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Montaire
Lacedaemon. Sparta Alliance
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Posted - 2006.12.18 19:40:00 -
[1]
I've been hedging for months about doing an IPO for an idea I had vs. taking out a BMBE loan.
What are some of the questions I need to answer in my IPO docs for this to work. This is what I have so far :
1. How do you plan to make money 2. How safe is the investment, what is your fallback plan 3. Why should we trust you 4. How long will it take to get our money back 5. How much of the profit are you going to take, and how do you justify it 6. What say will I, the shareholder have 7. Why should I invest in you opposed to FIN / Somthing else
Can you think of anything else ? Input appreciated.
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Shin Ra
BURN EDEN
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Posted - 2006.12.18 19:59:00 -
[2]
Why should we trust you
If you fail to answer this question properly or just skim over it with something such as (I'm respected in my corp and have been playing 3 yrs), then I will be all over you.
Please Please Please
put some thought into it when answering this question. Look at previous IPOs and the responses they got on these forums.
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Ray McCormack
BIG
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Posted - 2006.12.18 20:02:00 -
[3]
I think rather than phrasing it "Why should we trust you?" it should be put as "What are you doing to ensure we can trust you?".
| How To Afford A Tech II BPO | the all mighty BIG industrial corp from hell with a slong the size of a walrus. |
Montaire
Lacedaemon. Sparta Alliance
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Posted - 2006.12.18 20:06:00 -
[4]
Originally by: Shin Ra Why should we trust you
If you fail to answer this question properly or just skim over it with something such as (I'm respected in my corp and have been playing 3 yrs), then I will be all over you.
Please Please Please
put some thought into it when answering this question. Look at previous IPOs and the responses they got on these forums.
Yup, that was the first question I answered. And I did put a lot of thought into it because really the "All you have is my word" is frankly unacceptable.
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Nimie
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Posted - 2006.12.18 20:41:00 -
[5]
yes, but if you're a solo ipo runner, isn't that all you can say?
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Montaire
Lacedaemon. Sparta Alliance
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Posted - 2006.12.18 20:55:00 -
[6]
Originally by: Nimie yes, but if you're a solo ipo runner, isn't that all you can say?
Not at all. Assets can be locked down (BPOs) so that the CEO Cannot take them. You can even lock down the corp wallet so large expendatures have to be approved by a trusted third party.
Also the IPO can be secured, for instance if I were to want to do an IPO for 40 billion, I could put up a Hulk BPO as surety. Give the BPO over to a third party who would still produce it, and give me personally the profits. But if I ever ran wit the corp wallet they would sell the BPO and refund the shareholders. I wouldnt have any problem finding a place like STUFF or EMFI to do that if I gave them a cut from the hulk profits.
Its possible to build a framework of trust.
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Nimie
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Posted - 2006.12.18 23:16:00 -
[7]
having other people lock down your stuff can seriously gimp you though.
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Montaire
Lacedaemon. Sparta Alliance
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Posted - 2006.12.18 23:23:00 -
[8]
Not really. You can still produce from them, copy them, research them.
You just cant steal them :~)
And for a lot for IPO's the initial outlay of money is these BPO's
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Motivated Prophet
Zerodot Schools Power Corrupts Industry's
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Posted - 2006.12.18 23:30:00 -
[9]
Originally by: Montaire I've been hedging for months about doing an IPO for an idea I had vs. taking out a BMBE loan.
What are some of the questions I need to answer in my IPO docs for this to work. This is what I have so far :
1. How do you plan to make money 2. How safe is the investment, what is your fallback plan 3. Why should we trust you 4. How long will it take to get our money back 5. How much of the profit are you going to take, and how do you justify it 6. What say will I, the shareholder have 7. Why should I invest in you opposed to FIN / Somthing else
Can you think of anything else ? Input appreciated.
That's an excellent list, actually. Others would do well to follow it.
I tend to harp on #2 when looking at IPO's, and there are several aspects of this line item. Off the top of my head:
- What are the operational risks? That is, in the course of normal operations, how can losses occur? This covers suicide-ganking of freighters in high-sec, straight-up ganking of freighters in 0.0 if that's how your corp swings, etc. Obviously, if this risk profile is high, we will tend to expect better returns as a result.
- What are the external risks? This would tend to focus on things like Invention or CCP nerfage for t2 BPO-oriented IPO's, shifts in the mineral market, and so forth. How are you working to minimise these risks, if possible? For instance, selling to contracted buy orders will tend to reduce your profit-per-unit on production, but it will also keep your stock-on-hand low, insulating you a bit from the issues I mentioned.
- In both the scenarios above, how exactly does accounting work to reflect losses? If you take a loss in month 1, does that affect the month 2 dividend as you rebuild the base price of the shares, or do you operate with a lower par value?
- What happens if you get run over by a truck tomorrow? Can the corp continue without you? What if your account gets banned--are you keeping significant company assets in your wallet or hangar?
- Lastly, it's important to have a plan for what happens if the IPO simply doesn't work out. If you're looking for a t2 BPO and can't find one at the right price, for instance.
MP
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Nimie
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Posted - 2006.12.18 23:57:00 -
[10]
Originally by: Montaire Not really. You can still produce from them, copy them, research them.
You just cant steal them :~)
And for a lot for IPO's the initial outlay of money is these BPO's
actually, probaly not. if you use bpos for colateral, it means you can't sell them and use the isk for dividend free ipo support. if you use them for collateral, it means you also need to borrow more money that you need to pay dividends on. depending on most situations, it can actually make the situation worse.
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Montaire
Lacedaemon. Sparta Alliance
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Posted - 2006.12.19 00:04:00 -
[11]
Perhaps. Im not certian I agree with you though.
I produce Hulks for 44m build cost, sell for 500m. So I give my BPO to Dark Shikari and tell him to hold it as surety for my IPO in case I grab and run. His Corp (STUFF) produces them, and gives me 380m for each one, so I take a little hit in profit, but still get some. At this high level of play the little profit hit (off a BPO that was basicly given to me in the first place) isnt all that important.
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Nimie
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Posted - 2006.12.19 00:16:00 -
[12]
actually, it is. most bpos only give 7 percent or so a month. let's say you had a 50b bpo, if you kept the bpo and didn't do a ipo you get 7 percent a month. if you used it as collateral and earned 50b in ipo funds, and offered 6 percent monthly, you're down to 1 percent gain a month. you'll need to earn 13 percent monthly just to even out what you earned with one bpo but with alot more work.
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Verite Rendition
Caldari AUS Corporation CORE.
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Posted - 2006.12.19 00:57:00 -
[13]
What are you planning anyhow, Monty? ---- AUS Corp Lead Megalomanic |
Montaire
Lacedaemon. Sparta Alliance
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Posted - 2006.12.19 01:03:00 -
[14]
Originally by: Verite Rendition What are you planning anyhow, Monty?
Convo me in game Verite, I'll bounce it off you.
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Motivated Prophet
Zerodot Schools Power Corrupts Industry's
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Posted - 2006.12.19 01:29:00 -
[15]
One thing that worked very, very well for the ZERO. IPO and that I think should become standard is a short review period for the business plan. Share reservations during this period are fine so as to encourage people to commit isk while they're still excited by their initial read of the plan, but it's important to give the business plan a little room to breathe before people start investing in a venture that still has room for optimization.
Originally by: Montaire
Originally by: Verite Rendition What are you planning anyhow, Monty?
Convo me in game Verite, I'll bounce it off you.
You're more than welcome to send me a copy, as well. I will, of course, hold it in confidence until it's publicly posted.
MP
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Omber Zombie
Gallente Frontier Technologies
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Posted - 2006.12.19 05:21:00 -
[16]
I guess another question to answer is why the share split that you are going to do. I.e 50k shares at x isk rather than 500k shares at y isk (just using random numbers there). ----------------------
FTEK is Recruiting |
Lypert
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Posted - 2006.12.19 10:08:00 -
[17]
I think most people would like to know more about what your actual business plan entails and if it is viable or not. Certainly i am interested in what you have come up with. -------------------------------------------------- Zemindar Supremacy is recruiting |
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