Description
Executive Summary: For 15% of your grade, you are required to prepare a business memo
addressing the questions posed arising in connection with the background facts set forth in this
memo. Your memo should be approximately 5 pages, 12pt. font, double-spaced and submitted
via email not later than the beginning of the class of March 4.
Background Facts: Founded in 2009, IronOx Development Corp. is a small business investment
manager that makes debt and equity investments in U.S. based companies in the lower middle
market with Earnings Before Interest Taxes and Depreciation (EBITDA) of between $500,000 and
$5MM. The firm is based in Virginia and is a closely-held corporation. IODC and its principals
have been founders, general partners or sponsors in new ventures in various industries including
consulting, retail, services and distribution, and commercial real estate for more than a decade.
In the last decade, IODC has raised more than $50MM in debt and equity financing for more than
a dozen investment vehicles making investments in seed, later stage, change of control, and
turnaround opportunities.
IODC’s current portfolio includes several full-service car washes in Virginia and South Carolina
(White Horse Auto Wash), a car wash consulting firm, a pipeline installation company in Colorado,
and several commercial real estate properties in suburban Virginia. IODC is in the process of
reducing its commercial real estate holdings and is seeking investment opportunities to redeploy
its capital. You have recently been hired as a sustainability expert as the IODC General Counsel,
Tom Rust, wants to know how to invest approximately $1M-$3M over the next year as it divests
itself from existing commercial real estate ventures into more sustainable opportunities. IODC
has tasked you with researching the following issues and preparing a summary memo with your
findings and recommendations. The memo you draft should include an Executive Summary that
reflects an overview of your findings and recommendations; citations and links (where
appropriate); potential challenges and opportunities related to your recommendations.
1. The firm wants to understand better the tax credit transfer program established under
the 2022 Inflation Reduction Act to reduce its potential tax bill. Specifically, you are
tasked with summarizing: which tax credits qualify for transfer; what companies are eligible to transfer qualifying credits and what companies are eligible to purchase the credits; and what industries are most likely to benefit from the program.
2. Based on your area of expertise, recommend two to three IRA tax credits and related
investment strategies the firm should consider developing for potential investment and
whether there are opportunities for taking advantage of IRA’s tax credits with respect to
IODC’s existing line of businesses.
Grading Rubric: Memos will be reviewed for research, innovative thinking and accuracy in
analysis as well as for completeness and professional presentation. Sloppy, typo-laden or
incomplete memos will not meet the foregoing standard and will be rejected as incomplete and
will not be graded. Each memo is required to include the following sections: Executive Summary;
Relevant Background Facts (to the extent publicly available); Summary of Credit Transfer
Program; Recommendations for Tax Credits/Investment Strategy and Conclusion. We are
looking for you to demonstrate that you have done research relevant to the questions asked and
are applying both your area of expertise and research skills to potential strategies for IODC to
consider. We will be discussing the memos and strategies with the IODC leadership team for
their insight as to feasibility of proposed strategies.
Research and Reference Materials: Memos are required to include at least 3 citations in the
memo to answer the questions posed and for reference for any recommendations. When
considering tax and IRA-related research, you may want to review the following government
websites (research beyond these websites is encouraged).
1. www.gao.gov – U.S. Government Accountability Office website
2. www.cbo.gov – U.S. Congressional Budget Office (includes analysis of programs, other
than tax programs, included in IRA)
3. www.jct.gov – Congressional Joint Committee on Taxation (for technical summary of the
tax credits including in IRA)
4. www.crsreports.congress.gov – The U.S. Congressional Research Service, which is tasked
with preparing explanatory reports and analysis for Congressional members and staff
(including https://crsreports.congress.gov/product/pdf/R/R47262)
5. https://home.treasury.gov/policy-issues/inflation-… – The U.S. Department of
Treasuy’s site for IRA-related guidance.
