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Vhaluus
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Posted - 2008.06.01 15:51:00 -
[1]
Edited by: Vhaluus on 01/06/2008 15:53:53
EBet IPO Plan
ò Chapter 1 - Summary of Ebet
ò Chapter 2 - Background on origins/idea/current business
ò Chapter 3 - Corporate Governance
ò Chapter 4 - The Business Plan (either beginning or expanding)
ò Chapter 5 - Statement of Assets
ò Chapter 6 - Full Disclosure of Risks
ò Chapter 7 - Full Disclosure of Main and Alts
ò Chapter 8 - Exit Strategy
ò Chapter 9 - IPO Phases, Dividends, Market Cap
ò Chapter 10 - FAQ
Chapter 1 - Summary of Ebet
EBet will be a company set up for the purpose of allowing Eve players to bet on real world events with in game currency. Initially betting will be limited to sporting events from around the world such as but not necessarily limited to:
* Soccer
* Grid Iron
* Baseball
* Rugby
* Tennis
* Golf
* Cricket
Later if the business is successful and well established it may expand into other betting areas.
Chapter 2 - Background on origins/idea/current business
Prior to creating my account on Eve I did extensive research into its current economy and the market opportunities that were left untapped and this style of gambling struck me as easily the most profitable potentially. The real world betting industry is huge in every country of the world, even those it is illegal in. Eve also has many advantages over the real world industry in that people can get the same thrill and challenge without potentially ruining their lives if things take a turn for the worst.
however the one thing I lack being a new player is funds, so I am opening up the opportunity to you, the investment savvy public, to provide that and in return gain access to potentially extremely large profit margins.
Chapter 3 - Corporate Governance
The day to day decision making of the business will be carried out myself. Initially I will also shoulder the full work load, however if the business expands to the point I can not keep up other players may be hired for data processing roles (with appropriate checks and balances put in place to reduce the risk of fraud).
I will own 51% of all shares initially. the remaining 49% will be divided amongst investors. However despite having what would normally be the controlling share and running the business I will be a silent shareholder. Any shareholder may call a vote on any aspect of the business (with one assigned per share), I will not vote, and the decision reached will be binding without me having any ability to overrule it. Additionally upon commencement of the business the shareholders will decide, by virtue of a majority vote, on either a single overseer or a board of directors who will control all access to the corporate fund to ensure that I am not able to commit any major fraud. Each days takings will be transfered into this account to which I do not have withdrawal access and at the end of each week I will request back enough money to pay all winning bets.
Voting amongst shareholders will not be mandatory and a shareholder may request the transfer of their voting power to a nominated representative shareholder. A forum will be set up to allow effective communication between myself, the board/overseer and the shareholders and ensure as close to complete transparency as possible.
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Vhaluus
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Posted - 2008.06.01 15:52:00 -
[2]
Edited by: Vhaluus on 01/06/2008 15:54:16
Chapter 4 - The Business Plan
As stated previously betting will take place on sporting events, however I will not have the staff to do the large amount of research required to set good odds. As such odds will be taken from real world betting agencies, with one agency assigned to each event. A website will be created listing all events that bets are currently being taken on, a link to the odds from a betting agency and a bet-code for each bet possible. This will enable players to send all bets to a single account with the bet-code as their reason and a program examining the API-key to record all bets.
Due to the constantly changing odds intrinsic to sports betting and the inability to automatically retrieve odds bets will not be finalized instantly upon recieval. Instead I will go through bets placed manually, check the current odds and send an eve-mail to the customer with the amount of money they bet, on what and the odds at the time of processing. The customer will be able to respond with CONFIRM or DENY, if they confirm the bet is placed exactly as specified in the email and if not all money is completely refunded.
Because of the up and down nature of the betting industry there will be a limit on the maximum theoretical loss I will allow to risk in a single week equal to 25% of money held by the business, allowing for the business to continue operating for a considerable amount of time during bad periods, albeit possibly at a reduced capacity.
Chapter 4 - Statement of Assets
nothing of any significance.
Chapter 5 - Full Disclosure of Risks
I will be honest, there are SIGNIFICANT risks associated with this IPO both in terms of the industry and myself personally.
The betting industry is a dangerous one and more than one bookmaker has gone from millionaire one month to living on the street a few months later because of bad decisions. there IS a risk that you will loose most or all of your contribution to this IPO. Additionally people could
In addition there is the perceived risk with my being a new player, my potential to be a scam account or just generally incompetent.
There is my physical wellbeing. I am rather fit and young yet there is always the risk of being hit by a car and I am also in the process of joining the Australian army reserves which could cause any number of combat training related accidents even though the Australian reserves are never deployed in active service except on a voluntary basis except in extreme circumstances. However if I disappear most of the money will be in the hands of those able to redistribute it out to the shareholders.
Finally there is the fact I'm Australian... and how much can you REALLY trust someone living in a former prison colony? (ok so making a joke about my trustworthiness in my own IPO is probably not the best business decision but I couldn't resist :P)
Chapter 6 - Full Disclosure of Main and Alts
This is my main. Yes he's less than 2 weeks old. Yes I realize that would still be in the trial period if I hadn't paid already.
No alts
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Vhaluus
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Posted - 2008.06.01 15:53:00 -
[3]
Edited by: Vhaluus on 01/06/2008 15:55:03
Chapter 7 - Exit Strategy
If the business looks like failing then at any point the shareholders may vote to liquidate, which will essentially comprise of distributing the funds held to the remaining shareholders. The only point I will NOT negotiate on here is that all current bets are honored first before shareholders receive their money back.
If there is no vote to liquidate I will continue to run the business, hoping for luck to change until no money is remaining.
Chapter 8 - IPO Phases, Dividends, Market Cap
Total Number of Shares-
To be established based on interest
Price Per Share-
To be established based on interest
Dividend Schedule-
Monthly
Dividend Payment-
each month net profit will be calculated. Half net profit will remain in the business to increase capacity and ensure the business survives during lean times. The remaining half will be divided amongst shareholders. There will be no minimum and no maximum payment each month. For months where there is a net loss, no payments will be made.
Chapter 8 - FAQ
Q: How do I know this isn't a scam?
You don't. However I can only offer you the following reassurances
* The business principle is sound
* I can make much more money by staying in the business than grabbing as much money as I can and running
* Most money will be constantly out of my reach. The maximum I could steal would be one weeks takings if I refused to put them in the appropriate account or one weeks losses if I decided to pocket them rather than pay out.
* I will not ask for a single isk until I have the website for this enterprise set up. If I was really out to scam, would I really go to that much trouble?
Q: How do you know you'll be successful?
Probably not what you want to hear, but the honest truth is that I don't. I shall try my hardest but this is a risky IPO. At the end of the day its up for you to decide if its worth it because there are also possibly high rewards.
Q: Why are you doing this?
I am doing this for a lot of reason:
* To fund the rest of my eve playing without having to mine or mission run for the rest of my life
* Its a challenge
* I love economies and this seems really, really interesting
Q: Do you intend to have an audit done at some point?
As often as the shareholders decide is unnecessary. I am also willing to provide full API keys for both my current account and the account I will create to manage the business.
Q: What's your background?
I am a university student, aged 21 studying a bachelor of information technology (major in business systems engineering). For a period of six months I supported myself entirely on betting on Australian football (AFL) so know what its like to be a professional gambler. In addition I have worked as a bookies clerk at a horse race track.
Q: Will you ever buy back shares?
Share buyback is something I am open to but would like to leave open ended to ensure everyone gets value for money. However I do have the following requirements for any share sales:
1. Shares are first offered back at a price you deem fit to the business itself and the remaining shareholders vote on if to accept or not, this way existing shareholders gain a way to passively increase their shares worth
2. If the shareholders decide not to have the business buy back, I get the next purchase rights at that price
3. If I also decline, any shareholder may buy them at that price. You may either select a specific shareholder you wish to give them to or it will be on a first come, first serve basis
4. Finally if no-one is willing to buy you may sell to the public at that price or higher.
Q: Will you ever pay over 5% dividends?
Yes.
Q: What if someone War Decs Ebank?
Then I will laugh extremely hard and possibly use my own private money to fund mercenaries to attack them just for my own amusement :P
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Vhaluus
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Posted - 2008.06.01 15:57:00 -
[4]
Edited by: Vhaluus on 01/06/2008 16:06:26
Edited by: Vhaluus on 01/06/2008 16:05:43
Q: Do you have any other limitations you are going to impose on the business?
Yes, just one. Gambling addiction is a serious matter and the last thing I want is for someone to become addicted from this business or to reignite the flame in a former addict. As such any player may ask us to disallow them to place a bet or to place limitations on their betting abilities and we will respect and comply. In addition if I or the controlling portion of shareholders fear we may be creating an addict then bans or restrictions on their betting may be placed. This is the one case where the shareholders may NOT overrule me, I have seen too many people ruin their lives to be willing to budge on this matter even if it means the IPO never gets off the ground because of it.
Q: Did you copy/paste this IPO nearly entirely from Hexxx template:
Yes, yes I did. Since this is only looking for expressions of interest that template formed a very good basic platform for me to expand upon for my official request for investment.
Q: Did you steal this idea from EBAK Ricdics recent post:
No I did not. However after that post was made I wanted to jump in asap to get my foot in the door. Originally I was planning to wait until my website was done but I was not willing to wait and risk someone else getting on before me. However even if you think I have, isn't that a smart move on my part? there was a good idea floating there for anyone to take which he made no claim to so it would have been a smart business move.
edit: fixed a stupid typo in previous posts. also previous edits were trying to restore some vague order of formatting lost from the copy/paste
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Vhaluus
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Posted - 2008.06.01 15:58:00 -
[5]
Edited by: Vhaluus on 01/06/2008 15:58:46
reserved
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Treelox
Market Jihadist Revolutionary Party
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Posted - 2008.06.01 16:03:00 -
[6]
Edited by: Treelox on 01/06/2008 16:03:48
 Originally by: Vhaluus
Q: What if someone War Decs Ebank?
Then I will laugh extremely hard and possibly use my own private money to fund mercenaries to attack them just for my own amusement :P
While I am sure that the Ebank crew appreciates your willingness to help, I am sure they can fight their own battles. Maybe a better copy paste job your next time.
---edit
fixed a broken quoting error caused by myself
--
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Vhaluus
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Posted - 2008.06.01 16:04:00 -
[7]
Edited by: Vhaluus on 01/06/2008 16:04:44
Originally by: Treelox
Originally by: Vhaluus
Q: What if someone War Decs Ebank?
Then I will laugh extremely hard and possibly use my own private money to fund mercenaries to attack them just for my own amusement :P
While I am sure that the Ebank crew appreciates your willingness to help, I am sure they can fight their own battles. Maybe a better copy paste job your next time.
LMAO ok so that was a bad typo on my part.  how did I not spot that.
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Shar Tegral
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Posted - 2008.06.01 16:10:00 -
[8]
Originally by: Vhaluus
LMAO ok so that was a bad typo on my part. how did I not spot that.
No worries as it is all part of our dastardly plan. The subliminal message in the webpage that you go to to watch all your compounded interest was designed to make you mutter, subvocally, "ebank is good, ebank is god". This muttering is nothing more than hypnotic reinforcement to keep our services forever in the front of your mind and, possibly, help spread our conditioning to others around you as you eventually become a living subliminal advertisement yourself. All joking aside though... I don't know if your IPO fits within the EULA. I'm not sure really but I think it is very edgy in that regard.
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Ray McCormack
hirr
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Posted - 2008.06.01 16:12:00 -
[9]
Hi. www.rls-eve.com. Do you mean something like that?
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Vhaluus
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Posted - 2008.06.01 16:17:00 -
[10]
Originally by: Shar Tegral
All joking aside though... I don't know if your IPO fits within the EULA. I'm not sure really but I think it is very edgy in that regard.
would you care to elaborate? the last thing I want to do is get myself or anyone else involved in trouble.
Also somewhat like the sweepstakes except that you will bet against the business rather than other players. There are many problems in the sweepstakes system as can be seen by the numerous people who have placed 1isk bets in the hope of netting the million dollar bets of others... the odds just aren't favorable for either the gambler or the business in that situation. Additionally if you loose 100 mil isk to someone who put a 1 isk bet you're unlikely to use the service again.
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Shar Tegral
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Posted - 2008.06.01 16:26:00 -
[11]
Originally by: Vhaluus
would you care to elaborate? the last thing I want to do is get myself or anyone else involved in trouble.
I'm told that there is already a service for betting isk on out of game events/sports. However myself I think that the clauses 9, 10, 11 might be too close to this issue. Mind you I'm very very anal when it comes down to the EULA.
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Roguehalo
RH Ship Brokers
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Posted - 2008.06.01 16:28:00 -
[12]
At last an 'interesting' IPO 
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Vhaluus
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Posted - 2008.06.01 16:33:00 -
[13]
Originally by: Shar Tegral
Originally by: Vhaluus
would you care to elaborate? the last thing I want to do is get myself or anyone else involved in trouble.
I'm told that there is already a service for betting isk on out of game events/sports. However myself I think that the clauses 9, 10, 11 might be too close to this issue. Mind you I'm very very anal when it comes down to the EULA.
thank you for letting me know. 
I have decided to be safe and sent a query to CCP to check their position on the matter.
oh and I've had issues before with posting on forums and coming across as sarcastic when I didn't mean to so I just want to clarify in advance that I am not being sarcastic here.
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Shar Tegral
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Posted - 2008.06.01 16:35:00 -
[14]
Originally by: Vhaluus
oh and I've had issues before with posting on forums and coming across as sarcastic when I didn't mean to so I just want to clarify in advance that I am not being sarcastic here.
Ok, to clarify: I generally sound like an arse. Mostly because I often am. Just thought I should say that in advance so you won't feel the slightest guilt about being sarcastic to me. Trust me, I probably won't feel much if I do seem like an arse.  PS: I ain't lying, I can be a real buttwipe.
To Shar -verb:
1 - To say what you mean.
2 - To say what it means.
3 - To say something mean. |
Vhaluus
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Posted - 2008.06.01 16:37:00 -
[15]
Edited by: Vhaluus on 01/06/2008 16:43:16
Originally by: Shar Tegral
Originally by: Vhaluus
oh and I've had issues before with posting on forums and coming across as sarcastic when I didn't mean to so I just want to clarify in advance that I am not being sarcastic here.
Ok, to clarify: I generally sound like an arse. Mostly because I often am. Just thought I should say that in advance so you won't feel the slightest guilt about being sarcastic to me. Trust me, I probably won't feel much if I do seem like an arse. PS: I ain't lying, I can be a real buttwipe.
 So can I, but I generally prefer to only seem like a rude ***hole when I'm actually being one
edit: it has been bought to my attention that Americans don't know what grid iron is. Grid Iron is what a large part of the rest of the world call American football.
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Kazuo Ishiguro
House of Marbles
Zzz
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Posted - 2008.06.01 16:45:00 -
[16]
Originally by: Shar Tegral
Originally by: Vhaluus
would you care to elaborate? the last thing I want to do is get myself or anyone else involved in trouble.
I'm told that there is already a service for betting isk on out of game events/sports. However myself I think that the clauses 9, 10, 11 might be too close to this issue. Mind you I'm very very anal when it comes down to the EULA.
In my view, 9 has little to no bearing on the issue, unless he spams people with adverts in chat channels or via evemail or (excessively) on the forums. 10 is OK, since the service provided is fundamentally in-game and is paid for with in-game currency. 11 is also almost certainly ok, since the service provided is directly related to eve - a facility for betting with virtual currency.
Also, the fact http://www.rls-eve.com/ has already been operating for some time, and that people have been running in-game lotteries based on various real-life national lottery draws for as long as I've been playing, strongly suggests that the EULA isn't going to be a problem.
You're not directly competing with rls, since you're offering quite a different sort of bet - I'd suggest that you consider acting as a more general betting exchange, possibly using EBANK affiliate accounts to hold isk.
My research services
Mineral compression for carrier/Rorqual pilots |
Maestro Del'Tirith
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Posted - 2008.06.01 16:49:00 -
[17]
Love the looks of an interesting IPO...I tend to follow the Warren Buffett principle in my IRL investments, and so will apply the same principle here...I personally don't understand betting, so won't invest either of my character's money in a betting service, but really look forward to hearing how it goes.
Good luck!
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Erah
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Posted - 2008.06.01 16:54:00 -
[18]
There might be some problem with your confirm/deny evemail prior to accepting the bet.
Do you plan to be online before every game that takes place? if not, how will you handle last minute bets?
Let's take an example:
if someone send you a bet 1 hour before the event takes place and you're not online, what happen if he send you a "deny" evemail after the event is completed and he lost his bet? his bet wasn't accepted since he didn't confirm it...
do you plan to refund the bet?
and if he wins the bet without having sent "confirm" evemail, does he still get his money?
not sure if I made my point clear... |
Vhaluus
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Posted - 2008.06.01 16:56:00 -
[19]
Originally by: Erah
There might be some problem with your confirm/deny evemail prior to accepting the bet.
Do you plan to be online before every game that takes place? if not, how will you handle last minute bets?
Let's take an example:
if someone send you a bet 1 hour before the event takes place and you're not online, what happen if he send you a "deny" evemail after the event is completed and he lost his bet? his bet wasn't accepted since he didn't confirm it...
do you plan to refund the bet?
and if he wins the bet without having sent "confirm" evemail, does he still get his money?
not sure if I made my point clear...
if the confirm mail is sent after the event has started, let alone finished then the bet will not be processed and the money refunded. This does have the disadvantage of making last minute bets hard unless it gets profitable enough for me to employ people in other timezones to be on most of the day however the only other option is to make a script that automatically extracts odds from other websites which while legal I don't think they'd like and as such would prefer to avoid.
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EBANK Ricdic
Eve-Tech Savings n Loans
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Posted - 2008.06.01 17:19:00 -
[20]
Originally by: Roguehalo
At last an 'interesting' IPO
YES
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Pies
Exanimo Inc
Anarchy.
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Posted - 2008.06.01 17:46:00 -
[21]
You way of processing bets and receiving the odds would be far too much work. You should consider looking at how some other betting companies work. For example there are many out there that don't work on normal odds like most, but instead, people match bets against odds set and requested by other punters, therefore there is no need for bookmakers odds.
Systems like that would be much easier to automate using a website and also have a number of benefits for the punter. They get better odds, and don't pay anything to the bookmaker. I think there is a 5% surcharge from winnings by real companies like BetFair who use a similar system.
___________________
Tasty... |
Vhaluus
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Posted - 2008.06.02 02:23:00 -
[22]
Originally by: Pies
You way of processing bets and receiving the odds would be far too much work. You should consider looking at how some other betting companies work. For example there are many out there that don't work on normal odds like most, but instead, people match bets against odds set and requested by other punters, therefore there is no need for bookmakers odds.
Systems like that would be much easier to automate using a website and also have a number of benefits for the punter. They get better odds, and don't pay anything to the bookmaker. I think there is a 5% surcharge from winnings by real companies like BetFair who use a similar system.
this has possibilities. I'd be willing to do it but at the end of the day acceptance of bets is still going to primarily be me comparing them to betting websites.
A good bookkeeper does a LOT of research into everything they take a bet on, something there is no way I can do on my own for this many sports so either way I am forced to rely on the expertise of those who do it for a living.
So it seems there is interest, so I will progress to the next phase, which is the finalized IPO. So any feedback you've got please let me know, conditions or changes that would be required to secure your investment or you think would increase my chances of securing the investments of others etc.
Also what do people think about the rather unusual idea of setting a price per share but no limit on how many shares there are. Under the system I'd give people a set amount of time to buy as many shares as they want and people could back out if they felt their share was getting too diluted for their taste by other purchases. My logic behind this is that limitations on profit will be largely dictated by how much I am able to risk each week. Additionally the more starting funds the lower the risk involved in investment because it allows for more initial bad luck. Or should I just go with a normal xxxx shares for xxxx price?
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Nido Gentz
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Posted - 2008.06.02 02:52:00 -
[23]
Edited by: Nido Gentz on 02/06/2008 02:52:56
Originally by: Vhaluus
Edited by: Vhaluus on 02/06/2008 02:29:26
this has possibilities. I'd be willing to do it but at the end of the day acceptance of bets is still going to primarily be me comparing them to betting websites. A good bookkeeper does a LOT of research into everything they take a bet on, something there is no way I can do on my own for this many sports so either way I am forced to rely on the expertise of those who do it for a living.
So it seems there is interest, as such I will progress to the next phase, which is the finalized IPO. Any feedback you've got please let me know, conditions or changes that would be required to secure your investment or you think would increase my chances of securing the investments of others etc.
Also what do people think about the rather unusual idea of setting a price per share but no limit on how many shares there are. Under the system I'd give people a set amount of time to buy as many shares as they want and people could back out if they felt their share was getting too diluted for their taste by other purchases. My logic behind this is that limitations on profit will be largely dictated by how much I am able to risk each week. Additionally the more starting funds the lower the risk involved in investment because it allows for more initial bad luck. Or should I just go with a normal xxxx shares for xxxx price?
edit: fixed a few typos
I would recommend setting a fixed share offering to begin with for a couple of reasons. First, its probably going to take some time to ramp the operation up, advertise, and get people interested in placing bets so I feel a large amount of Isk would potentially be sitting idle. Secondly, you can always come back with a secondary at a later time if you need additional Isk to expand once you've seen if the demand has come through.
Just my two cents...
edit: formatting
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Amarr Citizen 155
Alternative Methods Research Group
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Posted - 2008.06.02 03:30:00 -
[24]
Originally by: EBANK Ricdic
Originally by: Roguehalo
At last an 'interesting' IPO
YES
yeah, finally an interesting IPO.....
----------------------------------------------
Why do it the hard way when you can do it the AMARR way. |
Arous Drephius
Caldari Provisions
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Posted - 2008.06.02 09:17:00 -
[25]
Looks interesting.
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Roger Welco
WhiteGlaze Interstellar Inc.
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Posted - 2008.06.02 09:40:00 -
[26]
Originally by: EBANK Ricdic
Originally by: Roguehalo
At last an 'interesting' IPO
YES
Yes it is.. and i have to say I was thinking of setting something up along the lines after Ricdic talking about boring IPO's.. But it looks liek you beat beat me to it, thats what i get for thinking to much and then spending yesterday doing what the wife wanted :)
on the plus side if it checks out with CCP etc, I would be interested.
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Vhaluus
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Posted - 2008.06.02 09:56:00 -
[27]
Originally by: Roger Welco
Originally by: EBANK Ricdic
Originally by: Roguehalo
At last an 'interesting' IPO
YES
Yes it is.. and i have to say I was thinking of setting something up along the lines after Ricdic talking about boring IPO's.. But it looks liek you beat beat me to it, thats what i get for thinking to much and then spending yesterday doing what the wife wanted :)
on the plus side if it checks out with CCP etc, I would be interested.
Ah yes, we young bachelors will always have the advantage :P
still no word back from CCP though.
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Mr Horizontal
KIA Corp
KIA Alliance
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Posted - 2008.06.02 10:04:00 -
[28]
Originally by: Vhaluus
Also what do people think about the rather unusual idea of setting a price per share but no limit on how many shares there are. Under the system I'd give people a set amount of time to buy as many shares as they want and people could back out if they felt their share was getting too diluted for their taste by other purchases. My logic behind this is that limitations on profit will be largely dictated by how much I am able to risk each week. Additionally the more starting funds the lower the risk involved in investment because it allows for more initial bad luck. Or should I just go with a normal xxxx shares for xxxx price?
No. It's critical you specifically state a required market capitalisation or 'marcap', because at the end of the day you are taking out a public loan, and the amortization of that loan (ie the dividends) needs to be a predictable and expected number. Then when you need to expand, you just ask for more money and re-crunch the numbers each time. In the long run, it'll also be a lot easier for you too.
The other reason of course for having a defined marcap is people may invest in you as an unknown with 10b, but not 20b - you need to build trust over time running the IPO to gather more money. If you asked for 100b straight up you will get a very rude response.
The dividends on something like this should be a profit-share, because it is a high-risk investment, and investors will look to maximise ROI. ie, you take 20%, 40% goes to dividends and 40% reinvested in the business for example.
To also echo what Pies alluded to, you really, really must strive to reduce the amount of effort required in running this IPO, because if you burn out after 6 months, the investment is no good and you will harm your name by biting off more than you can chew.
I suggest more of a horseracing book keeping affair, whereby the popularity of the bet (ie as more and more people bet on that particular outcome) then changes the odds, and you get favourites based on demand etc. So you start with a 50% odds on both outcomes, and as people bet on that out come, the odds change based on the amount pooled.
Director | www.eve-bank.net |
Vhaluus
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Posted - 2008.06.02 10:14:00 -
[29]
Edited by: Vhaluus on 02/06/2008 10:16:26
Originally by: Mr Horizontal
Originally by: Vhaluus
Also what do people think about the rather unusual idea of setting a price per share but no limit on how many shares there are. Under the system I'd give people a set amount of time to buy as many shares as they want and people could back out if they felt their share was getting too diluted for their taste by other purchases. My logic behind this is that limitations on profit will be largely dictated by how much I am able to risk each week. Additionally the more starting funds the lower the risk involved in investment because it allows for more initial bad luck. Or should I just go with a normal xxxx shares for xxxx price?
No. It's critical you specifically state a required market capitalisation or 'marcap', because at the end of the day you are taking out a public loan, and the amortization of that loan (ie the dividends) needs to be a predictable and expected number. Then when you need to expand, you just ask for more money and re-crunch the numbers each time. In the long run, it'll also be a lot easier for you too.
The other reason of course for having a defined marcap is people may invest in you as an unknown with 10b, but not 20b - you need to build trust over time running the IPO to gather more money. If you asked for 100b straight up you will get a very rude response.
The dividends on something like this should be a profit-share, because it is a high-risk investment, and investors will look to maximise ROI. ie, you take 20%, 40% goes to dividends and 40% reinvested in the business for example.
To also echo what Pies alluded to, you really, really must strive to reduce the amount of effort required in running this IPO, because if you burn out after 6 months, the investment is no good and you will harm your name by biting off more than you can chew.
I suggest more of a horseracing book keeping affair, whereby the popularity of the bet (ie as more and more people bet on that particular outcome) then changes the odds, and you get favourites based on demand etc. So you start with a 50% odds on both outcomes, and as people bet on that out come, the odds change based on the amount pooled.
you raise a fair point and yes I will decide on a fixed value, what that value is at this point I'm really not sure. Evaluating demand in an industry that is very small in eve currently is hard to do. Also yes dividends were always going to be a profit share.
The reason the system was so complex is that in a horse race, to use your example, the bookie nearly always has more information than the punter however I have no way of collecting the information required to alter odds constantly, only by demand. So if the favorite horse pulls out and I don't know about it and someone puts a large quantity on the second favorite before I hear about it then it could be a disaster.
However after much consideration I realize that this may be an inherent risk I am forced to accept. As such the new plan is to take bookie odds every 12hours, alter them depending on the bets I currently hold, and then post them on the website.
I still feel the need to go with established betting agencies odds because, at least initially, there will not be enough bets placed for accurate odds to be given purely by viewing bets placed.
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Mr Horizontal
KIA Corp
KIA Alliance
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Posted - 2008.06.02 10:41:00 -
[30]
Then do a 2-pronged solution, and allow the business to undertake even more betting:
1) Provide a high-profile betting service where you as the pundit sets and offers the odds, especially on bets you know everything about so you'd be like William Hill. This is where you'd get actively involved in the risk, and meddle the stakes.
2) Provide an automatic betting thing which like Pies suggests allows punters to set up a bet, which a second or third punter can take up. This can be completely automated and you simply charge a 5% or so 'handling fee'. For example, like Betfair.com
Thirdly, have you thought of spread betting? This may be a little too much for a fair few of us simpletons to comprehend, because like Professor Bunsen's option trading IPO, people seem to lack 'advanced' concepts in financial trading - but for a few people this might be interesting
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