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blankseplocked Guide to trust, reputation, and getting funding.
 
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Kushion
Anti Sweden Defense Force
Virtue of Selfishness
Posted - 2008.01.27 07:35:00 - [1]
 

So, you want to start an IPO. Unfortunately, you've had problems/are having problems/are worried about having problems with trust & getting funding. Sound like you? Then this post should help.

If you want investors to pour billions of isk into your venture, you're going to have to convince your investors of two things; firstly, that you're a trustworthy person. Secondly, that you can run & manage a business well enough to make your investors a profit. Many would argue the system in eve is stacked against honest businessmen; there are no in-game repercussions for scammers. Add in alts and anonymity and it's practically a scammers' dream. The only tool to combat this is your reputation. To investors, this is the most important thing you can have. Obviously, this will make it hard for newer players who legitimately want/need funding to get it. There's no easy way around it, though. You want funding, you have to work on your reputation.

Another important aspect of your reputation is your ability to make isk. One practical reason for this is that your investors want to be confident that you can take their money and make money off it. For instance, a two year old character with 3m isk in his wallet that wants a 15b investment probably won't get funding. If you can't make more than that in two years of playing, how can you be trusted to make money off 15b? Likewise, a new player that wants a large investment but has little isk in his wallet and no established business won't inspire much confidence in investors. A player with an established business and billions in isk and assets clearly knows how to make money – and if he tried to scam in his IPO, it could damage his reputation and possibly his ability to make isk. A new player has less to lose – so it's more critical that they prove that they know how to make isk.

A legitimate business that stays in business has the potential to make much more isk than a scam attempt, anyway. Which is another reason why proof of ability is so important; most scammers don't know how/are too lazy to make money via the legitimate methods, and a legitimate player can make much more by staying legit. A legitimate player has little to gain by scamming in an IPO; he could get a better return by using it to make more money. If you can prove you know how to make isk, your investors will have less to fear.

Below, I'll briefly touch on several things that will be taken into consideration about your character when you start your IPO. If you're sorely deficient in any of these, you might want to consider improving them. Keep in mind that an IPO that fails to get off the ground due to trust reasons can have a negative impact on your future prospects. Also consider whether you really need to create a public IPO. If you're really new it might be better to train those trade skills up, learn the ins and outs of the game, increase your capital, and work on developing a reputation. If you just need a small amount, taking out a loan with one of the established banks is an easy & safe way to get some isk - and paying it off will help your reputation at a later date.

Here are some things that will reflect well on your character:

Seeing a "main." ie, a character that is clearly not a 3-month old throwaway alt made for the sole purpose of scamming.

- Full disclosure. Disclose your alts. If you're unwilling to disclose this, most people will assume you have something to hide (such as a known scammer for a main.) Investors don't care if your main is a pirate – they only care if your main is trustworthy.

- Standings. It means you've done some mission running (means you used your character/also means your character is capable of missions) and these standings are good for trade, too.

(cont...)

Kushion
Anti Sweden Defense Force
Virtue of Selfishness
Posted - 2008.01.27 07:35:00 - [2]
 

Edited by: Kushion on 27/01/2008 21:12:50
Edited by: Kushion on 27/01/2008 07:36:52
- Standings. It means you've done some mission running (means you used your character/also means your character is capable of missions) and these standings are good for trade, too.

- In-eve.com verified skills. If you can't provide this, you probably won't have a very good shot at getting funding. It confirms that are actually putting sp into the character, and will prove your claims (i.e, if you say you have a freighter pilot, but in-eve doesn't show freighter skill...)

- Contract history. A character that claims to be a trade guru but has never used a contract probably won't be taken too seriously.

- Forum history. Posting in M&D regularly for an extended period of time will let others know a bit about who you are and further reinforce the perception that this isn't just some alt you use. Post a bit, ask questions, make some contributions. Don't let your first post be “give me money!” Waiting to ask for funding until your avatar isn't an exclamation mark is probably a good idea, too.

- An API audit. If you're new and can't offer security, this is your best shot at being taken seriously. It's the best way of proving everything you say. Your ability to make isk, your skills, etc. Just be sure to find a trusted 3rd party to do the audit. An older, better established character may not need to do this, but if you've got nothing else to offer...

- A voucher. Find someone respected to vouch for you. It can be hard to do, but a single voucher can tip the scales. Don't have anyone respected to vouch for you? Start looking for someone. Establish relationships, find business partners. It pays off in more ways than one.

- A corp and a history with that corp. Being in a well-respected corp with some important roles & members who will vouch for you will say something about your credibility. Chances are you won't want to risk your corp standing with a scam on your main, so this gives you something to lose, and will count in your favor when you make your IPO.

- Isk. This is a big one. Money makes money, and convincing others that you know how to manage it is imperative. If you've got 20m in your wallet and you're asking for 50b in your IPO, well, don't expect investors to jump all over it.

- Assets. Even assets you can't put up as collateral will increase your e-cred. If you have them, mention them, and show proof of them. A character with a freighter and a hisec POS looks better than one with nothing of value.

- Attitude. You will be asked a lot of questions about your IPO; some of them may seem harsh. Don't take it personally, and don't lash out. The investors want to make 100% sure you're not a scammer, and if they see any inconsistencies, they won't go easy on you. They're very protective of their isk. The way you handle difficult questions says a lot about your character, and you will be judged by this.

- Collateral. This can be hard to acquire if you're new, but it's a worthwhile investment. Even if it doesn't come close to covering the entire investment, it says that you're at least making an effort, and have the isk to afford collateral. And it'll cover some of the loss if things go bad – which makes investors happy.

Your IPO is linked to what people thing of your character, but it's not entirely the same thing. Here are a few things that will reflect well on your IPO:

- A plan. This is the most important thing. E-trust aside, the investors aren't investing in you because they like you - they are investing in you to make money. If your plan is inconsistent and unrealistic, it won't matter how trusted your character is. A detailed in-depth plan that shows you know what you're talking about is a must. And for the love of god, don't mess up your math in the first post. That's got to be one of the most embarrassing things you can do...


Kushion
Anti Sweden Defense Force
Virtue of Selfishness
Posted - 2008.01.27 07:36:00 - [3]
 

Edited by: Kushion on 27/01/2008 07:39:48
- An "oh ****" plan. If you're new, it's more likely that things will go wrong. And if you can't put up security, the potential for a complete loss is very real. So have a good backup plan that will convince both the investors and you that it won't be a total write-off if it fails.

- A 3rd party in a director role that can audit or liquidate assets if you disappear. Great way to reassure investors, and you might get some useful help out of it, too.

- Numbers. Don't just say you've done the math - do the math. And show it.

- Don't ask for a huge sum of ISK. Something small and reasonable to start out. If you're less than 3 months old, you shouldn't be asking for 50b in your first IPO.

- Did I mention a plan?



One of the biggest things is consistency. If everything you say "fits," investors may be willing to take a risk on a newer character. If you make claims you don't back up, or say things that don't make sense from a business perspective, expect to be shot down. In the end, the best thing you can have is experience and a reputation. However, a new character can still get funding with a good IPO if there are no red flags. Investors are a fickle bunch, and easily frightened. Be honest, be polite, and develop your reputation before asking for isk.


Notes: If anyone has anything they see missing and would like me to add, please let me know and I'll put it in. If you have any services to offer in regards to this (such as auditing) please post them here, and I'll put them in too.

Kushion
Anti Sweden Defense Force
Virtue of Selfishness
Posted - 2008.01.27 07:37:00 - [4]
 

Reserved.

jongalt
Posted - 2008.01.27 09:15:00 - [5]
 

nice work.

-jg.

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2008.01.27 11:30:00 - [6]
 

I endorse this product and/or service.

Hexxx
Minmatar
Posted - 2008.01.27 16:12:00 - [7]
 

This is a quality post and deserves a sticky. The author did a superb job in assembling alot of disjointed information that is rarely published with such clarity.

Bravo on a good write up and more importantly; keen observation skills.

Dunpeal
Caldari
M'8'S
Posted - 2008.01.27 21:09:00 - [8]
 

Originally by: Kushion
- Attitude. You will be asked a lot of questions about your IPO; some of them may seem harsh. Don't take it personally, and don't lash out. The investors want to make 100% sure you're not a scammer, and if they see any consistencies, they won't go easy on you.


"and if they see any consistencies" is it just me or this a typo, shouldn't it be "inconsistencies"?

Other than that, good read, and hopefully good advice for those out there reluctant of starting their own non scam IPO.

Good work! Stickie plz ugh

Takimi Star
Posted - 2008.01.27 22:44:00 - [9]
 

Originally by: Dunpeal
Originally by: Kushion
- Attitude. You will be asked a lot of questions about your IPO; some of them may seem harsh. Don't take it personally, and don't lash out. The investors want to make 100% sure you're not a scammer, and if they see any consistencies, they won't go easy on you.


"and if they see any consistencies" is it just me or this a typo, shouldn't it be "inconsistencies"?

Other than that, good read, and hopefully good advice for those out there reluctant of starting their own non scam IPO.

Good work! Stickie plz ugh


I think you are right.

I have to agree.. as a new player this was a greatly informational read.

Ulstan
Posted - 2008.01.28 22:24:00 - [10]
 

Superb post. Deserves a sticky for sure.

Letrange
Minmatar
Red Horizon Inc
Cascade Imminent
Posted - 2008.01.28 22:54:00 - [11]
 

<applause>

You may want to add:

- Do a dry run of most situations

Some of the interface elements are a little arcane the first time you set something like this up. The theory may be out there but if you've never done it before you may want to go thru how to use the interface to do certain things. Learning A to Z how the share mechanic works in all situations is a good one.

Chomin H'ak
Integrated Takeovers
Posted - 2008.02.02 04:51:00 - [12]
 

Brilliant. Without a doubt the best advice I have gotten. We will strive to use this model on our second and further ventures. Thank you.

And yes, this really needs stickied, for the seller AND the buyer.

CCP Mitnal


C C P
Posted - 2008.02.02 19:20:00 - [13]
 

Cleaned

You may have noticed that not only has this been stickied but the essential threads thread has been updated.

To get a thread stickied usually entails the original poster both asking in the thread and emailing mods@ccpgames.com, however, on occasion, we will accept one of those methods.

Contrary to popular belief I do not have a pyramid quoting tingle, I do have spider sense though.


 

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