EIGHTEEN MONTHS AGO Congo American LC opened the doors of American Language Institute in Kinshasa.
We started with a decent plan. Then experience showed us what had to change. We are adjusting accordingly.
ALI's product is now proven, our business process is streamlined, and our competition is in retreat. We have arranged to move the Language Institute to a vastly superior location in the heart of our target market. We expect to achieve operational break-even during the first half of 2019.
Beyond the world of adult education, we are entering a partnership with a well-established and highly respected K-12 school group with plans to launch an integrated, intensive English program in their flagship school in September 2019. We are also developing a complementary youth environmental education and tree-planting program that will give us the opportunity to teach core societal principles and life skills to hundreds of thousands of young people.
Our work has been financed by $1.22 million in equity and debt over the last two years. Significant cost-cutting and program changes provide a path forward to profitability. Additional capital of $130,000 is required to open at the new location and reach self-sustaining operation and profitability. As of today, $90,000 of this amount has been secured so we are still watching for the remaining $40,000.
I invite you to participate in this final tranche of start-up funding. Completion of this funding will enable us to return to Kinshasa and make the changes needed to start a new session of classes.
The time is right
The long-overdue election in DR Congo has passed without a major disruption. The residents of Kinshasa are optimistic about the new government. They are returning to their hard work of earning a living and seeking better opportunities. Many see English language skills as a key contributor to a better life.
With the political situation calm, we started a new session on February 4th. We are implementing the changes described in this report, which will set the company on the path of growth. The remaining funds are needed urgently to make it happen.
It's a "go/no go" decision.
Will we go forward?
Marcy and I are able to continue working without compensation thanks to a modest monthly allowance her parents kindly provide. We are 100% committed and we see a realistic plan for achieving financial break-even in the next two quarters, with prospects for significant growth after that. The staff at all levels are tightening their belts, adjusting work hours and finding ways for our organization to reach financial self-sufficiency and profitability. Scroll down after this letter for details on the opportunities ahead of us and our preparations to take advantage of them.
For all of these reasons, those of us who work on the ground believe the decision should be "go". Will you please spend a few minutes reviewing the information below to see if you agree?
With deep gratitude for your confidence,
Congo American LC
LOCATION, LOCATION, LOCATION
Accel volunteer Claire Matheson standing in the flood that appears in front of ALI's original building every few weeks during the rainy season. Click on the image to watch a 3-minute video comparing our old and new sites. Music by Congolese artists Samba Ngo and Baloji.
ALI's original location is in the wrong part of the city for most of our clients. It's also too expensive and prone to flooding. But a great alternative is available. Watch the 3-minute video above for a quick overview. With your help, ALI's next session will be in a much better location at a much lower cost.
ALI + NATIONAL GEOGRAPHIC CURRICULUM = ENGAGED STUDENTS
The "Life" English language curriculum from National Geographic Learning/Cengage provides a colorful global perspective that our professional adult students find very engaging.
Our original plan was to use a research-proven curriculum that avoided the cost of books and CDs. Only one problem: our students didn't like it. We switched to "Life" from National Geographic and student satisfaction came to life!
COMPETITION FROM U.S. GOVERNMENT IS LOSING GROUND
The American embassy's Congo American Language Institute ("CALI") has moved into shipping container classrooms away from Kinshasa's core market area, while with your support we will be moving into the very heart of it.
Our main competition is a program of the US Department of State called "CALI". CALI recently lost the lease at its main location. And it also appears to be losing market share to ALI.
THE BENEFITS OF RESTRUCTURING
On advice from our tax advisors and attorney in Kinshasa, we have established a non-profit entity for the public-facing aspects of our work. The dual structure is providing significant financial and operational advantages.
By placing some operations into a non-profit NGO called "Accel Academies of Congo ASBL", we have gained advantages in taxes, immigration and curriculum importation. Read more to see how it works.
CONTROLLING COSTS TO ACHIEVE PROFITABILITY
Accel American Academy teachers Adams Musela, Bienvenu Motshikana, Tyler Kaelin and Mariesa Miller (L-R above) donated much time and energy to pioneer our intensive English program for K-12 students.
Our primary objective for the first half of 2019 is for operational costs to be lower than revenues. This once-elusive goal is now possible thanks to extraordinary people like Adams, Bienvenu, Tyler and Mariesa. Click "Read more" for a deep dive into how we are cutting costs on the path to profitability.
FINANCING THE LAST STEP TO SELF-SUFFICIENCY
These charts summarize the resources that have sustained our work so far (left) and how new capital is being deployed to transform us into an organization that takes in more than it spends (right).
With the development stage behind us, we have a clear path to growth for 2019. Based on the lessons learned from our first five quarters of academic operations, we know what to do next. The capital now being raised will fuel the transition to self-sufficiency and profitability.
MARKETING: HIGH VISIBILITY AT LOW COST
These short Facebook videos feature beloved Congolese entertainer Roch Bodo. Playing off of local humor, they have provided ALI high visibility at a very low cost. Can you say "libulu Manzengele?"
In Congo, Roch Bodo is a famous and respected comedian and TV personality. We met him through our mutual friend Tshoper Kabambi, Congo's leading independent filmmaker. Roch now serves as our promotional spokesperson. His fame and credibility have rubbed off on ALI.
FINDING THE RIGHT PARTNER IN K-12 EDUCATION
Accel co-founder Marcy Matheson was part of the team that pioneered our integrated intensive English program for K-12 schools. The love affair between students and teachers was mutual.
Numerous private K-12 operators have expressed interest in partnering with us. After a difficult first experience, we are now in the planning stages with a highly reputable organization that has been operating in Kinshasa for 45 years.
ENVIRONMENTAL RESOURCES, EDUCATIONAL RESULTS
ENVIRONMENTAL RESOURCES, EDUCATIONAL RESULTS
Our "Tree Congo" initiative is designed to sensitize many thousands of school kids about their natural and societal environments, with global reforestation organizations covering the costs. Planting a million trees will be an important byproduct.
This market stall is across the lane from the offices we used while developing our K-12 program at Collège Moderne le Figuier in Météo, Kinshasa. This very common scene includes several people who are partially obscured by darkness or clutter, serving as a poignant metaphor for the enormous hidden potential of millions of people who are doing the best they know how while longing for better opportunities -- and the capacity to take advantage of them.
Congo American is in business to earn profits to distribute to the partners who co-own the company. We are in business in the DR Congo because it is a place where our efforts can make the biggest difference for the most people, creating opportunities and helping shape society for the better.
HOW TO PARTICIPATE
Your investment will provide the funding needed for Congo American to make the transition to a profitable and growing business. Investors will receive preferred interest units (shares) in Congo American LC, the US entity that provides administrative, school management and licensing services to the educational organizations in DR Congo (as illustrated here).
“Preferred” means that holders of preferred interest units will receive the return of 100% of the amount they originally invested before dividends are distributed proportionately among all interest holders. After completion of this round of funding, approximately 27% of all units will be preferred units.
This unique investment opportunity is offered privately to a very select group of personal contacts and accredited investors. The terms of investment, including the protections of preferred status, are spelled out in the Investment Agreement.
Other ways of supporting our work include tax-exempt donations to a 501(c)(3) non-profit and sponsoring the tuition of students.
To learn more about these opportunities, please contact Hugh Matheson by email or by calling +1.243.813.412.827.