught up running their big organizations and dealing with the crises and then the issues with Delta Airlines was one of our first clients I had I built Flashpoint originally off a contract with a bankrupt fortune 500 company. And so, you know, watching them go through that process and helping them and some of the results that organization brought to that our little organization 40 People had a massive force multiplying effect on an on a company with you know, over 50,000 employees and we help them navigate the waters of bankruptcy and help, we focus on the cultural transformation side during those during that time and, and really helped bring them from, I want to say nine or 10 on the JD Power Rankings to number one or two, with some of the initiatives in the programs we've developed for them as a consultant. And so you know, if I realized that, through that process, the biggest lesson I took away from that is that I and my team is a small little like, I like to call it a peashooter organization. That's under budgeted and undercapitalized, like all you know, startups are at the time. We could still have a massive impact that today you know, if you get on an airline, and you talk to any delta employees that have been involved, you know, for 15 years and are still involved with Delta, you know, and you mentioned the velvet rope tour, you'll see their face light up because it was a it was an instant that they'll never forget that program that we developed and it allowed us to, you know, make literally a global impact. And so that mindset has never, so the size of any opportunity has never intimidated me because I was fortunate enough very early in my career to realize that, you know, one person and one small team of dedicated people on a mission can make a massive impact and really help change the course of a company in no small way. I'm not going to say we were the only reason that all that happened. But we did help turn the Titanic in a different direction. I'm not saying we helped turn it in 180 degree direction. But one of my close friends and mentors was a pilot and worked with Warren Buffett and he was on the Air Force One squadron for a while and one of his big sayings is that when you are leaving San Francisco buys a plane. There's a super two degree difference as you leave the airport by air and whether or not you end up in New York or Miami. And so you don't have to make massive impacts. You just have to change things by one or two degrees, but over long distances and time that can have a really large effect. And that was one of the things I was fortunate enough to learn early, and I continue to practice and kind of keeping my mindset as I move through life and approach opportunities and realize that one or two degree differences actually do really add up over the long term.
Jo-Ann Hamilton
Wow, that's incredible. Steve, you know what I was going to ask you and you kind of touched on it. You're 21 and you said you raised three I think was 3.5 million you said for Flashpoint. And I was going to ask you, how does it feel to be 21 and working on such a massive project? Were you intimidated at any point but it sounds like you weren't you just went for it?
Steven Jasmin
Yeah ultimately, you don't realize what you have until it's gone and you don't realize how easy it is and you know, it was a lot of people talk about how hard the first million is to make and that the second million gets easier. And you know, I can say that that's absolutely the truth. People don't realize that, you know, I started working in, in business and as an entrepreneur, you know, in technology when I was 15 years old, and I had started working in the with my partner who launched Flashpoint with you know, when I was 15. And so, I had had you know, we've been working hard for six years, and he had been working for over 10 years, you know, in the industry because he started really young as well up in New York doing what he was doing. And it was those skills that we developed and that time that we spent to give us the platform to quickly dive into what we're doing with Delta and consulting and providing the services and from there we were able to hire some key people. We were fortunate I had the former president of Cong airlines Delta's low cost carrier. We brought him on board. He was a phenomenal help to us. You know, he helped expand us into a lot of other Fortune 500 companies gave us a lot of credibility. And so here I was 21 years old thinking I was the smartest guy in the world. And you know that naivete because Fortune favors the bold and but sometimes you're not really trying to be bold. You just don't know what you don't know. Like I said earlier conversation and so it was through that process that I just tried to surround myself with brilliant experienced people. And that enabled us to really keep pushing forward and to keep growing in and learning and that's the biggest thing is that you're constantly learning and evolving. And you've got to you got to be willing to adapt or else you fail. And that's really the ultimate reality of it.
Jo-Ann Hamilton
Yeah, you gotta be agile, don't you?
Steven Jasmin
Agile is a great word for it. Without a doubt
Jo-Ann Hamilton
Yeah. So from Flashpoint, what happens next, like give us the lead up to when you start working with the families in Louisiana.
Steven Jasmin
Great, yeah, no, great point. And so along the way, unfortunately, as a result, everyone remembers the recession in 2008 and nine, you know, we launched flashpoint in November 2015. And grew overnight, you know, we're working on site at Delta, you know, 12 hours a day, and then we're going back and the team was all at the office painting and putting carpets down and putting together desks and setting everything up and through that process it was it was surreal, and we had our hyper growth story, but as in startups, you know, startups continue to need money and you're reinvesting every penny that you make into the growth of the company and my partner and I, you know, definitely did that. And unfortunately, you know, the recession of 2008 and 2009 hit, and we took it on the chin like everyone else, and being a professional services company. You know, it didn't matter that I had a client list that, most people on Wall Street in Madison Avenue would drool over spent their whole careers, wishing they had that opportunity or wishing they had a book of business like that. And we're working in those boardrooms and C suites. You know, we ended up having to wind down the firm; we didn't have the war chest to ride out the downturn. But even through then because of my network and some of my mentors. I was able to bring in a chief restructuring officer to help us through that process. And through that we shut down the company and ended up reinventing ourselves. I took a basically a sabbatical for a year to get my head back on straight because it was sort of like a meteoric rise and a meteoric fall and, every day I wake up and so thankful I went through that process because I learned so much, and I wouldn't even thread continues and we'll get to a blog, explain how that ended up helping you get to Guyana and being Guyana But in that process after that happens, and I had taken that sabbatical, I ended up going out and getting my investment banking licenses. And I became you know, I got my server registered licenses, my 79 and my 63 and ended up becoming started out as a vice president of one boutique investment bank and then ended up working as a managing director at another one before in 2014. We ended up I hung up my licenses on the sell side, which is that's where you need the licenses if you're selling brokering deals. And we set up Flashpoint 2.0, as I call it, and that was kind of a different approach where we wanted to work more with the SME businesses and we're consulting with these multi-generational family owned businesses. We reinvented ourselves as sort of the bank capital being consulting, fractional family office manager. And so with that we were we opened the practice down in 2014 down in Louisiana, and started advising some of these families and helping them you know, our model was, we don't want to a piece of your multi-generational family business, hire us as a private equity advisor to come in and help streamline those companies and they can run more efficiently because for a lot of those organizations much like Guyana a CFO was looking for the CFO, despite them being a large 20 30 50 100 million dollar you know, annual turnover business. They just didn't have the, the wherewithal or the necessity and the understanding that you needed the sophisticated level of advisory work. And obviously, they're too small for the Big Four consulting firms to worry about working with them. And so there was a unique market opportunity to set up sort of this fractional family office management consulting practice. We would come in and provide a lot of these services. We were able to bring a lot of value because there's so much fat in this family owned companies because they're hiring the friends and their family and the printing money and so there's a lot of opportunities to improve and streamline things. And then we also big part of our business was helping on the trust in the state side and the tax planning side. Because as if you're fortunate enough to be in a situation where you're in an owner of one of those types of businesses, you know, there are there are things you can do to help make them even more efficient from a tax planning strategy and also preparing for generational transfers of ownership. And so we would help there a lot because we can bring a lot of value there because for them that was all kind of a foreign language and they didn't know how to navigate those waters. You know, and then what we would do is we would look to work with them on the alternative investment side of the house because these families are blue collar families, they don't like public equities. They like to own things that they can touch and feel and brag about with their friends at the bar. And so instead of working with these families to own the corner bar room, we would work with these families to start investing in real estate and in some higher quality opportunities that you know, generate more yield than what I call the vanity investments of you know, owning the local bar room or sitting on the board of a local bank. You know, there are bigger opportunities. Those things are great from a political standpoint, but they're not good from a financial standpoint. And so, it was our job to help teach them and educate them and manage some of those alternative investments for them and with them.
I had my investment banking licenses and then we opened up the practice in Louisiana. You know how that practice was structured was that I would spend one week a month in Louisiana and then that gave me the freedom to spend three weeks a month focused on and doing what I want to do and investing in what I want to invest in. And so I ended up opening an office out in Silicon Valley and getting involved with one or two technology startups that allowed me to and I basically became their West Coast office. And so I was I was bounced between Atlanta, Louisiana, and San Francisco. And you know, at the time I was spending most of the majority of my time out in San Francisco I've always been a 300 day year on the road consultant and banker. And so I love that process. I love meeting people. I love connecting dots. I love working in new markets and understanding systems. You know, I've got a big IT background that I didn't really get into but prior to college and university I grew up in the.com bomb and I was a senior Systems Administrator for the school system I worked at. I was fortunate enough to kind of get a student internship while I was still in high school and quickly rose to the ranks and I'm an Eagle Scout. With the skills I learned becoming an Eagle Scout, and it allowed me to kind of get to the top of my class with in high school and up the top of the cohort for all the student interns so I ended up working directly with the support of the Board of Education and helping those guys working there. And as a senior systems administrator, I really understood technology and I got involved in the computer what they call today now cybersecurity, back then they called us hackers. And so technology and I learned systems work and I've always taken that what I call the hacker mindset to anything I do because what hacking is computer hacking is understanding a system and figuring out ways to take advantage of it and position yourself to a bad way to do it as exploited. The good way to do it is accelerate your leadership in it and accelerate the opportunities that you find in it. So, over the course of my whole career, I've always had that mindset and it's positioned me to be able to really grow quickly and learn quickly any environment I go into, because I take a very analytical approach to it and I look at it as sort of a, you know, a mechanical environment and understand here all the pieces whether it's the human capital pieces, the political pieces, or the actual tactical pieces and how the markets work and how they interact together, and then leveraging the value that I can create, to help impact those systems and make those changes. And that's really with that technology background and that technology oriented growth mindset. It's really how I so quickly was able to scale and grow something these businesses and to push them forward and to see the opportunities and realize that it's all about information access and understanding the world around you to see how you can position yourself at the points that really create value. Because ultimately, that's how, as a consultant and the banker, capturing that value, monetizing that value, and executing against those constraints is where there's opportunity, and that's how you generate alpha and generate returns both for yourself and for your partners and investors as an asset manager and as a as a banker.
Jo-Ann Hamilton
I want to give our listeners an idea of these families you were working for in Louisiana because I think there's a big parallel between those families and what you are doing in Guyana. So these are basically like families who have been in Louisiana for many years. They've gotten into the oil industry, and they've made a lot of money but they're not exactly the most modern and up to date in terms of how they run their businesses. Right? Is that accurate? So like what exactly are they doing in the oil business? Can you give us like an idea of that, like, Give us an example not names or anything obviously, full of like a kind of business these families would be running just so we can get an idea of what it what it was like.
Steven Jasmin
Yeah, absolutely. So most people don't truly understand how the oil industry works. But, you know, I'll give you a quick overview of it so that that makes a lot more sense and then you can understand where those families fit into that supply chain, but the international will development exploration industry is you know, in the international oil companies that run it, you know, you have the IOC s as they're called, which are the Exxon Mobil, the Hess, the hotels, the Chevron's, you know all those name brand companies, the BPS of the world. They're essentially more of a bank and a financial institution. And I liken it to the developer in real estate. And so, you know, most people think it's so complex, and it's this big mystery box and it's a big mystery industry and it has a lot of complexity to it, but at its base form, you've got these, you know, major developers, if you will, and that and that have these trillion dollar valuations and massive organizations because they've got they're responsible for, you know, pulling out of the Earth, our most critical asset, which is oil. And with that they then you know, but there's a lot of risk with that, right. And so, to help mitigate that risk, the whole industry is based on mitigating risks. And so like any industry and so, what they do is that they hire just like a general, just like a developer does. A developer doesn't actually build things. They're not the construction company that's hired. And just like in the oil industry, those international oil companies hire the slumber J's, and the Halliburton was and the Baker Hughes and as VMs and the technical FMCS and those are the service providers that are become what I would call the General Contractors of the oil and gas industry. And then those companies don't want to have a lot of the liability and so they try to push the liability down even further. And that's where they would push it to those multi-generational family owned businesses. That I was working Louisiana are currently being developed in Guyana but some of those businesses to answer your question you know, included everything from the machine shop, to staffing companies, to equipment rental houses, to even the big boat companies are the OSP, the workboats and the offshore vessels that in the offshore oil and gas industry, those OSPs are these two and 300 foot boats that are essentially the tractor trailers of the oil and gas sector. And so you have these oil platforms, whether you're an exploration or production that are in the middle of the sea, you know, America, there's what's called an offshore shelf, which is shallower wells, and then there's the deep-water wells. But either way, you still have to bring parts and people and food back and forth from the shore to those platforms and until those rigs and so a lot of them use airplanes or helicopters, excuse me to bring in you know, personnel but you still got to feed those personnel. You still got to those people need toilet paper, they need lubes and all kinds of different supplies that get consumed on a daily basis cleaners, solvents, chemicals, thinking all the kind of replacement parts, and so they would have these 203 100 foot work boats that would go back and forth and literally be nothing more than a tractor trailer on the seat. And so those were the types of companies that we will be working with and partnering with and helping to streamline them and make them more efficient and working through that process. You know, we would understand their business models; we get to understand the fundamentals and learn kind of what their portion of the value equation was, and how they were contributing value. And learned a lot about how the oil industry works, you know, had I tried to use my banking background and go, you know, through the front door into Houston and, and build a practice that way. I never would have been accepted. So I like to say that I was brought in to kind of the backdoor into the oil industry through Louisiana, because in Louisiana, I get to meet all my families worked with the slumber j's and the Halliburton, and all those big international oil companies as well as the international service companies that are publicly traded that you see on the stock exchanges globally. And you see on CNBC all the time, and they talk about the oil and gas sector and my family's we're the companies that were hired to actually execute everything that needs to be done. And it was, like I said, everything from the rental side, the human capital side, but the staffing and labor all the way through to you know, providing the transportation and logistics to move to keep the oilfield running on a day in and day out.
Jo-Ann Hamilton
Okay, so in developer or real estate, they're the subcontractors they're like the tier three in the food chain.
Steven Jasmin
Absolutely, without a doubt.
Jo-Ann Hamilton
Okay. Very interesting. I mean because obviously, we our world revolves around oil, but I think this is the first time I've ever had anybody break that down to me in a way that I can understand the parallel to real estate was perfect. Perfect. Yeah.
Steven Jasmin
I've talked to some very smart people over their career oil and gas is still a very complex box. Yeah. And it's funny because when I give them this analogy, they like all of a sudden it clicks. Yeah. Makes a lot more sense to them and they see it and understand it and appreciate it a lot better and if you understand that kind of pecking order hierarchy, if you will, it really positioned yourself to be able to once again, look at it and this comes back to you know, my hacker mindset and the ability to kind of look at a system and break it down into its simplest forms, and kind of see how the parties interrelate and how things work together. And what everyone's role is, and if you understand what your role is, then you can understand how to create more value, both for the service companies and us as a provider who those companies and how to, and part of why we've been so successful is that because I had had such a masterful experience with Flashpoint originally talking and learning the language of fortune 500 companies and understanding how they think and how they work. You know, as I started to represent and partner with and work with these multi-generational oilfield service companies I knew how to help them accelerate the relationships with those international service companies and the international oil companies because I understood the mindset and how to communicate and talk and present information and data to those companies with them, so that they could strengthen their relationships. I mean, they've been working with those companies 20 years, 30 years before they even met us. But at the same token, it enabled us to really, you know, help bring more value because we were able to, once again make some of those two and three degree changes in the dynamics of their relationships with those companies to actually kind of help get them as a service provider higher up in the ranks, because they were competing against a lot of other people that didn't know and didn't have the experience of understanding how those fortune 500 companies thought at the board level, which everything that happens at the board level sets the mindset and culture and the way of thinking for the entire organization. And so helping those families, learn how to speak that language and learn how to position themselves and give them that leadership and mentorship helped us to unlock and create a tremendous amount of value.
Jo-Ann Hamilton
Definitely, so how long I know you, you set up you got to gain in 2017 How long did you work with those families for before you made the transition to creating SC three and then getting into Diana?
Steven Jasmin
So as you know, in 2015, there was a recession in the oil and gas industry. If you weren't in the oil and gas industry, the only recession most people remember is the 2008 one. But in 2015 there was a big price shock and had a lot to do with the dynamics of the fracking environment and the cost structure of the industry. That's a whole another conversation that I'll spare you is not really relevant to this but you know, with that from 2014 to 217 my time in Louisiana started to come to an end because a lot of unfortunately a lot of the families that I've been working with, ended up becoming insolvent and having to file bankruptcy. And it was only through my background of having to do it for myself, which I was able as a consultant to then go in and help them go through that process. And that's where I became a chief restructuring officer, working with those families to represent their interests with the creditors. And with the lawsuits and all the mess that comes when things don't end up going right. You know, but I had already navigated that personally. You know, back in 2008-2009 me and with the partners and the people and the advisors I brought in to help us through that process. You know, as a consultant, I sort of learn the playbook. But what was unique is that not only dialing the playbook, but I also had the empathy of you know, myself at one point not being able to cover payroll, and all the money that we lost trying to keep things moving and reinvesting hoping that it would work out but not being pragmatic enough to know that it wasn't unfortunately and that's just human emotions and human dynamics and, and so I was able to kind of take those skills and help those families and then that's where I became that Chief restructuring officer and as a part of being what's called a CRO you become kind of the, you end up running the bank from companies on the family's behalf because the creditors want someone in there watching things that is not the guy that are the families that we're running a day to day that needed more of a fiduciary and pendant person. And so the families and the creditors would work together and kind of Appoint us as their de facto representation as a kind of a neutral party to navigate those waters and navigating those waters. That's where you know, I started selling some of those OSB is that I was referencing throughout the Caribbean on a liquidation basis because when they're not using their highest and best use in the oil in the oil services industry, where they're those boats are being rented for two 510 $1,000 a day literally for years on end. You know, the next best place for them to be used as an island hopping delivery vote between you know, the islands and because they've got big fuel tanks and water tanks, they can bring fuel and water and supplies between the different islands. And so that's how, you know I was liquidating those assets and it kind of became a nice segue because the work was winding down in Louisiana. Because unfortunately, the families were insolvent and some of them didn't make it through. But I was able to leapfrog down to Guyana and go from where the oilfield services industry in southern Louisiana is kind of fading down at the end of its growth cycle or the end of its life cycle to Guyana where we were just starting with the growth of its life cycle. And so once again, understanding systems and understanding the environment and understanding, you know, cycles is a logical kind of next step, if that makes sense.
Jo-Ann Hamilton
Yeah, definitely. Well, that's a pity it didn't work out for some of those families. Do you ever stayed in touch with them? Do you know what's going on with them now? I imagine they just transitioned into other businesses or what do you think happened for them?
Steven Jasmin
They're around and we still communicate and you know, some of them are still running full steam ahead. You know, I was fortunate I brought one of those one of those families down to Ghana, it was it was a privilege and so they're, they built an expanded now and I've kind of gone international as a result of working with us and we're really excited about that. But and some of them are we're more towards the edge of retirement anyway. And so it just kind of went off into the retirement mode and, you know, but ultimately, it's they're going well, and they're still plugging away in some way, shape or form, but sort of a shell of what it used to be, to be honest with it.
Jo-Ann Hamilton
Interesting. And tell us now about Fe three to kind of give us an idea of what exactly SC three does.
Steven Jasmin
Yeah, Smart City Clearing Company was originally founded because of my tech background. And so before I even knew where Guyana was on a map, quite frankly, back in 2015, I launched SC three as a result of all the work I've been doing in Silicon Valley. And so I've been spending a lot of time as I mentioned earlier out in Silicon Valley, working with a couple of startups that we had invested in and were participating in and in that role, you know, what I realized was that all these big internet companies really wanted to get access to and bring all this new technology into municipal governments. And it was the rise of the smart city movement back then, and but the problem was, I was going to conferences all around the world. There's a smart city World Expo, I go to every year out in Barcelona, you know, and I was I was attending these conferences. And some of the struggles I had seen firsthand with even the startups I was working with, I realized that there's so much of this new technology that needs to be embraced, but cities don't know how to pay for things. And so smart city Clearing Company was originally founded to help fortune 500 local tech companies work with and figure out ways to finance their technology installations into these cities and develop some of the financial product to help them be able to pay for the investing into these cities. And so, we started out doing that I was looking at different bond structures and different ways to do it. I was fortunate enough to be working with some of the big investment banks throughout the United States that are what's called MSRB advisors, which is every city issued bonds and every government issues, bonds to help finance growth. And we were developing and working with them to develop this product to help pay for all this technology innovation, because at the time, the only people getting rich through smart cities were the conference promoters that were hosting the conferences for smart cities.
You know, there was a big gap between the emerging technologies and how to, you know, integrate them and deploy them and then obviously, you've got with government a lot of legacy infrastructure issues because they've got, you know, these old outdated on premise systems. This was great as the cloud transition was heating up. And everyone was starting to go to the cloud. And so, you know, that was what we originally founded, se three around and the whole belief that, you know, and this was back, even in 215, that there's been trillions of dollars and underinvestment in the United States in infrastructure and in municipal infrastructure. Yeah. And so I knew that, you know, it's coming. And once again, at the time, I was seven years too early for that, you know, just last week, Joe Biden was on the floor of the Senate pushing a $4 trillion infrastructure investment bill as a result of COVID and as a result of the need to bridge that gap with the investment in cities and infrastructure, government infrastructure. Yeah. The United States and so that was where we started with us two, three, and then I found Guyana, and I was like, whoa not only is there a chance now to help bring smart technology and smart cities to whole country, and it was like, This is a once in a generational opportunity a once in a lifetime opportunity to come into a country of 800,000 people and be able to bring kind of our experience and figure out how to finance all the growth that guy who is going to be facing over the next decade. And so, you know, what smart city Clearing Company is, is we're officially a merchant bank. We're domiciled out of the BVIs and we're unregulated and a merchant bank is essentially the equivalent of investment holding company and so we own different companies where we essentially go out and raise money to execute projects and opportunities with investors. It's not you know, we don't work with retail investors. We only work with institutional investors or smart money. And every transaction and every opportunity is kind of on a discrete basis. And so whether the first company we launched in Guyana, that's a portfolio company of Smart City, St. Grey is a commercial a western style commercial real estate firm called Akroyd properties. And so, in Guyana, you know, over the past four years we've worked together to help lease you know, over a half a million square feet to the international oil companies. We also worked to get and develop our first 15,000 square foot warehouse as developer of record, and now we've got over roughly 2 million square feet and create development on the commercial real estate development side that we're you know, working through raising the capital and working through the pre development pieces of it to be able to build the country because as you know, as of right now, there's still only two internationally flights, hotels, in Guyana, there's no desire to McDonald's yet or Starbucks and so there's a lot of growth coming. And we've positioned ourselves we believe that, you know, before you can start focusing on the tech investments and the smart city side of it, you know, you have to have places for the people to sleep and places for people to actually eat and operate in the market and grow and so, at the end of the day, SC three is going to continue to evolve and over the next 10 years, our vision and my vision for the organization is to become you know, a commercial bank. And a full broker dealer, and a full financial services firm, positioned to be the de facto asset manager for international investors, whether they're pension funds, insurance companies, endowments, family offices, high net worth investors, who want to get access to the growth that's going to happen in Guyana, and we sit at that seat as a merchant bank and as a as a financial and asset manager, helping to bridge that gap. You know, leveraging the four years of experience and things on the ground partnerships we've developed. Last year I spent 330 days in country in Guyana. So I wrote out, you know, changing government COVID closed airspace, curfews, 6am to 6pm or 6pm, to 6am, curfews, all that stuff, to really get to know everyone and to understand what the environment looks like and where and what the country needs, because as a steward of capital and as, as someone that manages money and manages investments, it's all about raising capital with a story like Guyana is easy. It's about I'm more concerned about the execution once I'm given that capital. And so we've been fortunate to date. You know, we've self financed everything off our own balance sheet; we've not raised any third party money. You know, we've worked hard to really understand things. And now Guyana is finally poised to really start the flywheels catching for the next phase of growth and we're at the center of that. And that's really an exciting place to be. And it's been a long journey. And when I first got down there, I was naive once again, and thought it would be something that would happen in a year or two, and it's taken four years, but as startups and in Guyana as a startup nation, and so, going through that process, you know, we've now positioned ourselves to really focus on Okay, here's where we're going, here's what we're doing. And now let's open the doors and start telling the story and you know, going around and over the next two months, I'll be in, I think, eight different countries across the world, talking and telling and sharing the story of Guyana sharing my experience, and really starting to attract massive investment into Guyana to help properly grow Guyana and take advantage of the opportunities that most people will never see or never have access to.
Jo-Ann Hamilton
Right, sure. Now, what I want to give the listener right now is in the world of banking. So as the merge, you know, you have investment banking, and they deal with the more institutional clients and then you have sort of retail banking, consumer banking for individuals, and then you kind of sit in the middle I guess that's the merchant bankers. So your job is to sort of, I guess, attract to I guess your underwriting. Do you do you secure the funding you underwrite it and you also attract and work with the high net worth individuals or the Uber high net worth individuals and the other sort of institutions don't want to get into Guyana? Is that where you are? Is that sort of in that full spectrum?
Steven Jasmin
Great question. Great point. So, you know, as a merchant bank, think of us as a private equity fund or a venture capital fund. You know, we've got portfolio of companies we've got investment opportunities, the merchant banks, taking those companies is kind of where the just like a GP or just, you know, like the GP in a VC fund or project or even founder Real Estate Fund. Yeah we sit in that spot as the GP and then to your point, we also have the investment banking platform, the investment bankers, create the investment grade product, and package that product and issue that product to the market. And then they run the process of raising the capital, whether it's debt or equity. And so what we're doing with SC three is you know, we are building a broker dealer, we're positioning ourselves. It looks like over the next six to eight months, we'll be opening offices in Jamaica, in Kingston, Jamaica, okay. And that will be the center of our practice and where we do all of our capital formation and our financial services back office. So the merchant bank, is where we park all of our stakes and all these different ventures and businesses and are in them and then on the investment banking side. You know, that's where we actually productize and take to market and raise the capital and as the lead book runner in the lead arranger it’s called have these new issues. When you have a new issue, it's either debt or equity or some projects require both and so you have to go raise two different types of capital one from commercial banks and insurance companies and then one from more higher risk side that are wanting the equity exposure because the return profile is different. Obviously, you have a secure offering, so the risk is a lot less and it's asset backed and so you've got a piece of real estate that people are giving you a loan against, but you also need the equity the at risk capital, that is required to bridge the gap and to provide the opportunity and so we as a as an investment bank, and capital markets advisory firm, come in and are now issuing investment grade product into the market. You know, that's only focused on Guyana, nothing so there's no one. Really, there's no one doing that. Currently, there's commercial banks down in Guyana, there's about six of them. There are regional banks throughout the Caribbean. But, you know, no one has really gotten to the point where they're starting to really issue hundreds of millions and billions of dollars of product and that's going to come but ultimately someone has to create that product. And so we're in the position to do that. And then once that money is put together, this is where we work as a direct investor in Guyana to deploy that capital and manage that. And so that's where our Bain Capital Bain consulting model comes in, where we come in and actually work with our local guidance partners, and build these companies and build these organizations to actually execute these projects. And so this allows us to kind of once again, take advantage of where the country is going, and our knowledge and our experience combined with our sophistication, and our ability to tell stories, and build networks and build systems and build infrastructure so that we can start bringing in the capital to the country because there's been a lot of underinvestment over the past five years, due to a variety of factors in Guyana because of the result of the oil fines, so the only real major investments that have occurred in Guyana is the international oil companies building out the infrastructure. And so Exxon Mobile and their partners has an SI NOC Nexen and a lot of the other oil companies that are there have invested close to probably I'd say $10 billion at this point. If not more into Guyana from an oilfield development standpoint, but that investment has not yet been matched by foreign direct investment into the commercial real estate industry, the construction industry, the infrastructure development, you know, and so there's this opportunity and pent up demand for all these, all these investors are wanting to come in but there haven't had the opportunity to come in yet. And it's our job to kind of bridge that gap and act as the liaison between these international asset managers and the local operating environment.
Jo-Ann Hamilton
Thanks for listening in this special bonus series of the rare birds emerging markets podcast on Guyana, startup nation. You've just listened to part one, the origin story. If you enjoyed listening in, rate us on your favorite podcast platform, and if you thought this was informative, we look forward to seeing you for part two, the Guyana story. Until next time, rare ones. Bye for now.
Tags: Interviews
