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Souris Blanche
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Posted - 2011.08.19 08:00:00 -
[1]
Edited by: Souris Blanche on 19/08/2011 08:16:45 Edited by: Souris Blanche on 19/08/2011 08:13:14 Edited by: Souris Blanche on 19/08/2011 08:06:18 The Baker Street Irregulars [221.B] Bond Plan
ò Chapter 1 - Summary of The Baker Street Irregulars [221.b] ò Chapter 2 - Background business ò Chapter 3 û Summary of bond details ò Chapter 4 - Corporate Governance ò Chapter 5 - The Business Plan ò Chapter 6 - Statement of Assets ò Chapter 7 - Full Disclosure of Risks ò Chapter 8 - Exit Strategy ò Chapter 9 - FAQ
Chapter 1 - Summary of The Baker Street Irregulars [221.B]
The Baker Street Irregulars [221.B] is a one person corporation that has, and will, produce various Tech 2 items. The corporation holds several Tech 1 BPOs that I mainly use to produce T1 BPCs, invent T2 BPCs from the stockpile of T1 BPCs, and finally produce the T2 items themselves. Of all the various T1 BPOs I own, I generaly use about 20 of one type of BPO to produce a single type of T2 item that offers great profit margins and has a very large demand.
Chapter 2 - Background on origins/idea/current business
When I began, I ran the numbers in Excel to see the profitability of producing Tech 2 items and found a few items that produced nearly 60% profit margin. I started producing T2 items and made a very respectable profit each month. I started with a single toon doing 5 copy jobs, 5 invention jobs, and 10 manufacturing jobs as continuously as possible. After a while, I added and trained a second toon to do nothing but copy jobs so my main toon could do nothing but invention and manufacturing work.
The type of T2 item I was producing each month has not only been stable, but has actually shown a steady increase in price over the past year, while the cost of materials (specifically datacores) has fallen over time. These changes in the cost of materials have allowed me to make some changes to my production. I no longer produce the T1 items, R.A.M., or other products needed, but simply purchase them from the market. While purchasing the T1, R.A.M., and other items from the market costs a bit more than buying base raw materials and producing every stage from beginning to end, the drop in datacore prices and the increased selling price of the finished T2 items allowed me to increase profit margins significantly.
Additionally, I no longer sell via sell orders, but simply sell to existing buy orders. I buy the materials I need for 2-4 weeks of production, haul to the production location (entire trip is in highsec), produce for 2-4 weeks, haul the T2 items to Jita, and insta-sell them to an existing buy order. Then, instead of waiting in Jita while I babysit orders for 1-2 days, I am able to immediately purchase another batch of materials and repeat the process with very little downtime.
Until a few months ago, I produced more than enough profit each month to buy a PLEX each month while still tucking away a fair amount of ISK for a rainy day. Since I already owned the POS towers, enough POS arrays, and enough T1 BPOs to keep my two toons constantly producing T2 items, there was no real need to invest additional ISK each month. The only money I had to invest each month was the money for production materials. About 4 months ago, I took a break from Tech 2 production, and invested a large portion of my savings into a 3.1 billion ISK faction-fitted Tengu to use for missioning (I know it is a lot of money for a Tengu... but it was extremely shiny). Mission Running is very, very profitable, but it takes a great deal more time per day than I used to spend producing T2. I want to return to T2 production, but the purchase of the Tengu sucked up enough ISK that I am in need of a investor to fund the purchase of one (1) month of materials. After that one month, I will be able to operate on my own by using the profits left over after paying back the investor(s) from this bond.
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Souris Blanche
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Posted - 2011.08.19 08:02:00 -
[2]
Edited by: Souris Blanche on 19/08/2011 08:08:29 Chapter 3 - Summary of bond details:
Total amount to borrow: 2,500,000,000 ISK (2.5 Billion ISK) Interest Rate: 10% Total Amount of Interest Paid to Investors: 250,000,000 ISK (250 Million ISK) Duration of bond: 30 Days Minimum Investment: 100,000,000 ISK (100 Million ISK) Maximum Investment: No Maximum Investment Increments: 100,000,000 ISK (100 Million ISK) Estimated Value of Collateral: 2.62-2.92 Billion ISK (variance is value of the rigs/Subs)
Chapter 4 - Corporate Governance
Since The Baker Street Irregulars is a one-man corp, there are no additional members that may pose risks such as theft or other shenanigans. There are also no members to ôgovernö.
Chapter 5 - The Business Plan
I will be using the money from this bond as follows: 1.)Spend approximately 250 Million ISK to purchase POS Fuel. 2.)Spend approximately 800 Million ISK to purchase 4350 Datacores (2175 of each type of Datacore). 3.)Spend approximately 1.45 Billion ISK to purchase enough materials to build 10,000 units of the T2 item.
I will be purchasing all of the material from Jita, Rens, or Amarr depending on which hub has the lowest prices.
The materials will allow me to constantly build the T2 item for approximately 26 days, which gives me a 5 day grace period to sell the T2 items and get payments out to all the investors at the end of the 30 days. During the first 26 days, I will build a total of 10,000 units, which will result in enough profit to pay the investors the principal plus interest, and still have enough ISK left that I can continue to manufacture on my own.
At the end of the 26 days, the only inventory I will still have may be a small amount of Datacores due to the fact that the invention success rate has some randomness to it. The 2175 quantity of each datacore is based on a 46% invention job success rate, which is the average success rate based on both my skills and past experience, plus a few extra datacores to cover the possibility of a slightly lower than average success rate. With the exception of the datacores, I will be purchasing exactly enough materials to be precisely 10,000 units. All T2 BPCs will have identical ME/PE rating there is no variance in the amounts I need to build 10K units of this Tech 2 item.
Chapter 6 - Statement of Assets
Currently, my assets include: 1 Caldari Control Tower* 3 Mobile Lab Arrays* 3 Advanced Mobile Lab Arrays* 20 T1 BPOs and 450 Max-run T1 BPCs to be used for this project* Various T1 BPOs and BPCs not used for this project** 1 Fitted and rigged Orca (3x cargo rigs)* 1 Tengu with faction modules and rigs (2 T2 rigs, 1 T1 rig)*** Interbus Shuttle** Various other ships and modules not worth any substantial amount of ISK**
* Used for this project ** Not used for this project *** Will be using this as collateral
Chapter 7 - Full Disclosure of Risks
Any investment opportunity, in Eve or in real life, come with a certain amount of risk. As a way to lessen risk for people investing in this bond, I will be using the Tengu I own as collateral. I also do realize that Tengus are not the greatest type of item to use as collateral, which is why I am putting up the Tengu with T2 rigs and faction modules worth an estimated total of 2.62-2.92 Billion ISK based on current market prices and existing contract ôWant to Buyö orders. Should I get hit by a bus or suffer some other tragedy, the third-party that will be holding the collateral should be able to not only pay back the principal to the investors, but will most likely even be able to pay them the interest owed to them. |
Jehek Azen
Minmatar Cult of the Spinning Meat
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Posted - 2011.08.19 08:02:00 -
[3]
Edited by: Jehek Azen on 19/08/2011 08:02:38 1st
Is this really legit?
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Souris Blanche
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Posted - 2011.08.19 08:04:00 -
[4]
Edited by: Souris Blanche on 19/08/2011 08:09:25 Chapter 8 - Exit Strategy
I have numerous months of experience building this exact type of T2 item so I have absolute confidence that this project will be a success. In event of a catastrophic disaster resulting in failure, or any failure on my part to send out payments to investors on time, I authorize the Third-party to liquidate the collateral and pay any ISK owed to investors.
Chapter 9 - FAQ
Q: How do I know this isn't a scam? A: There is no way for me to prove this isnÆt a scam, but I hope I can allay investorÆs worries by reminding you that the collateral is worth approximately 125% of the total amount being borrowed. In case of a scam or default on the loan, not only should the collateral allow for repayment of the amount borrowed, but also payment of the interest owed to the investors.
Q: How do you know you'll be successful? A: As I stated above, I have numerous months building not just Tech 2 products, but experience building this specific product. In all the months that I spent building T2 items, I have always turned a profit. I take great care in putting together a detailed spreadsheet so I know how much profit I will make even before I purchase the first unit of Morphite.
Q: Why are you doing this? A: I am doing this so, after this month, I will be able to use the profits to restart producing T2 items on a continuous basis. My portion of the profits from this bond will be enough to purchase about a two (2) week supply of materials to continue producing T2 items in the future month(s) without the need for additional bonds.
Q: Do you intend to have an audit done at some point? A: Although I do not have any plans to have a have an audit done for this bond, I have no objection to having one done, as long it is not at my expense, if investors insist.
Q: What if someone War Decs The Baker Street Irregulars? A: In the event of a war dec, my backup plan is to simply tear down the POS and change to using in-station services for invention and production, and using an out-of-corp toon on my account to haul. Using in-station services will require more time, but I actually only need to produce and sell about 7400 of the 10,000 units within the 30 day period in order to be able to pay back investors the principal plus the full amount of the interest owed to them.
Q: Why not just sell the Tengu and use that money instead of borrowing ISK? A: I donÆt want to permanently get rid of the Tengu. The Tengu is great fun to fly, performs wonderfully, and owning one has always been a goal of mine since CCP introduced them in-game. The amount of ISK lost by having to pay interest on this bond is less than the amount of ISK I would lose if I was to sell the Tengu and then repurchase a new one in the future
Q: Can an investor request an early withdrawal of their investment? A: Once the bond is started, it will run for 30 days before any ISK will be paid out to investors. When it starts, I will use 100% of the investment money within the first few days to purchase the POS fuel, datacores, and production materials. All of the invested money will be tied up until I get to the point that all 10,000 units are finished being produced and I take them to a market to sell them. Therefore, there will be no money available to payback investors prior to the end of the 30 days; hence I will not honor any early withdrawal requests.
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Souris Blanche
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Posted - 2011.08.19 08:10:00 -
[5]
Edited by: Souris Blanche on 19/08/2011 08:12:34 Updates: Any offers from investors will be entertained once I secure a third party for the collateral.
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Tom Hagen
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Posted - 2011.08.19 08:22:00 -
[6]
If you contract the Collateral to me I will take the entire bond..
Unsure when I can logg on but it should be within 8 hours probably less.. |
Levija Saplina
Supremacy Inc. Not Found.
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Posted - 2011.08.19 08:23:00 -
[7]
I would be glad to act as third party to hold your collateral.
And I am interested in investing in this at the full amount of the bond. |
Souris Blanche
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Posted - 2011.08.19 08:26:00 -
[8]
I appreciate the offers, Tom and Lev, and I mean you no disrespect when I say that I don't really know either of you and would prefer to use someone that I know both the investors and myself would be comfortable trusting. Talked to Chribba earlier and sent him a mail with details. I am awaiting his response before I make any decisions about who will hold the collateral. |
Tom Hagen
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Posted - 2011.08.19 08:30:00 -
[9]
What is the world comming to when the borrowers start to suspect the lenders for scamming??!?! J/K
No worries mate, just let us know when you have reached a decision..
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Levija Saplina
Supremacy Inc. Not Found.
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Posted - 2011.08.19 08:31:00 -
[10]
All right, if you can find your own third party with who you feel comfortable, maybe Tom and I can split this bond ?
Hey Tom ? COME ONNNNNNNNNNNNN !
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Tom Hagen
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Posted - 2011.08.19 08:44:00 -
[11]
Works for me..
Everything is so much more fun if you can split it, look at worms.. ;-)
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Xanadu Alexis
Minmatar First Celestial Investment Group
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Posted - 2011.08.19 09:21:00 -
[12]
I'm interested in putting down 500M for your 30day project, provided you use a trustworthy 3rd party for the collateral. ( Chribba will do fine :) )
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Magnu Stormhawk
Stormhawk Enterprises
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Posted - 2011.08.19 09:22:00 -
[13]
If Chribba agrees to hold the collateral and handle liquidation in the event default, I will offer to take the whole amount at 7.5%
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Levija Saplina
Supremacy Inc. Not Found.
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Posted - 2011.08.19 09:25:00 -
[14]
Originally by: Magnu Stormhawk If Chribba agrees to hold the collateral and handle liquidation in the event default, I will offer to take the whole amount at 7.5%
Now that's a low blow.
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Magnu Stormhawk
Stormhawk Enterprises
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Posted - 2011.08.19 09:39:00 -
[15]
Originally by: Levija Saplina
Originally by: Magnu Stormhawk If Chribba agrees to hold the collateral and handle liquidation in the event default, I will offer to take the whole amount at 7.5%
Now that's a low blow.
That's business.
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Paul L Atreides
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Posted - 2011.08.19 10:04:00 -
[16]
If Chribba or other trusted guy around agrees to hold the collateral and handle liquidation in the event default, I will offer to take the whole amount at 7%
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Magnu Stormhawk
Stormhawk Enterprises
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Posted - 2011.08.19 10:34:00 -
[17]
I knew it would head in this direction as soon as I posted.
6%
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RAW23
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Posted - 2011.08.19 10:41:00 -
[18]
If I, or Chribba, hold the collateral I'll take the whole thing at 5%.
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Magnu Stormhawk
Stormhawk Enterprises
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Posted - 2011.08.19 10:46:00 -
[19]
Originally by: RAW23 If I, or Chribba, hold the collateral I'll take the whole thing at 5%.
You know, I was just thinking i'll head back here and mention that i'd be happy if RAW23 holds the collateral to give him another option, and then i realised as soon as you knew about it you'd probably just take it yourself :P
Hey ho. Thats the deal the OP should have looked for anyway :)
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Levija Saplina
Supremacy Inc. Not Found.
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Posted - 2011.08.19 10:46:00 -
[20]
And this is how we reach ridiculous ROIs on col/uncol bonds.
I always thought that uncolaterized bonds should be at 20%+ and colaterized should be at 10% minimum.
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Magnu Stormhawk
Stormhawk Enterprises
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Posted - 2011.08.19 10:49:00 -
[21]
Originally by: Levija Saplina And this is how we reach ridiculous ROIs on col/uncol bonds.
I always thought that uncolaterized bonds should be at 20%+ and colaterized should be at 10% minimum.
Welcome to supply and demand.
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Jerry Pepridge
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Posted - 2011.08.19 11:20:00 -
[22]
Originally by: Souris Blanche Talked to Chribba earlier and sent him a mail with details. I am awaiting his response before I make any decisions about who will hold the collateral.
right here. it became clear that you are interested in bond roleplay & not real maths.
You do realize that if you give the collateral directly to tom/anyone here begging that you would be better off as you don't have to pay 3rd party fees.
its collateralized so i can;t really troll it (Step 6). just think about it, more isk for you if you let the person giving you the isk hold the stuff. _________________________________________________
7 Easy steps |
RAW23
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Posted - 2011.08.19 11:30:00 -
[23]
Originally by: Magnu Stormhawk
Originally by: RAW23 If I, or Chribba, hold the collateral I'll take the whole thing at 5%.
You know, I was just thinking i'll head back here and mention that i'd be happy if RAW23 holds the collateral to give him another option, and then i realised as soon as you knew about it you'd probably just take it yourself :P
Hey ho. Thats the deal the OP should have looked for anyway :)
Now I feel bad
If it was bigger I would offer to split it. I'd also be happy to hold the collateral if the rate drops below my personal preferred level.
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Levija Saplina
Supremacy Inc. Not Found.
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Posted - 2011.08.19 11:33:00 -
[24]
Originally by: Jerry Pepridge
Originally by: Souris Blanche Talked to Chribba earlier and sent him a mail with details. I am awaiting his response before I make any decisions about who will hold the collateral.
right here. it became clear that you are interested in bond roleplay & not real maths.
You do realize that if you give the collateral directly to tom/anyone here begging that you would be better off as you don't have to pay 3rd party fees.
its collateralized so i can;t really troll it (Step 6). just think about it, more isk for you if you let the person giving you the isk hold the stuff.
I can only agree with that.
If someone offers to cover the full bond money and hold onto the collateral, I don't see why anyone would go and look for another third party.
It's more like rep grinding than anything else really.
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RAW23
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Posted - 2011.08.19 11:37:00 -
[25]
Originally by: Levija Saplina
Originally by: Jerry Pepridge
Originally by: Souris Blanche Talked to Chribba earlier and sent him a mail with details. I am awaiting his response before I make any decisions about who will hold the collateral.
right here. it became clear that you are interested in bond roleplay & not real maths.
You do realize that if you give the collateral directly to tom/anyone here begging that you would be better off as you don't have to pay 3rd party fees.
its collateralized so i can;t really troll it (Step 6). just think about it, more isk for you if you let the person giving you the isk hold the stuff.
I can only agree with that.
If someone offers to cover the full bond money and hold onto the collateral, I don't see why anyone would go and look for another third party.
It's more like rep grinding than anything else really.
It depends on how the collateral is valued. If 100% is a very conservative valuation and one could actually expect to get, say, 125% by taking the time to sell things on sell orders rather than dumping to buys then you will be trusting someone you don't know with c. 700mil isk. It might be worth paying a small fee to avoid that. It's also worth bearing in mind that some third parties will provide their services for free in the case of small bonds like this.
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Tom Hagen
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Posted - 2011.08.19 12:57:00 -
[26]
If you could accept raw23 as a trustworthy person and are happy with the 5% interest. Thats the best option for you.
At a 10% interest i was willing to risk the possibility that the collateral needed some time before it got sold.
Dont feel bad raw23, you have earned your place as a thrustworthy person and as soon as i saw magnus post i realised the interest would drop, and now it is just another regular loan.
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flakeys
The Great cornholio's Paper Tiger Coalition
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Posted - 2011.08.19 13:05:00 -
[27]
Must resist otherwise RAW calls me more then selfish ... biting tongue of here... arghhh
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Magnu Stormhawk
Stormhawk Enterprises
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Posted - 2011.08.19 13:38:00 -
[28]
Originally by: RAW23
Originally by: Magnu Stormhawk
Originally by: RAW23 If I, or Chribba, hold the collateral I'll take the whole thing at 5%.
You know, I was just thinking i'll head back here and mention that i'd be happy if RAW23 holds the collateral to give him another option, and then i realised as soon as you knew about it you'd probably just take it yourself :P
Hey ho. Thats the deal the OP should have looked for anyway :)
Now I feel bad
If it was bigger I would offer to split it. I'd also be happy to hold the collateral if the rate drops below my personal preferred level.
No worries, wasn't meant that way :)
Like I said, it's business, and I chose to come in at 6%. I wasn't going to offer handling the collateral myself as I am too lazy. Your deal is the best one for the OP.
OP, you should note the points made in the above posts re 3rd parties. You might as well minimise your cost by the lender holding, at least in this instance if it is going to be Raw. If you don't know him I'm sure a quick search will provide you with an idea of his standing in MD.
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OllieNorth
Gallente R-K Industries
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Posted - 2011.08.19 15:02:00 -
[29]
When did Jerry turn into the voice of reason here in MD?
I agree though, cutting out the third party always makes sense if you can swing it. I don't see any problem with the ROI, because I think all of us see this as a rather strong offering. What bothers me are incredibly risky uncollateralized loans being put out there at 5%, those should definitely be around 20% due to the risk.
We need more realistic bond proposals.
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Souris Blanche
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Posted - 2011.08.19 15:34:00 -
[30]
Originally by: RAW23
It depends on how the collateral is valued. If 100% is a very conservative valuation and one could actually expect to get, say, 125% by taking the time to sell things on sell orders rather than dumping to buys then you will be trusting someone you don't know with c. 700mil isk. It might be worth paying a small fee to avoid that. It's also worth bearing in mind that some third parties will provide their services for free in the case of small bonds like this.
My desire for a third-party that is not the one investing the money does not have to do with any kind of rep grind. The reason is simply because the 2.62-2.92 billion ISK valuation of the collateral is conservative. That amount was calculated, as stated in my original posts, by using the current market buy order prices (for t2 and meta 4 items) and the current Want to Buy contract prices (for faction items). If someone took their time and used sell orders, the total value (using market sell price and WTS contracts) could be as high as 3.2 Billion ISK.
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