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Vaerah Vahrokha Minmatar Vahrokh Consulting	Posted - 2010.08.22 05:23:00 - [91] Originally by: Machete Visor Originally by: Jovan Geldon Just a quick question; if the term of the STOF is "perpetual", then are those of us who bought debt able to claim it back at any time? Not that I'm planning to, I was just wondering. Also, bump Hi Jovan - Perpetual is how is sounds... no maturity date. Also no puts, so i guess the polite answer is sorry. But it is not that bad and here is why: 1 - You can sell the loan. As the person above me just posted, there will be people interested, especially once I have a history of paying on time. Shouldnt be a problem to find someone to step in. 2 - At some point I'll get bored with the current structure and want to restructure again and will pay off everyone before doing it. In other words, it can't truly go on forever. I sincerely hope you'll stick with this initiative, it fits neatly with my long term agenda! - Auditing & consulting When looking for investors, please read http://tinyurl.com/n5ys4h + http://tinyurl.com/lrg4oz
Paramys Minmatar GOTTEG Mining and Industrial Union	Posted - 2010.08.22 06:03:00 - [92] 2nd div. received.
Acoada	Posted - 2010.08.22 06:04:00 - [93] 1nd isk recive 2nd isk recive
Machete Visor	Posted - 2010.08.28 21:28:00 - [94] 3rd interest payment made. Update on the funds... All funds are reaching the 1 month mark next week. Fund 1 is performing as expected and will pay a dividend this month. Not sure the amount yet Fund 2 volume is under what I expected and therefore profits are lower. But there are profits and I'm still thinking up ways to increase volumes. A dividend will be paid, unsure of amount. Fund 3 is a 1 month fund and therefore will wrap up next week and distribute all earnings. From what I can see, all debt holders are safe on their investment (i.e., no losses of principal). I am uncertain if there will be any profit for equity investors... greatly depends on prices over the next week as stock liquidates. Just to be clear, I am unsure what profit equity investors will have - likely will receive the majority of their investment. If prices rise, will receive a profit... if they fall, could be a little ugly.
Trebor Whettam	Posted - 2010.08.29 03:39:00 - [95] Originally by: Machete Visor 3rd interest payment made. Update on the funds... All funds are reaching the 1 month mark next week. Fund 1 is performing as expected and will pay a dividend this month. Not sure the amount yet Fund 2 volume is under what I expected and therefore profits are lower. But there are profits and I'm still thinking up ways to increase volumes. A dividend will be paid, unsure of amount. Fund 3 is a 1 month fund and therefore will wrap up next week and distribute all earnings. From what I can see, all debt holders are safe on their investment (i.e., no losses of principal). I am uncertain if there will be any profit for equity investors... greatly depends on prices over the next week as stock liquidates. Just to be clear, I am unsure what profit equity investors will have - likely will receive the majority of their investment. If prices rise, will receive a profit... if they fall, could be a little ugly. A firesale is the kind of thing that will kill a venture like Fund #3. If prices fall during the sell-off, and you believe it to be a temporary depression rather than a long-term trend, I'd be happy to receive the equity payout a bit late. I don't know how the other equity holders feel about it, of course.
Machete Visor	Posted - 2010.08.29 17:22:00 - [96] Originally by: Trebor Whettam Originally by: Machete Visor 3rd interest payment made. Update on the funds... All funds are reaching the 1 month mark next week. Fund 1 is performing as expected and will pay a dividend this month. Not sure the amount yet Fund 2 volume is under what I expected and therefore profits are lower. But there are profits and I'm still thinking up ways to increase volumes. A dividend will be paid, unsure of amount. Fund 3 is a 1 month fund and therefore will wrap up next week and distribute all earnings. From what I can see, all debt holders are safe on their investment (i.e., no losses of principal). I am uncertain if there will be any profit for equity investors... greatly depends on prices over the next week as stock liquidates. Just to be clear, I am unsure what profit equity investors will have - likely will receive the majority of their investment. If prices rise, will receive a profit... if they fall, could be a little ugly. A firesale is the kind of thing that will kill a venture like Fund #3. If prices fall during the sell-off, and you believe it to be a temporary depression rather than a long-term trend, I'd be happy to receive the equity payout a bit late. I don't know how the other equity holders feel about it, of course. good news, there is a way to find out. I'll add a vote to the corp and we will see where it lands. I think we have to [ay back bond holders... which shouldn't be too big a problem.
Trebor Whettam	Posted - 2010.09.02 21:36:00 - [97] Received dividend for Fund #1. A very healthy one. :)
Taram Caldar Royal Black Watch Highlanders Warped Aggression	Posted - 2010.09.02 23:27:00 - [98] Edited by: Taram Caldar on 02/09/2010 23:28:10 Originally by: Machete Visor Originally by: Trebor Whettam Originally by: Machete Visor 3rd interest payment made. Update on the funds... All funds are reaching the 1 month mark next week. Fund 1 is performing as expected and will pay a dividend this month. Not sure the amount yet Fund 2 volume is under what I expected and therefore profits are lower. But there are profits and I'm still thinking up ways to increase volumes. A dividend will be paid, unsure of amount. Fund 3 is a 1 month fund and therefore will wrap up next week and distribute all earnings. From what I can see, all debt holders are safe on their investment (i.e., no losses of principal). I am uncertain if there will be any profit for equity investors... greatly depends on prices over the next week as stock liquidates. Just to be clear, I am unsure what profit equity investors will have - likely will receive the majority of their investment. If prices rise, will receive a profit... if they fall, could be a little ugly. A firesale is the kind of thing that will kill a venture like Fund #3. If prices fall during the sell-off, and you believe it to be a temporary depression rather than a long-term trend, I'd be happy to receive the equity payout a bit late. I don't know how the other equity holders feel about it, of course. good news, there is a way to find out. I'll add a vote to the corp and we will see where it lands. I think we have to [ay back bond holders... which shouldn't be too big a problem. As a debt holder I'd normally be fine with waiting as long as I continued to accrue interest. However I have a couple big purchases waiting for my principal and interest payments. So in this case yeah, I'd rather get paid out. Market Alerts Mailing List
Machete Visor	Posted - 2010.09.03 00:31:00 - [99] fund 1 - paid 4th 50M interest payment. paid 210M asset management fee (3% X 7B). Paid 2,445,000,000 dividend. Little less than I had hoped for, but still good on 3,000,000,000 in equity. Paid early because of some RL stuff going on that may tie me up for the weekend. Also going to pay out Fund2 dividend when I get a chance (had estimated it at around 25%, but not exactly sure).. pls be patient on that. Almost have 1B ISK in Fund3 to pay out debt holders. Need to check the vote to see if it will be liquidated this week for equity holders.
Machete Visor	Posted - 2010.09.03 16:08:00 - [100] Originally by: Machete Visor fund 1 - paid 4th 50M interest payment. paid 210M asset management fee (3% X 7B). Paid 2,445,000,000 dividend. Little less than I had hoped for, but still good on 3,000,000,000 in equity. Paid early because of some RL stuff going on that may tie me up for the weekend. Also going to pay out Fund2 dividend when I get a chance (had estimated it at around 25%, but not exactly sure).. pls be patient on that. Almost have 1B ISK in Fund3 to pay out debt holders. Need to check the vote to see if it will be liquidated this week for equity holders. Paid interest on Fund2, asset management fee of 35M (10% of profit) and dividend of 350M (17.5%).
Machete Visor	Posted - 2010.09.04 00:38:00 - [101] paid interest on fund 3 and returned 100% of the loan. The equity is being extended by 1 week due to unanimous vote by the shareholders.
Taram Caldar Royal Black Watch Highlanders Warped Aggression	Posted - 2010.09.04 01:07:00 - [102] Confirming receipt of 600mil principal and 4 payments of 15mil (total 60mil) interest over the course of the loan. Thank you! Market Alerts Mailing List
Trebor Whettam	Posted - 2010.09.04 02:54:00 - [103] Confirming receipt of Fund #2 dividend.
Machete Visor	Posted - 2010.09.09 01:10:00 - [104] on fund 3, paid a dividend of 320M ISK. This is not a full liquidation. There is somewhere around 400-700M more in items sitting on the market. But, I figured since the ISK is just sitting in my wallet and I'm not using it, why not return to equity holders?
Machete Visor	Posted - 2010.09.11 15:54:00 - [105] interest paid on the 1st and 2nd fund. 3rd fund debt redeemed last week. 3rd fund dividend coming, with a final vote to shareholders with what to do with some of the depressed items that are still remaining.
Machete Visor	Posted - 2010.09.14 03:56:00 - [106] liquidated fund3. final return to equity holders was negative 4.8%. There was a wide variety of returns. Most losers than winners (in # and in total ISK). Got slammed on ferrogel. But, bond holders paid in full, along with interest. I need to rethink the strategy before relaunching fund 3.
Trebor Whettam	Posted - 2010.09.14 05:43:00 - [107] Edited by: Trebor Whettam on 14/09/2010 05:44:50 Originally by: Machete Visor liquidated fund3. final return to equity holders was negative 4.8%. There was a wide variety of returns. Most losers than winners (in # and in total ISK). Got slammed on ferrogel. But, bond holders paid in full, along with interest. I need to rethink the strategy before relaunching fund 3. This fund was also at a disadvantage from the start, because of the increased interest rate paid to the bond holders. In reality, the risk to the bond holders was almost completely identical among all three bonds, because the repayment policy pretty much guaranteed that scamming was their only practical risk. As a result, giving the higher interest rate to those bond holders did nothing but increase the risk to the equity holders (including you), who were already carrying the brunt of it. Oh well. I hope you don't feel too bad about losing isk here. You can't win them all unless you never try anything risky, and that's just boring.
Machete Visor	Posted - 2010.09.14 16:00:00 - [108] Originally by: Trebor Whettam Edited by: Trebor Whettam on 14/09/2010 05:44:50 Originally by: Machete Visor liquidated fund3. final return to equity holders was negative 4.8%. There was a wide variety of returns. Most losers than winners (in # and in total ISK). Got slammed on ferrogel. But, bond holders paid in full, along with interest. I need to rethink the strategy before relaunching fund 3. This fund was also at a disadvantage from the start, because of the increased interest rate paid to the bond holders. In reality, the risk to the bond holders was almost completely identical among all three bonds, because the repayment policy pretty much guaranteed that scamming was their only practical risk. As a result, giving the higher interest rate to those bond holders did nothing but increase the risk to the equity holders (including you), who were already carrying the brunt of it. Oh well. I hope you don't feel too bad about losing isk here. You can't win them all unless you never try anything risky, and that's just boring. Yes, the 5% add'l did account for the entire loss to the equity holders basically (50M ISK). Otherwise I guess the trades would have broken even. In reality, if I do it again, I think I'll be looking at buying into 1 or 2 highly volatile / liquid commodities and holding for a month. Then it is less likely that it'll end with a market neutral type result. if it hits big, investors win big. If it fails, bond holders likely take some loss and equity losses everything. I need to think through how to choose those 1 to 2 commodities. Once PI stabilizes (i.e., runoff from the pre-patch purchases occurs), that would be the perfect market to find the commodities. Large, liquid, lots of inter commoditiy correlations etc. Best think about PI is the 2ndary market it has created
Machete Visor	Posted - 2010.09.15 04:41:00 - [109] I am wrapping up the 2nd fund a bit early. But here is why - it is way too much of a hassle to run 3 of these things at once. Three different account, 6 different types of shareholders. Just isn't worth it for what I'm getting out of it. So I paid 2 days of interest for this week to all Fund 2 bond holders and I returned all principal. I am liquidating 8 items (at normal prices, not firesale). Once they are liquidated, I believe the final dividend will be about 500M to the 2,000M in equity holders (25% return, not bad for 2 weeks). Then I will distribute 2,000M to repay the equity. But, that's not all! I am going to restructure fund 1. Fund 2 was a good idea, just poor structure on my part. Therefore, I am expanding fund 1 to swallow fund 2's strategy. I will also be revising the strategy in the following ways: 2 classes of investments: 1 - Bond that pays 10% interest, paying each week (2.5% a week). Why is the rate higher than 5%? B/c the assets I'm holding will be greater, hence greater risk of scam. Don't overlook that interest is paid weekly. This atleast partially defeases the scam risk. 2 - Equity - receives all residual dividends. The strategy will now incorporate spread trading on any item in station and any item on contracts <1 Billion. Truthfully, almost everything will be sub 500M. But sometimes a good price on a Nightmare pops up and I want to grab it and pocket 100M. Still no Jita for the normal market (all contracts are at jita). Still no hauling. Here is the bigger change: My management fee - I've been returning close to 75%-100% per month to equity holders for months now, with this fund and the previous fund. Bond holders have been getting far less, even though they have the same scam risk but different operational risk. Operational risk is very low, so the rate on bonds is mostly scam risk, so it doesn't make sense. But what I've been earning is not nearly enough given the multiple billion ISK payouts. I have yet to see another offering on MD give this type of return. As another manager has proven, 10% seems to be the going rate. So here is the new asset management fee, which will be deducted from equity dividends - 3% of assets under management (total) per month. 30% of all profits to equity holders as a incentive fee. Here are some sample numbers so you can see how this stacks up versus the current structure. Assuming 14B in AUM, with 3B in profit for the month. Assume 6B equity, 8B debt. Current structure: Interest - 400M (5% x 8B) AUM Fee - 510M (3% X 17B) Dividend - 2.090B (35% return) New Structure Interest - 800M (10% x 8B) AUM Fee - 510M (3% X 17B) Carried Interest (kinda) - 507M (30% X 1.69B) Dividend - 1183M (20% return) Assuming a 1B profit: Old structure: Interest - 400M (5% return) AUM Fee - 450M (3% X 15B) Dividend - 150M (2.5%) New Structure Interest - 800M (10% return) AUM Fee - 450M Carried Interest - 0M Dividend - (250M)(-4%) So, you can see the new structure favors equity holders when profits are high and debt holders when low. Also I am clearly incentivized to generate higher returns. 1B would be an abysmal month. I will be looking to raise 14B in total, including 2B from me (so 12B in total as public money, about the same as now). Any investor in fund 1 and fund 2 can convert 100% of their stake into debt or equity. The remainder will be given on a first come/first serve basis - no defined split between debt/equity - you choose. If 100% equity is chosen, in the two examples I gave above the numbers would be: 14B total equity - 3B profit AUM - 510M (3% * 17B) Carried Interest - 747M (30% * 2490) Dividend - 1.743B (12.5%) 14B total equity - 1B profit AUM - 510M Carried Interest - 147M (30% * 490) Dividend - 363M (2.6%) I want there to be a pros/cons to both debt & equity. Therefore, we may need to adjust the debt rate. Please discuss. RESERVATIONS ARE NOT OPEN YET
Lucyna Minmatar Interstellar Killer Bee Enterprises	Posted - 2010.09.15 05:17:00 - [110] Me rikey _________ Eve - for when I'm not playing minecraft ;)
Machete Visor	Posted - 2010.09.15 12:29:00 - [111] would it be simpler if i just asked for 12B in loans at 10%? maybe this is getting too complicated.
Scott McClellan Forum Posters Anonymous	Posted - 2010.09.15 13:47:00 - [112] Originally by: Machete Visor would it be simpler if i just asked for 12B in loans at 10%? maybe this is getting too complicated. Probably. It is kind of interesting to see this all piece together but IPOs are generally a lot more time intensive to manage than bonds or loans. Although to be honest, a lot of people running IPOs could probably get away with taking more of a cut for managing it, people are willing to accept 3% bonds, but for some reason don't want the fund manager(s) paying themselves 10% out of their own venture when they [investors] would still be making way more than they would on a 3% bond. It's a lot of work, and the standard accepted "management fee" is so low that I think that's why we see so few IPOs. Well, that and the fact that they generally have a reputation as being scams.
Trebor Whettam	Posted - 2010.09.15 14:04:00 - [113] Originally by: Machete Visor would it be simpler if i just asked for 12B in loans at 10%? maybe this is getting too complicated. Yes, although that wouldn't be as much fun for investors, since they wouldn't get to guess what the dividend would be (just whether it's a scam, which isn't as fun). In the end, you should do it because you deserve to make more profit on your work. I have one question. Why only 2B of your own isk? Surely you have more than that by now. Going forward, I'd love to see you buy back this debt and build your nontraditional loan program. While I don't think you're scamming at this time (You're too good for 12B, especially after all those dividends), this fund is a relic of the old trust-based philosophy on the MD. These are still a good way for a young entrepreneur to make his first few billion, but after than it stops making sense for either the investee (wasting isk on interest) or investor (wasting isk on a scam). Your loan program is unique, essentially trust free, and scalable. I love it.
MaddB Eve University	Posted - 2010.09.16 14:35:00 - [114] LoL, I can see the confusion as now I'm confused! First, I would like all of my investment rolled into equity if that is an option. Second, I think its neat for you to have 2 types of investors on the same fund. I get how the numbers work towards bond holders constant rate vs equity holders variable rate. I'm game for some variable action. If you would entertain current investors increasing their share I would like to add 500mil to my investment. I would like half my combined investment in equity and the other half in the bond. Thank you for your time Mr. Fund Manager! ~ MaddB
Machete Visor	Posted - 2010.09.16 18:14:00 - [115] all debt holders from fund 1 have been paid off, with accrued interest. equity dividends will follow as liquidating occurs. first dividend will be when i have 3b in ISK (to repay principal)... then the remainder will be liquidated as normal sales occur. Same for fund 2.
zindeen	Posted - 2010.09.16 23:48:00 - [116] my self I also agree you could take a little more of a cut you for the most part have been amazing to invest with.
Lucyna Minmatar Interstellar Killer Bee Enterprises	Posted - 2010.09.17 00:06:00 - [117] Personally I like the fact that you offer two options, each with a set of risks and rewards different from the other. The more people you can cater towards, the more isk you can get. Let's hope it doesn't go to your head and you take it all :) _________ Eve - for when I'm not playing minecraft ;)
Jovan Geldon Gallente Lead Farmers	Posted - 2010.09.17 00:12:00 - [118] Originally by: Machete Visor all debt holders from fund 1 have been paid off, with accrued interest. Confirming receipt of ISK. Sterling service, would definitely invest again.
Machete Visor	Posted - 2010.09.18 05:06:00 - [119] send two 1.5B dividends out on Fund 1. That essentially repays all equity. Still will send out other dividends as items liquidate (expecting another 1B+, for a 33% return for the 2 weeks since the last dividend). Sent out 1.8B on fund2, which pays back most of the equity (200M remains). Expecting a 200M+ dividend on that fund as well (25% return for the 2 weeks since last dividend). I know all this is kind of confusing for shareholders b/c it is not one big lump sum, so i'm trying to keep track of it in this thread.
Alain Kinsella Minmatar	Posted - 2010.09.18 14:27:00 - [120] Confirming all Equity & Debt returned. At this moment my overall return (from entire investment to Fund 1) sits around 39%. At your stated numbers, that should eventually push over 50%. Most of that came from Equity Dividend of course. Been an interesting ride, thanks.

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