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David H'Levi
Sniggerdly
Pandemic Legion
Posted - 2007.02.21 07:53:00 - [1]
 

So you've decided to start an IPO. This is a lot of work. It's also very enjoyable. It's one of the final steps you can take as a marketer -- it will teach you valuable skills that you can apply to real life and will get you firmly grounded in the EVE market community.

First, let me refer you to this post:

Hexxx's IPO Template Thread

You will no doubt find it very helpful. Please note that Hexxx's thread has been dead for many months, so please don't reply to it. It is a very helpful template for starting an IPO. But we want a bit more than a template.

When to Start an IPO
The first question you need to ask yourself is whether and when you should start an IPO. You should start an IPO:

After careful planning and consideration.

When you need ISK and private investment isn't to your liking, either because you need a lot of ISK or because you don't want to be beholden to only a few venture capitalists.

When you want to help the EVE Market Community with an inventive idea and help the game grow.

When you're tired of just making ISK and want to try something bolder.

What to be Aware of When Starting an IPO
IPOs seem glamorous and a way to get rich quick. They are not. They are a way to work for other people's benefit and they are extremely demanding of your time, energy, and mental sanity. Almost all scams result from honest businessmen and businesswomen getting burned out and saying "**** you guys, I'm going home." Unless you own a major part of your IPO, or recieve a substantial salary, you are making money for others for free. Even if you do own a majority share, for example, you are still making free money for others. This will always loom over you, so you might as well come to grips with it now or get into another line of work.

This is not easy work, nor is it the best way to enrich yourself as a general rule. Appreciate the IPO for the IPO's fun, and hopefully you'll have fun.

Getting Your IPO Moving:

In order to get your IPO off the ground, you need to do two things:

(1) Prove to investors that your idea has a good chance of success and is worthy of their investment.

(2) Prove to investors that you are reasonably trustworthy and stand a low risk of scamming.

This is a zero-sum relationship. The more trustworthy you are, the smaller returns you can offer (but not less than FIN, so 6% or better). The less trust worthy you are, the more you have to offer in terms of returns. Ideally, however, you will be able to do both.

How to Build Trust:
These are suggestions for helping get off the ground if you're new to the EVE Market Community. They are by no means obligatory, nor do you have to do all of them, but they are all useful ways to help build trust and show that you are actually interested in this idea enough to put some serious effort into it.

Be honest. Your business plan will not be perfect. Your reputation will not be unbesmirched. Your job is to make sure everyone knows exactly what they're getting into. This is a must.

Fully disclose all risks.

Have a privately funded, but publicly disclosed pilot program before hand on a smaller scale to get acquainted with running an IPO.

Arrange people to vouch for you ahead of time.

Arrange people to audit your corporation ahead of time.

Arrange for Trustees to keep an eye on your corporation ahead of time.

Arrange for a Board of Directors to act as a sounding board for all your ideas.

David H'Levi
Sniggerdly
Pandemic Legion
Posted - 2007.02.21 07:55:00 - [2]
 

The Corporate Shares...
This is one of the single biggest killers of IPOs. Where are they? Are they backed up by real money? Are they a salary mechanism? Are they for retained dividends? What's to stop you from selling them on EGSX right before you run away with all the money from the IPO? These are all questions of which you msut be aware. I suggest one of the following options:

(1) Arrange for a Trusted-Third Party to hold onto the shares for whatever you intend to use them for, and have him or her transfer the cash to you.
(2) Pay for them yourself, so they are backed by real ISK. Have someone verify that this is the case.
(3) Arrange for frequent audits to make sure that they are all where they should be.

Making the Prospectus/Frequently Asked Questions:
These are by no means the only questions you need to answer, but they are a very good start. Other questions might include addressing concerns that are unique to your business plan, such as manufacturing, trading, BPO research, BPC sale, etc. These can all be addressed in your prospectus/business plan or laid out explicitly and answered one by one. Try to anticipate other people's questions ahead of time, and answer them in your Prospectus/Pre-IPO thread.

Q. How do you plan to make money? Give a detailed account.

Q. How safe is the investment, what is your fallback plan?

Q. Why should we trust you?

Q. Can you offer any collateral?

Q. Why have you chosen to start this venture as an IPO rather than through private investment?

Q. How long will it take for you to start making money?

Q. How much of the profit are you going to take, and how do you justify it?

Q. What say will I, the shareholder have?

Q. Why should I invest in you opposed to FIN / Something else?

Q. What will you do in the event that you don't sell all the shares?

Q. Why do you need so much ISK up front?

Q. Do you have any other public or semi-public business ventures? If so, assuming you sell this IPO out, how much could you steal in total?

Q. What is your exit plan if the IPO is financially unsuccessful?

Q. How can investors demand that you liquidate the company, if at all?

Q. Have you done this before? How much experience do you have?

Q. What kind of returns are you expecting per month, and how will dividend payouts work? Is there a minimum return? A maximum return?

Q. What happens if and when you get hit by a bus? Do you have a fallback plan?

Q. What happens if and when you get burnt out and decide that you're tired of making money for other extremely demanding people?

Q. Do you have any oversight setup (alts with accounting roles, lockdown votes, etc.), and if not, would you be open to having them?

Q. At any time in the foreseeable future will anyone except you have the power to steal/scam? If so, who?

Q. How do you plan to use the corporate take to grow the corporation's profitability?

Q. Do you have any other characters, mains or otherwise? If so, are you comfortable sharing their identities them with us?

Q. Would you be willing to submit to periodic audits?

Q: Why are you doing this?

Q: What's your background in EVE?

Q: Will you ever buy back shares? If so, at what price?

Q: What if someone War Decs your corporation?

Q: Estimate how much money you would have to make in order to scam? In other words, everyone has their price, what is yours?

Q: Is there anyone in this game that could convince you to scam for the benefit of your corporation, your alliance, your friends, etc.? If so, who?

Q: Do you have any potential conflict of interests that could later come to bite you in the ass?

Q: Is there anything else that you would like to tell us?

David H'Levi
Sniggerdly
Pandemic Legion
Posted - 2007.02.21 07:56:00 - [3]
 

The Things to Do:
Communicate with your investors on a regular basis. Let your investors know what is going on and answer their questions.

Have a pre-launch thread to get the business plan out there and gauge interest and ask for revisions and advice before you start to sell shares. Allow reservations, but absolutely forbid transferring ISK at this point.

Have a detailed business plan. Examples of good business plans include: Zerodot, TINY and FIN

Give examples of similar ventures that were successful.

Research your venture ahead of time, so you can give investors some idea of what they're getting into.

Start small and expand where possible.

Offer either:
(1) the prospect at least 6% return, or
(2) something that has community building potential -- a new idea, a regional focus, some sort of goal that makes your IPO worthwhile even if it doesn't make a bunch of money,
or else you have no chance whatsoever of competing with FIN

The Things Not to Do:
Ignore your investors. Nothing peeves people more.

Get riled up by people calling you a scammer -- keep your cool. Getting really heated, angry and defensive just makes both of you look stupid.

Start selling shares before you have a clear idea of the interest and before you've finalized your business plan.

Post a business plan that clearly took 15 minutes to write. Show that you've thought about this for a while and actually done some research.

Come out of nowhere asking for 50b ISK for capital ship construction.

Get bogged down spending all your time responding to people calling you a scammer. Just acknowledge that scamming is a risk, and answer two simple questions:
(1) What is your reputation in EVE and why does that mean we should trust you?
(2) What do you stand to lose if this is a scam?

Dive in unprepared.

David H'Levi
Sniggerdly
Pandemic Legion
Posted - 2007.02.21 07:56:00 - [4]
 

Managing the Barrage
It's inevitable. No matter how much work you put into your Business Plan and making a trust-worthy IPO, people will try to **** in your Cherrios. The way you manage this barrage of questions will make or break your IPO. They aren't really there because people want to know the answers, but because people want to test you and make sure that you're not an obvious scammer. The better you comport yourself here, the more successful your IPO will be.

Investor: "I have never, EVER heard of you. Who the hell are you, and why should we trust you with x amount of ISK?"
You: "Well, I've already addressed those concerns in my prospectus and my pre-launch thread. If you feel that my account of my trustworthiness is inadequate, I'd be happy to try to expand on it. If you simply will not trust me because you do not know me, that is understandable. I encourage you to invest only in what you can reasonably expect not to be a scam, and even then, only what you can afford to lose."
This question will come up despite your best efforts and despite your towering reputation. Try to deal with it calmly.

Investor: "Your IPO is too small, look for private investment!"
You: "I'm not interested in running a private venture. I'd rather have a public business for reasons (x, y, z)."
This situation is pretty common. Just ignore them. They're wrong. There's nothing too small for an IPO -- it just means that you have less investors. You might need to put a share cap per investor to help diversify the number of people holding stock, but otherwise, 5b ISK is the same as 50b ISK, only usually with more profit and with less investors.

Investor: "This is so obviously a scam for the following reasons (x, y, z)!"
You: "I've already addressed those concerns and tried my best to establish my credibility. If there's anything else that you'd like to see me do, please tell me. Other than that, it's now up to your power of faith."
This situation is almost inevitable. I've seen ONE, read ONE IPO slip through in the past few months that didn't get called a scam. Just brace yourself ahead of time, do your best to show that you're not, and at a certain point just say "I'm sorry that you feel that way."

Investor: "Your IPO is too big!"
You: "Nevertheless, this is the venture that I chose because I want to do it. If you feel that I don't need that much ISK to do it, please check my prospectus where I outline exactly what each cent is going towards. I'd be happy to discuss the cost-assessment with you and we can re-evaluate the figure. However, if you don't feel that I can be trusted with this much money, then please, do not invest."
Simple as that. I'd suggest a smaller IPO in most cases, but if you're hell-bent on Capital Ship production, there's not much you can do to make it cheaper.

Investor: "If you're so good at making money, why aren't you doing this as a private venture."
You: "..."
The answers to this question will be various and sundry -- maybe you want to help the community, maybe you need another 20b ISK to get moving, maybe you just want to try an IPO. You have to figure this out for yourself. If you can't come up with an answer by the time you've completed all the other preparation work, it probably means that you shouldn't do this IPO.

Investor: "Your business plan will fail for the following reasons (x, y, z)."
You: "Well, I disagree for reasons (a, b, c)"
You have to take these kinds of objections VERY seriously. Oftentimes people will have a much better idea of the problems pertaining to your business than you do. But hopefully you have done your research, and hopefully you know better, so you can explain to them why you think it will work. If you can't answer the objection, it might be time to go back to the drawing board.

There are many, many more, but these are just supposed to get you started thinking about questions people might have.

David H'Levi
Sniggerdly
Pandemic Legion
Posted - 2007.02.21 07:57:00 - [5]
 

Sample IPOs, Successful and Not
These are a few of the IPOs on which I am basing my statements. I suggest that you at least give them a cursory look before you start your own. They will also be a good source for potential questions that you will have to think about and answer.

Successful

FIN/EFS IPO -- THE definitive IPO thread. You MUST surpass this corporation in at least some respect

Sovereign Enterprises IPO

Derelik Trading Corporation IPO

Zero. IPO

BSAC Prospectus

TINY IPO + Prospectus

TINY Pre-Launch Discussion

Gains Trading IPO -- Extremely Interesting case: Very high scam risk, very high returns, very low investment amount. The end result? A successful IPO

River's Enterprises IPO -- Same as above. The prototype for surprisingly successful small IPOs.

Unsuccessful

Geostationary Orbiteers IPO (Failed)

Sovereign Enterprises Expansion Discussion (Failed)

Esophorics Anonymous (Failed)

Wildlands Capital Ships and Logistics (Failed)

Sang Manlee IPO (Failed)

If at first you don't succeed, try, try again.

Most IPOs that fail, fail because they are poorly planned and poorly drawn up. If this is the case, don't be discouraged. Re-work your plan and try again. Some of the greatest IPOs today failed their first time through.

And finally...
For matters of integrity, you should make sure that your investors know exactly what they are getting into. As such, I suggest a disclaimer, of sorts.

The Disclaimer:
THE SECOND YOU TRANSFER ISK INTO MY WALLET, IT IS MINE ACCORDING TO THE ToS AND EULA OF EVE. WHILE I INTEND TO RUN THIS IPO LEGITIMATELY, YOU MUST NEVERTHELESS UNDERSTAND THAT IF I AM LYING, OR I END UP BEING A SCAMMER, THERE IS ALMOST NOTHING YOU CAN DO TO GET YOUR MONEY BACK.

IF I DECIDE TO RUN WITH ALL THE CASH, SELL ALL THE SHARES, STEAL ALL THE ASSETS AND SELL ALL THE CHARACTERS FROM THIS VENTURE AND ALL OTHER PUBLIC VENTURES THAT I HAVE, I STAND TO MAKE [x] ISK.

DO NOT INVEST IF YOU THINK THAT THE RISKS OF THIS BEING A SCAM OR A FAILURE OUTWEIGH THE POTENTIAL REWARDS OF THIS VENTURE.
DO NOT INVEST MORE THAN YOU CAN AFFORD TO LOSE.

Votee
Posted - 2007.02.21 12:23:00 - [6]
 

I appreciate your effort making such a guide, but I think its a very contraproductive thing to do, because these guides are much more a guide for successfull scamming. Effectively you say what needs to be done for a scammer to look authentic.
And at the other hand, if somebody wants to run an IPO, then its not that hard to figure out what needs to be done in order to convince the inverstors. Mostly it requires some common sense and thinking and usage of brain :-) - besides of course the idea of the IPO - and its not that bad if somebody can do those without a guide.

regards,
Votee

Ezoran DuBlaidd
Native Freshfood
Posted - 2007.02.21 12:59:00 - [7]
 

Originally by: Votee
I appreciate your effort making such a guide, but I think its a very contraproductive thing to do, because these guides are much more a guide for successfull scamming. Effectively you say what needs to be done for a scammer to look authentic.
And at the other hand, if somebody wants to run an IPO, then its not that hard to figure out what needs to be done in order to convince the inverstors. Mostly it requires some common sense and thinking and usage of brain :-) - besides of course the idea of the IPO - and its not that bad if somebody can do those without a guide.

regards,
Votee


i've noticed a couple of forum warriors who are on a crusade to badmouth every ipo which isn't funded by their isks, their alts, or one of their cronies' isk/alts. their abrasive questions (many of which are addressed above) have taken aback a number of would-be IPO starters. now, have they kept scammers away? looking at corps embraced by the self appointed watchdogs, i'm of the opinion of "not really".

but it does seem to have scared off small IPOs.

i'd love to see a mass amount of small IPOs start. perhaps this forum isn't the best place for them. perhaps a place like kasia's forums would be more appropriate. a place dedicated to showing the good and bad publicly traded companies inplace.

there really is a need for a guide like this, if only to encourage the growth/promulgation of small ipos, imo.

wondering if david and kasia might work out a mirror of this on her forums, in the interest of helping spur some of the small ipos?

Dark Shikari
Caldari
Deep Core Mining Inc.
Posted - 2007.02.21 13:29:00 - [8]
 

Originally by: Ezoran DuBlaidd
Originally by: Votee
I appreciate your effort making such a guide, but I think its a very contraproductive thing to do, because these guides are much more a guide for successfull scamming. Effectively you say what needs to be done for a scammer to look authentic.
And at the other hand, if somebody wants to run an IPO, then its not that hard to figure out what needs to be done in order to convince the inverstors. Mostly it requires some common sense and thinking and usage of brain :-) - besides of course the idea of the IPO - and its not that bad if somebody can do those without a guide.

regards,
Votee


i've noticed a couple of forum warriors who are on a crusade to badmouth every ipo which isn't funded by their isks, their alts, or one of their cronies' isk/alts.


Proof for these claims?

SencneS
Rebellion Against Big Irreversible Dinks
Posted - 2007.02.21 15:03:00 - [9]
 

Edited by: SencneS on 21/02/2007 15:01:19
Originally by: Dark Shikari
Originally by: Ezoran DuBlaidd
Originally by: Voter
I appreciate your effort making such a guide, but I think its a very contra-productive thing to do, because these guides are much more a guide for successfully scamming. Effectively you say what needs to be done for a scammer to look authentic.
And at the other hand, if somebody wants to run an IPO, then its not that hard to figure out what needs to be done in order to convince the investors. Mostly it requires some common sense and thinking and usage of brain :-) - besides of course the idea of the IPO - and its not that bad if somebody can do those without a guide.

regards,
Votee


I've noticed a couple of forum warriors who are on a crusade to badmouth every ipo which isn't funded by their isks, their alts, or one of their cronies' isk/alts.


Proof for these claims?


The IPO for Hidden-In-Development is a perfect example of a legit IPO, which has yield me 107% return since inception (Release of Kali), but suffered from countless "outspoken" forum regulars calling it a scam, totally thrashing the CEO and myself, and I was just an investor speaking from my personal experience with the CEO and the corporation they represent.

To be honest those shares have net me the highest return out of all the shares I've purchased. A rather disappointing 2 people not in the alliance purchased less then 100mil in shares. I'm sure they both which they invested more after they kept seeing the dividends come in.

Back to the OP, I think it's a reasonable template for an IPO but I do have to agree with others that say it just gives people the exact path they need to create a successful scam. Maybe instead of how to appeal to the public you have more "What do do on the back end" people deal with people differently. Although this is a fair example of what to expect and what you recommend as responses there is no back end management of the IPO.

To be honest I expecting more of a "This is a good formula to work out what to pay as dividends" and "Make sure you include this in your report to the public" or even recommendations on how to manage the corporation assets and finances.

Although this was a good read and should be recommended for the "Face" of the Corporation it has little to no detail about how to actually "manage" a public company. Think more CFO and less CEO, CEOs are often the public spokesperson for a company, while the CFO is the one who makes the company look good on paper.

Kasia Pelarar
Caldari
Perkone
Posted - 2007.02.21 16:18:00 - [10]
 

Originally by: SencneS
The IPO for Hidden-In-Development is a perfect example of a legit IPO, which has yield me 107% return since inception (Release of Kali), but suffered from countless "outspoken" forum regulars calling it a scam, totally thrashing the CEO and myself, and I was just an investor speaking from my personal experience with the CEO and the corporation they represent.

Could you check your figures. I make the return on B41UC shares at a lot less than 107%.

Originally by: SencneS
To be honest I expecting more of a "This is a good formula to work out what to pay as dividends" and "Make sure you include this in your report to the public" or even recommendations on how to manage the corporation assets and finances.

Although this was a good read and should be recommended for the "Face" of the Corporation it has little to no detail about how to actually "manage" a public company. Think more CFO and less CEO, CEOs are often the public spokesperson for a company, while the CFO is the one who makes the company look good on paper.


I, too, would prefer more details of how to run the corporation after the IPO rather than how to set an IPO up.

I am a little fed up with the willingness of corporations to provide information, answers and all sorts of stuff before the IPO completes, but as soon, or shortly after, they get the money from investors, it suddenly goes quiet.

That was one of the reasons why I set ESMaR up, to pass information on.

David H'Levi
Sniggerdly
Pandemic Legion
Posted - 2007.02.21 16:57:00 - [11]
 

I am well aware that this is a template both for an IPO and a scam. And frankly, I don't care. If someone's going to scam, they're going to get money anyway if they're smart, and it's going to be evident that it's a scam regardless if they're stupid.

I am just tired of seeing people try to start an IPO and run into the exact same problems time and time again. If you look at some of the evidence that I've provided, the problem many IPOs run into is not that people think that they are scams, but simply that they are poorly designed (packaged) from the start.

I don't want to see a lot of good business plans slip through the cracks because the CEO doesn't know how to properly present it. This is just a guide to get you past a lot of the common problems.

If you'd like to create a guide on how to RUN an IPO, feel free. But that seems like a much, MUCH larger endeavor.

SencneS
Rebellion Against Big Irreversible Dinks
Posted - 2007.02.21 17:39:00 - [12]
 

Originally by: Kasia Pelarar
Originally by: SencneS
The IPO for Hidden-In-Development is a perfect example of a legit IPO, which has yield me 107% return since inception (Release of Kali), but suffered from countless "outspoken" forum regulars calling it a scam, totally thrashing the CEO and myself, and I was just an investor speaking from my personal experience with the CEO and the corporation they represent.


Could you check your figures. I make the return on B41UC shares at a lot less than 107%.


Hidden-In-Development
Number of Shares 220
Purchase Price 100,000,000.00 ISK
Total Return 107,032,621.58 ISK +107.03%
Total Gain 7,032,621.58 ISK +7.03%
IPO Share Price 454,545.45 ISK
Personal Share value 486,511.92 ISK

I used an excel sheet I created for myself to see how my entire portfolio is going rather then just looking at my wallet. When I get a Dividend from any share I own, put the date and the amount, and yes I have received 107mil in the form of Dividends from Hidden-In-Development.

Remember the corporation had been around longer then Kali and was mostly sold to Alliance members before Kali so this may be the reason why the dividend numbers you have are different from what I have.

Bryan Bartlett
Caldari
Gem Traders Incorperated
Posted - 2007.02.21 18:24:00 - [13]
 

David is trying to scam us!!

no im kidding.

I would like to add in a few more interesting tidbits that would help an IPO get off the ground.

1. Dont be afraid to start with an idea, post it to teh forum, and discuss it. This is just a preplanning stage, feel out what people are comfortable with, get ideas from others. DFIB actually was meant to be a private venture for tracking my own shares, but turned into what it is now because there was a need for low cost investments.

2. Be ready to put up a percentage of the money yourself. The percentage can be anything, but for a company just starting, you want liquidable assets to cover the amount your investors put in. If placed up front in business plan, this limits the percieved risk. Again, using DFIB as an example, 25% of the shares are in reserve, representing my personal investment. Only 25% will be put into high risk ventures, the other 75% stored in minerals and isk. This gives you the option to pay back everyone if they want to cash in thier stocks

3. When you ready to post your business plan, write it ahead of time, then post it as a new topic AND NEVER EDIT IT! This allows people to see that your business plan now is the same as it was when it started. if you NEED to change your business plan, create it in a new thread and lock the old one.

4. be prepared to submit a resume. This can either be in game experiance with any character, or rl experiance.

5. to reemphisize from before... be polite, be courtious, and be honorable.


Ezoran DuBlaidd
Native Freshfood
Posted - 2007.02.22 03:39:00 - [14]
 

Edited by: Ezoran DuBlaidd on 22/02/2007 03:38:04
Originally by: Dark Shikari
Originally by: Ezoran DuBlaidd
Originally by: Votee
I appreciate your effort making such a guide, but I think its a very contraproductive thing to do, because these guides are much more a guide for successfull scamming. Effectively you say what needs to be done for a scammer to look authentic.
And at the other hand, if somebody wants to run an IPO, then its not that hard to figure out what needs to be done in order to convince the inverstors. Mostly it requires some common sense and thinking and usage of brain :-) - besides of course the idea of the IPO - and its not that bad if somebody can do those without a guide.

regards,
Votee


i've noticed a couple of forum warriors who are on a crusade to badmouth every ipo which isn't funded by their isks, their alts, or one of their cronies' isk/alts.


Proof for these claims?


read thru this forum.

Motivated Prophet
Zerodot Schools
Posted - 2007.02.22 23:35:00 - [15]
 

Originally by: Bryan Bartlett
1. Dont be afraid to start with an idea, post it to teh forum, and discuss it. This is just a preplanning stage, feel out what people are comfortable with, get ideas from others.

I believe that this is the best thing I ever did with ZERO.. A public comment period before share sales begin can serve to work out a LOT of problems that CANNOT be fixed once you have investor cash. For an example of how you can do this very, very wrong, however, take a look at the ISSO pre-launch--it simply told everyone to get their isk ready, and had no actual business content. As a result of not having a business plan to scrutinize in advance, it wasn't until a HUGE thread created for the actual IPO was bumping up on one hundred replies that we finally figured out the executive compensation formula, for instance.
Originally by: Bryan Bartlett
3. When you ready to post your business plan, write it ahead of time, then post it as a new topic AND NEVER EDIT IT! This allows people to see that your business plan now is the same as it was when it started. if you NEED to change your business plan, create it in a new thread and lock the old one.

A few considerations here. One, Chribba's EVE-Search obviates the need for this, to some degree. Additionally, it's never nice to suddenly transform everyone's bookmarks into locked threads. Lastly, the first post of any thread is an excellent place to disseminate information, and editing it is required to change the thread title. So, if you want to post your business plan in a forum thread, please have a "header" post, and then one or more replies with the business plan itself.
Originally by: Votee
I appreciate your effort making such a guide, but I think its a very contraproductive thing to do, because these guides are much more a guide for successfull scamming. Effectively you say what needs to be done for a scammer to look authentic.

I'd rather have well-written scams with a thin veneer of authenticity than poorly-written IPO's with a thin veneer of legibility. Only one of those has a covering that I gain a benefit from removing.

MP

Ezoran DuBlaidd
Native Freshfood
Posted - 2007.02.22 23:40:00 - [16]
 

Originally by: David H'Levi
I am well aware that this is a template both for an IPO and a scam. And frankly, I don't care. If someone's going to scam, they're going to get money anyway if they're smart, and it's going to be evident that it's a scam regardless if they're stupid.

I am just tired of seeing people try to start an IPO and run into the exact same problems time and time again. If you look at some of the evidence that I've provided, the problem many IPOs run into is not that people think that they are scams, but simply that they are poorly designed (packaged) from the start.

I don't want to see a lot of good business plans slip through the cracks because the CEO doesn't know how to properly present it. This is just a guide to get you past a lot of the common problems.




exactly. cheers.

Shin Ra
Sebiestor Tribe
Posted - 2007.02.23 00:02:00 - [17]
 

Edited by: Shin Ra on 22/02/2007 23:59:50
Originally by: Ezoran DuBlaidd
Edited by: Ezoran DuBlaidd on 22/02/2007 03:38:04
Originally by: Dark Shikari
Originally by: Ezoran DuBlaidd
Originally by: Votee
I appreciate your effort making such a guide, but I think its a very contraproductive thing to do, because these guides are much more a guide for successfull scamming. Effectively you say what needs to be done for a scammer to look authentic.
And at the other hand, if somebody wants to run an IPO, then its not that hard to figure out what needs to be done in order to convince the inverstors. Mostly it requires some common sense and thinking and usage of brain :-) - besides of course the idea of the IPO - and its not that bad if somebody can do those without a guide.

regards,
Votee


i've noticed a couple of forum warriors who are on a crusade to badmouth every ipo which isn't funded by their isks, their alts, or one of their cronies' isk/alts.


Proof for these claims?


read thru this forum.



If you can't handle criticism, you are in the wrong business.

also, to the op: nice thread. Should save me some time criticising people.

Zolcan
Amarr
Praetoria Shipyards
Posted - 2007.02.23 01:06:00 - [18]
 


There are a few things I see as absolutely essential when starting an IPO if you want people to invest in it.

1 - A good reputation. You have to have more to lose then win with a scam. If you're someone who has worked years to build your characters reputation and you have a reputation as a "good guy" you have more chance of succeeding. I wouldn't even necessarily trust someone who is a year old if they don't have an established "history" in Eve in other forums other then this market one. While posting here is nice and shows an interest it hasn't escaped my notice that someone could easily setup a scam that way by "establishing" a character here on the market forum. But establishing them everywhere else is alot different.

2 - A good plan. You need a plan that has either been tried before successfully or is so unique the average person says "hey thats a winner". Anyone can build ships and sell them so what is your "niche" going to be? How are you going to succeed where others fail? A well laid out plan is essential.

3 - Spell out that plan. The Sovereign charter is almost 20 pages of legal mumbo jumbo yet it spells out what happens for just about every situation. Letting the shareholders know BEFORE investing how things will work is essential. I recall one comment someone made about our final charter "I don't agree with all of it but people know so there can be no excuse". You don't have to agree with 100% of the stuff but knowing what will happen ensures you're not surprised later on.

4 - Reasonable expectations. You need a reasonable view of what will happen. Don't promise 100% dividends every week out the gate. If you deliver them hey grate but be realistic. Don't sugar coat you're reports and projections.

5 - Communication. I believe to assure shareholders and give them confidence you're doing your best that you should COMMUNICATE with them on a regular basis. I know at Sovereign we do our period reports (twice a month) and have a little news blurb about what we're up to along with our balance sheets. If I have your money you should have an idea of what I'm doing with it. I don't have to tell you all the "secrets" but I should at least tell you kind of what I'm up to.

6 - Regular dividends. This is a big one. Make a schedule and stick to it. If you can't for some reason EXPLAIN WHY don't just not pay and let people post here "where is the XXX Corp dividend? We've all seen it. Don't let people doubt and begin to speculate it only leads to problems. Pay on a regular schedule so people know and expect it.

7 - Start small. This is another "big one" as far as I'm concerned. I know with Sovereign we only raised 4.0b isk from the community and 2.5b of it was my own. We only raised 1.5b isk from everyone else. That isn't alot of money and sure isn't enough to ruin a reputation over. If you come to the community with your first IPO and are asking for 50b isk you're going to have trouble. People doubt.

8 - References. This helps alot if someone you know and trust can vouch for your character. While we're all characters in a game in the end our character will be hurt or helped depending on how the IPO goes. If someone established has worked with you for years and knows you and trusts you and can say "I know this person he's a good guy" that will help. I know a few examples where I've invested based just on someone I respect saying "I know him he's a good guy". Sure they could scam but I consider the odds less. In the end it's all about odds anyway.

Those are my eight big points for IPOs. I agree that posting a "template" of sorts probably won't help as scammers could follow it but I think the community does a good job of weeding out the bad apples.

Zolcan Very Happy

Zolcan
Amarr
Praetoria Shipyards
Posted - 2007.02.23 01:12:00 - [19]
 

Quote:
1. Dont be afraid to start with an idea, post it to teh forum, and discuss it. This is just a preplanning stage, feel out what people are comfortable with, get ideas from others.


This is an excellent point. I would mention that our Sovereign Expansion Idea is listed above as a "failure". It wasn't a failure at all it was an open discussion of an idea. We would've had a vote down the road if we'd decided to enact it. But it was never an IPO at all just an expansion idea.

For suceessful IPO type things you could add the Sovereign Bond Fund 0001. We raised money to buy a freighter and our profits are up over 100% since then. There again as mentioned above in the quote we posted the idea and discussed it at length then held a shareholder vote. While I hold about 66% of all the shares I don't vote in these elections so it is a "true" shareholder vote.

But discussing things and bringing ideas to the table is a good way to build some trust and bounce ideas off people who have other viewpoints. As mentioned above with out expansion idea some people posted excellent counter-arguments that basically showed why it was NOT a good plan. If I'd just gone ahead and done it (as some CEOs would) thinking it would've been best we could've been hurt.

Zolcan Very Happy

Ezoran DuBlaidd
Native Freshfood
Posted - 2007.02.23 12:34:00 - [20]
 

Originally by: Shin Ra


If you can't handle criticism, you are in the wrong business.

also, to the op: nice thread. Should save me some time criticising people.



hmm, i believe the person i replied to can read just as well as i can, and probably knows a lot more of the "mighthavebeens" than i do.

not sure how that means i can't take the heat. but whatever, learning to read (with comprehension) seems to be a neglected art. great job sidetracking.

my own caveat - is this going to get listed with kasia's pages, or did she decline on that? what about a sticky here, so that folks who want to try to break into the public business have an idea. i'm sure there's still lots of small time/newtothegenre folks that would love to get a publicly traded business going, sans the usual forum warrior dribble.

Tirg


ISD YARR
Interstellar Services Department
Posted - 2007.02.23 16:35:00 - [21]
 

Added to the Guide sticky. If you have any questions, please email us at mods@ccpgames.com.

Kasia Pelarar
Caldari
Perkone
Posted - 2007.02.23 17:34:00 - [22]
 

Originally by: Tirg
Added to the Guide sticky. If you have any questions, please email us at mods@ccpgames.com.


\o/ yaay

Could you change the link "Publicly listed corporations in EVE" to "Public Listed Corporations and other links" and fix it to;
( http://myeve.eve-online.com/ingameboard.asp?a=topic&threadID=473252 )

Also, add the "Enlarge your wallet !" thread by Fedjakeen to the "Newbie Guides and Q&A";
( http://myeve.eve-online.com/ingameboard.asp?a=topic&threadID=449229 )


 

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