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cosmoray Cosmoray Construction	Posted - 2008.12.18 17:46:00 - [1] I thought I might leave a little nugget of information for some of the newer players here. If you want to invest or run a business, lets have a look at 2 new business opportunities that are both less than 2 days old on this forum: 1. Atima Industries Aima Industries This person is a relative unknown, but is asking for 20B ISK. That is a huge amount of trust for someone with no background reputation. But wait, the manager wasn't stupid and realised they would have a problem, so look at what they did: Wrote a good business plan? Yes Is that a profitable business area? yes Arranged an audit with most respected auditor?yes In advance? yes Answered questions quickly? yes Provided a mechanism to secure investors funds (locked down BPO's with respected auditor)? yes When people look at this offering, the downside is very limited, max 20% loss. Do you trust Kazuo (absolutely). result = Sold out quickly, with more wanting to reserve. 2. 1 Billions ISK Bond at 12% (by 720) 720 Bond Again an unknown wanting cash. Not even a large amount of cash, only 1 Billion, and paying a really good interest rate. What did 720 do. Wrote a good business plan? yes Is area profitable? Is the person good at their job, we don't know Would audit help confirm this? yes Did CEO arrange for an audit? NO Did CEO answer questions quickly? NO Did we gain further trust from answers? NO Do we have secure feeling our money is safe? NO Result = Unsuccessful launch (720 failed to raise the cash, and some reservation were withdrawn) What did we learn. It is not difficult to spot really good investments. It is more difficult to pick through the average or bad ones. If you want to invest, look at the 2 examples and ask yourself if you would invest in either. If you want to launch a business, how would you now go about it? Remember there is another harsh rule on these forums. It is very difficult (not impossible) to come back for a second launch if your first one was a failure!
Yelan Zhou Amarr PIE Inc.	Posted - 2008.12.18 18:01:00 - [2] Thank you War. War never changes.
Damien Jax Industrial Research College Ltd	Posted - 2008.12.18 20:46:00 - [3] Yes, eve-search doesn't lie. If you screw up your first time, chances are it'll be pointed out the next time. IPO's aren't something to be casually tossed into the forum and expected to sell themselves. You have to put work into the design and overcoming possible issues.
Rho'varo Minmatar Diversified Operational Services	Posted - 2008.12.18 21:31:00 - [4] Originally by: cosmoray Atima Industries Arranged an audit with most respected auditor? Yes In advance? Yes Answered questions quickly? Yes Provided a mechanism to secure investors funds (locked down BPOs with respected auditor)? Yes These factors are helpful, but I don't think the basic fact of an audit or the basic fact of partial security were sufficient here. Audit Here I think the utility of Kazuo Ishiguro's audit was that it looked credible that the player's whole portfolio of accounts was reviewed. I don't think an audit that had covered just a possible "disposable trade alt" would have had the same favourable effect. A "disposable trade alt" could have a sufficiently successful trading history to convince an auditor that he or she can run the business, and it is relatively easy for an established player to create a "disposable trade alt" with no ties to his or her "main(s)". Here it seems meaningful that the player's "main(s)" (with 60+ million SP) may be disclosed if a scam is attempted. 80% Secured The complement of 80%-secured is, of course, 20%-unsecured. If a "disposable trade alt" used a similar 80%-secured mechanism for a 20 billion ISK venture and did a runner with just the 20%, he or she would net 4 billion ISK and the third party would be left holding the bag with 16 billion ISK in assets. That's a score four times what that other un-audited, un-secured venture would have netted (if it were a scam), which might be enough to justify the extra work for the scammer. Rapid Responses I think "within 24 h" is quick enough: I'm looking for someone who will run their business well, not necessarily someone who babysits their business 24/7.
Damien Jax Industrial Research College Ltd	Posted - 2008.12.19 16:39:00 - [5] Rho, Even if Atima were to scam us for the 20% and take the 4b and leave there's still plenty leftover to salvage. Take AATP for example, Kazuo could hold a vote and either say liquidate teh 80% and return it, or hand it over to someone trusted enough to make the 80% work until 100% is returned. That's what happened with AATP essentially, Ray turned that sinking ship around to provide billions of dividends. So, locking down 80% does indeed have a risk mitigating effect in that the most you'll lose is 20% and you still have the opportunity to make it 100% or more if need be. Rather than have nothing locked down and lose 100%.
flakeys Tier 3 Technologies Inc Lazy is our middle name	Posted - 2008.12.19 16:45:00 - [6] Originally by: Rho'varo 80% Secured The complement of 80%-secured is, of course, 20%-unsecured. If a "disposable trade alt" used a similar 80%-secured mechanism for a 20 billion ISK venture and did a runner with just the 20%, he or she would net 4 billion ISK and the third party would be left holding the bag with 16 billion ISK in assets. True but an 80% security is for a lot of people , myself included , enough to have a verry low risk of loosing a lot of isk.I think most IPO offers have a lot less security and some even have zero. It's allways about risk vs reward and with an 80% security i'd say it is worth the risk and on top of that an audit of a known MD person is more then enough to see the risk factor verry low. I do however see your point but unfortunatly this mostly is about as good as it get's regarding IPO offers.
Bad Bobby Ugly Toys	Posted - 2008.12.19 17:00:00 - [7] A good post Cosmo. This is the kind of thing I want to see more of in this forum. I'd be quite interested to see you do a similar brief analysis of other IPOs, particularly those that have been running for a while. We don't get anywhere near enough of that. How about doing mine?
Rho'varo Minmatar Diversified Operational Services	Posted - 2008.12.19 18:42:00 - [8] Originally by: flakeys An 80% security is for a lot of people , myself included, enough to have a very low risk of loosing a lot of ISK. Agreed, no doubt! As an investor, I would feel safer investing in a venture that was 80% secured, rather than one that was 0% or 50% secured. However, my point was simply that if both of cosmoray's examples were scams (and I'm not saying that they are), the ambitious scammer might prefer the secured enterprise as well, since it gets him or her four times as much ISK.
cosmoray Cosmoray Construction	Posted - 2008.12.19 18:54:00 - [9] Another point I should have made: I think most investors like to invest in a "bricks and mortar business". Something that has tangible assets. These assets hold a fixed value, that can be liquidated to repay shareholders (even though in the event of a SCAM assets get stolen too). For a trader we are asked in blind faith to take the word of someone that they are a good trader. This is why we like to audit traders, so they can prove that they are previously successful.
LaVista Vista	Posted - 2008.12.19 18:58:00 - [10] Good analysis. If you want to look at a past example of something very much like this, please look up back from 2006 when I launched CAP4U and Wylker launched PCSI. I think that's an interesting case study.

Atima Minmatar House of Marbles	Posted - 2008.12.19 19:04:00 - [11] However i would also like to point out that the 20% unsecured is making more than the 80% secured. Double if not more according to my previous experience. This means there is more risk of an IPO failing as the secured methods often result in lower profits.
Chomin H'ak Integrated Takeovers	Posted - 2008.12.19 19:09:00 - [12] Originally by: Bad Bobby A good post Cosmo. This is the kind of thing I want to see more of in this forum. I'd be quite interested to see you do a similar brief analysis of other IPOs, particularly those that have been running for a while. We don't get anywhere near enough of that. QFT. Well done. Good post. Originally by: Frenden Dax My heart hopes that people aren't that stupid, but my experiences thus far suggest otherwise.
Block Ukx Block Ships and Ammunitions	Posted - 2008.12.19 19:10:00 - [13] Invest Wisely BSAC Mineral Market Manipulation (MinMa) Information Desk
Ray McCormack hirr	Posted - 2008.12.19 19:36:00 - [14] Originally by: Block Ukx Invest Wisely Heh, sure, the SEC is a good resource. But considering the last week, I'd be asking for my money back. Even the best succumb to scamming. This will happen to lolbank btw, the directors need to have provisions in place for it. [WTS] Tech II Component BPO Sets
cosmoray Cosmoray Construction	Posted - 2008.12.19 19:48:00 - [15] Originally by: Ray McCormack This will happen to lolbank btw, the directors need to have provisions in place for it. That made my afternoon!!
SiJira	Posted - 2008.12.19 19:59:00 - [16] every time you invest you are either investing blindly or doing more work than you could do on your won with less risk Trashed sig, Shark was here
cosmoray Cosmoray Construction	Posted - 2008.12.19 20:15:00 - [17] Originally by: SiJira every time you invest you are either investing blindly or doing more work than you could do on your won with less risk So you have turned to attacking every investor and investment that appears. I am sure this has nothing to do with the fact you failed to launch your own business?
SiJira	Posted - 2008.12.19 20:29:00 - [18] Originally by: cosmoray Originally by: SiJira every time you invest you are either investing blindly or doing more work than you could do on your won with less risk So you have turned to attacking every investor and investment that appears. I am sure this has nothing to do with the fact you failed to launch your own business? cosmo do you have to troll your own thread? no one is getting attacked and i have received more isk than i asked for from others now - unless you like the direction this forum is going with nothing but trolls and ignorance would you like to argue against my statement or do you just feel like reducing your own character some more? Trashed sig, Shark was here
720	Posted - 2008.12.19 20:47:00 - [19] cosmoray, it is like you aren't even trying. Since you seem bent on attacking me, I suppose I'll have to respond. So lets list what you have been factually wrong about (and seemingly unwilling to correct) Originally by: cosmoray you have been posting on the forums for over 4 years. As other poster who bothered to do a slightly more than a cursory search found, that is not the case as this character is less than two month old demonstrating how absurd you next assumption is ("I am guessing this character is purchased"). Who pays for 2 month old characters? Talk about a bad investment! Originally by: cosmoray Result = Unsuccessful launch (720 failed to raise the cash... The Bond offering goes until Monday so it has yet to close, and if you checked recently, it looks more than likely to come to fruition. I like to think your negative and superior attitude has more to do with that than anything else honestly, so I should thank you. If you are going to judge this bond a 'failure' even before it has closed because all the shares have not be purchased as of yet, you may as well say the same about Aima Industries Bond (which as of this posting hasn't reached full capitilization). Originally by: cosmoray Did CEO answer questions quickly? NO I have no idea what you concept is about timeliness but I would hope that working and sleeping would not count against a persons posting speed. Because I did not respond until first thing the next day I am not timely? Some of us have responsibilities that do not exclusively include attacking people on teh internets and attempting to rule over a public forum with a mighty fist of angst. Ultimately investing in a Bond without an audit is no different than investing in any other risky Bond, for example 0.0 production. You may point to rates of returns in previous Bonds, but that does not in itself determine if any particulars of a specific bond. Historically the airlines industries of the US, if taken as an aggregate, have a net negative income. And yet people still invest in airlines. I disclosed in the Bond offering that I would not be doing an audit. I even stated that I knew that would put off many investors. I never tried to hide or in any way obscure that risk, even stating in the Risk section that my lack of audit was a risk to be considered by investors. Asking me to do an audit, when I made it clear it would not be happening is like asking someone to go into manufacturing Rigs because you think trading is to risky. It's not really your call, and if it prevents you from investing, so be it. You compared my Bond to a roulette table. Well if you were sitting at a table where the odds were 50-50 that you win or lose on given bet, but they pay off was three times the bet would you put money down? By your odd logic you would not. /rant
Ivar Strahm	Posted - 2008.12.19 21:58:00 - [20] I honestly think it's better to compare the "old" IPO process with the "way cool new" process that seems to be evolving. OLD WAY: 1. Someone posts an initial public offering with a business plan. 2. An audit may or may not happen. Probably will. 3. The idea is vetted by both new and old characters alike until all questions are satisfactorily answered. 4. The IPO succeeds or fails as a result of the above process. WAY COOL NEW WAY: 1. Someone posts an initial public offering. Perhaps with a business plan. 2. Hundreds of millions of ISK are thrown at the offer. Some before the offer is even completely posted up. 3. At least one person asks questions, highlights risks and explains how these risks could be at least partially mitigated. 4. Said observations are met with cries of "Why the hate?", "Don't be such a prima-donna!", "It's just pretend money!", etc. 5. The IPO succeeds because people are stupid.

SiJira	Posted - 2008.12.19 22:17:00 - [21] actually there used to be no audits Trashed sig, Shark was here
Ivar Strahm	Posted - 2008.12.19 22:26:00 - [22] Originally by: SiJira actually there used to be no audits As of a year ago they were happening. I guess we differ on the definition of "old".
SiJira	Posted - 2008.12.19 22:39:00 - [23] Originally by: Ivar Strahm Originally by: SiJira actually there used to be no audits As of a year ago they were happening. I guess we differ on the definition of "old". isk was getting thrown around more and has not been thrown around less since before audits were possible Trashed sig, Shark was here
cosmoray Cosmoray Construction	Posted - 2008.12.19 23:35:00 - [24] 720 its nothing personal, I am not attacking you. I am judging your offering. When I did an eve-search it showed a lot of posts. I did clarify that I might have screwed that up. The reason I want to see and audit is simple. You say your a good trader. How do I know that. If I am an investor, I want some assurance you can do what you say you can. An audit would show your previous trading history, and would prove if your successful, and an auditor could state that. When an audit is completed, the auditor and the CEO make an agreement. When my company was audited in June this year, my agreement with kazuo is that he will reveal the names on all my accounts to the forum if I scam. You can craft an agreement with an auditor not to reveal all your character or other things. If the scope of the audit was just to prove your trading record that could be agreed upon, in MD, in advance. If you have something genuine to hide then I am concerned enough that I probably wouldn't invest. Kazuo and the other auditors held in high regard do not want to trash their reputation divulging privelaged information. The reason I am calling this a failure is because I see people investing in you, for a gamble. They are not investing for business reasons. The investors don't care about the funds. I have watched over 100B ISK scammed through MD forum in last 18 months, and the vetting/questionning process is one that has morphed directly because of the scams. Now quite a few of the older players are leaving but they have left a good legacy of how IPO's are critiqued. Something to be proud of. MY concern is that MD may turn into an IPO scamfest, and when that happens this market will again dry up, with no one investing. Most IPO's don't die because people call SCAM. They mostly don't get the chance to try because they fail before launch because the business plan is poor or the attitude of the manager is poor. Investors want transparency. They want to feel confident in the manager and the plan. Keeping Politics Aside One of the consequences of some people moving over to other forums is that there is now a considerably lower amount of ISK available for players here to tap. The EBank & DBank boards are controlling 300-500B of investment capital, and the other players leaving probably account for over 500B. Most successfully launched IPO's major investors are the guys that are leaving. That is not a good thing.
Atima Minmatar House of Marbles	Posted - 2008.12.20 00:04:00 - [25] Originally by: 720 Edited by: 720 on 19/12/2008 21:25:50 Originally by: cosmoray Result = Unsuccessful launch (720 failed to raise the cash... The Bond offering goes until Monday so it has yet to close, and if you checked recently, it looks more than likely to come to fruition. I like to think your negative and superior attitude has more to do with that than anything else honestly, so I should thank you. If you are going to judge this bond a 'failure' even before it has closed because all the shares have not be purchased as of yet, you may as well say the same about Aima Industries Bond (which as of this posting hasn't reached full capitilization). /rant Edit-typos I fail to how my bond has been a failure? at the moment it is more than on track, infact 600mill (3%) profit has already been made. This is 75% of the dividend already covered and there is still 41 days untill it is due.
720	Posted - 2008.12.20 00:49:00 - [26] Originally by: Atima I fail to see how my IPO has been a failure? at the moment it is more than on track, infact 600mill (3%) profit has already been made. This is 75% of the dividend already covered and there is still 41 days untill it is due. It isn't, I was just implying that our two offerings, in one way, were not being compared fairly. I have no doubt you will complete the process and manage the IPO successfully. Sorry if I implied otherwise. cosmoray Holy crap. I wish you has posed that initially, it is so much more eloquent and succinct. As I've said before, I wholly agree with you and the need for audits generally, but I feel I'm in a unique place at this moment. I expect this all to resolve itself in the next few months so that, if I don't manage to raise the capital this round, I'll be able to submit to an audit at that time if I still need to raise capital.. In any case, thanks for your work to prevent scams and preserve the MD forum as a safe harbour for investors.
Kazzac Elentria	Posted - 2008.12.20 03:30:00 - [27] There are definitely risk assessments in any IPO. Audits go a long way towards assuaging some fears investors might have. Take a manufacturing IPO. Depending the scale, the OP may be able to get away without an audit and instead just post proof of relevant skills (Indy V, Adv Ind V, Cap V, etc..) But any operation other than that is going to require some verification anymore, period. Regardless of the size. Its become the defacto standard at this point. But investors need to remember that just because someone is audited and the auditor verifies the auditors claims does not mean a jack of hill beans. It could still fail, and it could still scam. That is why any audit should be absorbed as only part of the entire evaluation.
Bad Bobby Ugly Toys	Posted - 2008.12.20 06:54:00 - [28] Originally by: 720 As I've said before, I wholly agree with you and the need for audits generally, but I feel I'm in a unique place at this moment. I also believe in the need for audits, but for me they are only there to confirm as fact the statements made in the IPO. An audit will never make me invest, I will have decided to invest or not based on my assessment of the person proposing the IPO. It's the person that maters most of all in these things, audits, the plan, even the return are of far less importance to me. Also, I have never lost so much as a single isk to a scam in the long time I have been investing here and elsewhere. By the way, my IPO was never audited. Although I would hope the success of my launch was due to the reputation I have built and the quality of my IPO document, I fear it was more out of desperation for an investment vehicle in a time of drought... oh well.
abraheam Dirty Denizens	Posted - 2008.12.20 08:26:00 - [29] Good post my man. Very helpful, and attention to the details. I would not have named current running IPOs in my examples, but I guess in that instance someone had to be the goat, whether it was true or not. Originally by: cosmoray Keeping Politics Aside One of the consequences of some people moving over to other forums is that there is now a considerably lower amount of ISK available for players here to tap. The EBank & DBank boards are controlling 300-500B of investment capital, and the other players leaving probably account for over 500B. Most successfully launched IPO's major investors are the guys that are leaving. That is not a good thing. I would tend to disagree. If someone is new, and serious about building a concept into reality I would highly recommend joining a PVP alliance, and actually PVPing. This money(small-medium sized corp funds) has never necessarily even been on these forums. I have found that the fastest way to build trust with a willing audiance that has ISK is to "bleed with them on the battlefield", or in other words destroy and lose pixels with them. Many alliances, Corps, and other entities yearn for people with good ISK management skills, and a high commitment level. Once you prove yourself on the battle field in many cases you are in like Flynn. I look at PVP as a good time investment as it fun, and takes you to a level above and beyond a dry impersonal post on a forum. Not to mention you are targeting a specific audiance that starves for a good passive income while they do what they enjoy, and do best, PVP. Of course in many cases you will be dealing with people that you really do not want to screw over, so it can be an exhilarating, and very rewarding experiance if you are successful, as you will make friends that are good to have behind you for the rest of your time in eve. You want 20 guys willing to have you help manage their funds, then lead then on a successful ganking op through the HED pipe. I actually hope that people ignore that advice to be honest.
Bad Bobby Ugly Toys	Posted - 2008.12.20 11:07:00 - [30] I agree totally with abraheam on the points about PvP. This is exactly my experience and I continue to manage money for the PvP corps that my mains (yes, yes, Bobby is just an alt) live in. Trust is not an issue with my PvP mates, if they trust me to have their wing or be their FC in PvP then trusting me with their billions is an easy step to make.



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