We have big news for you from World Tree. It has dropped its minimum investment from $2,500 to $1,250 through Valentine’s Day.
World Tree isn’t your usual startup investment. When you invest in World Tree, you’re not getting traditional equity. Instead, you’re sharing in the profits of this remarkable timber company. And if you’re concerned about the ethics of investing in timber a startup, don’t worry about World Tree. The trees World Tree grows (and eventually chops down) actually help the environment.
This is the second time we’ve recommended investing in World Tree. It’s one of our most popular recommendations ever. And why not? It’s a rare low-risk, high-reward investment. And a chance to help save the world one tree at a time.
You can learn more about World Tree by watching our First Stage Investor Startup Insider interview with Dr. Cathy Key (World Tree’s chief operations officer) and Angela Nauta (World Tree’s chief investment officer).
Or you can read Andy Gordon’s recommendation below.
Forget asteroids, nuclear war or a global pandemic. What’s going to destroy the Earth as we know it is climate change. If you think it’s not coming soon, you’re right. It’s already here.
By 2040, the average temperature of the world will have risen 1.5 degrees since the late 1800s, according to the U.N. Intergovernmental Panel on Climate Change. Tens of millions of people (especially in small island countries) will be forced to confront serious flooding. Extreme heat will become more common for as much as 14% of the global population. This is in 20 years’ time!
What happens if temperatures increase by 2 degrees? Millions will lose their homes. But that’s nothing compared with a 4-degree increase… That would bring major flooding to coastal cities around the world, significantly increase water scarcity and malnutrition, and result in unprecedented heat waves, according to a World Bank report.
Governments are increasingly aware that they need to do something. And in their own messy and ineffectual way, they’re trying to get a grip on this massive problem. But if we’re counting on our governments to fix this problem, we’re in big trouble. Fortunately, dozens of startups are developing new technologies and business models to attack this monumental issue.
These companies’ solutions range from simple to wildly ambitious. It doesn’t get more low-tech than painting streets white to reflect sunlight. The high-tech counterpart is sending sets of mirrors into orbit. These mirrors are decades away and, if ever implemented, would cost at least $1 trillion.
Another high-tech idea is strategically spraying aerosols into the atmosphere. Volcanoes that spew large amounts of gases into the atmosphere do pretty much the same thing. But it will be years before the full benefits and risks of “aerosol injection” (aka solar dimming) are understood. Harvard’s initial test of injecting calcium carbonate particles into the stratosphere is years away. Fortunately, there is a solution that’s ready right now… that has a significant impact on carbon dioxide levels… and that does NOT require government help or participation. Best of all, it’s profitable.
World Tree to the Rescue
That solution comes from World Tree, which is planting trees all over North, Central and South America without any government backing. But the company isn’t planting just any tree.
World Tree is planting only Empress Splendors. These are the world’s fastest-growing hardwood trees. An acre of Empress Splendors absorbs 103 tons of carbon dioxide a year (11 times more than any other tree). It can be used to make furniture, musical instruments, veneers, surfboards, sailboats and more. (Critically, it’s NOT used as fuel, which would spit the carbon dioxide right back into the atmosphere.)
Fast growth. Carbon-eating monster. A wide range of applications. All necessary ingredients for World Tree to include YOU as a financier in exchange for pocketing surprisingly large profits down the road.
World Tree wants to plant 3.5 million more Empress Splendors over the next five years. For that to happen, it needs farmers and money. So it came up with a profit-sharing scheme to attract both.
Investors can finance planting a full acre with a $2,500 check (which is also the minimum investment). As an investor, you get 25% of the profits. Farmers get 50%. And World Tree gets 25%.
Everybody makes out incredibly well. Here’s the math. One 10-year-old acre generates 24,750 board feet (a conservative estimate that assumes a 25% loss of trees planted). The revenue generated per board foot (after costs) ranges from $3 to $14. At $3 per board foot, that’s $74,250 in revenue. Your 25% share comes to $18,562. World Tree gets the same, per acre. And the farmers get double that amount. Using the lowest price the lumber could fetch, with a cautious 25% loss estimate, investors still make a 7.4X return.
I believe the 25% loss assumption is too high and the minimum $3 per board foot price is too low. Most farmers are currently reporting survival rates above 90%. And Australian company Paulownia Timber prices sawn board at $10.25 per board foot. For the same board that has been dried and planed, the price increases to $13.05.
If we choose NOT to be ultraconservative and put the loss of trees at a more realistic 10% and raise the price to $10 per board foot (best-case price is $14 for high-grade lumber), your 25% share comes to $74,250… on a $2,500 investment.
THAT’S A 30X GAIN.
So for this investment, I consider $18,562 the minimum expected return and $74,250 the maximum. For more information, go to World Tree’s Wefunder page. It’s raising up to $10 million. You’ll need to sign up for an account there if you haven’t yet. Once you’re signed in to Wefunder, head over to the World Tree page. Then enter the amount you want to invest and click the green “Invest” button on the right side of the screen. The minimum investment is $2,500.
All early-stage investments are risky. While this one has substantial traction and a very reasonable valuation, you can still lose your investment. As always, don’t invest money you can’t afford to lose. You should expect to hold on to this investment for 10 years.