There's a concept in our industry that the best way to ensure a developer performs well on a project is to require them to put their own money at risk. Having “skin in the game,” as many refer to it. The logic seems straightforward: if the developer has equity in the deal, they'll care more, pay closer attention, and be more accountable for the outcome. And for some, that's probably true.

But I've always looked at it differently. We operate in what is still a relatively small industry, and in a small industry, your reputation follows you everywhere. Every client you work with talks to other clients. Every project you deliver becomes a reference for the next one. And if you mess up a single job, the consequences aren't limited to that project. You're likely not getting work for five years. Maybe longer. In an industry where we might deliver one or two projects a year, that's not a risk any of us can afford to take, and it has nothing to do with whether our money is in the deal.

The accountability that comes from protecting your reputation is fundamentally different from the accountability that comes from protecting an equity investment. An equity investor can absorb a loss and move on to the next fund. For us, there is no next fund. There's only our reputation, and everything we've built over 25 years depends on it.

What Equity Actually Does and Doesn't Do

I want to be fair about this, because the equity argument isn't entirely wrong. There are developers out there, particularly large private equity funds, where the people you're working with today may not be there next week. In those situations, having financial risk in the deal can be a meaningful way to keep the organization focused and aligned. When the individuals involved don't have long-term relationships with the client, the money becomes the mechanism for accountability.

But that's not how we operate. The partners at Edgemoor have been here for 15+ years, on average. I've been here for 25 years and I've never updated my resume or thought about leaving. When a client works with us, they're working with the same people from pursuit through delivery, and in many cases through years of operations after that. One of our partners, Jamie, started working with the city's project lead on the Long Beach Civic Center in 2009, and she can still call him today for anything she may need help with. That kind of continuity is its own form of accountability, and in my experience, it's far more powerful than any check.

What We Offer Instead

When we don't have equity in a deal, it doesn't mean we have nothing at risk. On projects where we provide long-term operations and maintenance, we guarantee what's called a facility condition index, meaning the building has to be maintained to a specific standard of quality for the life of the agreement. On some of our projects, that commitment extends for decades. If the building doesn't perform, our payments are reduced. That's real accountability, tied directly to outcomes, sustained over a timeline that goes far beyond what any equity investment would cover.

But even beyond the contractual mechanisms, what we put at risk on every project is something that no contract can replicate: our name. Every project we deliver is a reflection of who we are. We don't have 300 projects to choose from when a prospective client asks for references. We may deliver one or two a year, and every single one matters. That reality shapes how we approach the work in a way that I think is fundamentally different from a developer who can point to a large portfolio and cherry-pick the ones that went well.

Why This Matters for Our Clients

The practical implication for our clients is straightforward. When equity is not mandated, we can help them find more cost-effective ways to finance their projects while still delivering everything they need from a risk transfer and performance standpoint. Nine times out of ten, we can provide the same level of accountability, goal alignment, and long-term commitment that an equity-backed developer promises, and we can do it at a lower cost to the client.

That's not a theoretical argument. It's what we've done across our portfolio for 25 years. Every project delivered on time and on budget. 100% client satisfaction. Relationships that have lasted decades and produced repeat work, not because we had money in the deal, but because we did what we said we were going to do, every single time.

The Real Currency

At the end of the day, this is a people business. Clients hire teams, not capital structures. And the teams that perform best over time are the ones where the people involved have the most to lose if things go wrong, not financially, but professionally and personally.

I've spent 25 years building something at Edgemoor that I'm proud of, alongside partners and colleagues who feel the same way. That pride, and the responsibility that comes with it, drives how we show up on every project far more than any equity stake ever could. We say what we're going to do, and then we do it. We don't play games, and we don't mince words. That's just who we are as people, and after 25 years, our clients know it.

Your reputation is the one thing in this business you can never get back. Ours was built one project, one client, and one kept promise at a time. We wouldn't trade it for anything.