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Adnan Voss
The Orthography Commandos
Posted - 2008.11.10 09:08:00 - [1]
 

I want to run an IPO, just for the experience. I think it will be a big challenge, but I don't want the flotation to be the usual parade of grief! So can anyone give me some pointers for making my IPO idiot proof?

I'll be buying low in a few regions, and selling high in one region I've identified. I could take part in other markets, but I want to have a single business plan.
My account was inactive for a long time, I currently have 6 million skillpoints.
I want to keep the initial fund small, ideally I'd ask for 50 million ISK, and limit the offering to one share per person. My challenge then is to see how much can I grow this business.
I can offer security in the form of researched cruiser BPOs.
I intend to own 51% of the business myself, that will be my stake, and the dividends will be my income.

I realise this is 'low end' offering, and not worth the time for most people, but as I said, I'd do this for the experience, the initial scale of the operation isn't important to me.

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2008.11.10 09:28:00 - [2]
 

Edited by: Bad Bobby on 10/11/2008 09:36:09
Originally by: Adnan Voss
I want to run an IPO, just for the experience. I think it will be a big challenge


I started mine for the exact same reason. I wish you the best of luck!

Originally by: Adnan Voss
I want to keep the initial fund small, ideally I'd ask for 50 million ISK, and limit the offering to one share per person.


Limiting the number of shares each person can have may be bad for this particular IPO. Because the IPO is very small you may find it difficult to get enough interested investors to take all the shares.

Alternatively, if you offered up the whole 50m with BPOs as security then I would happily hand over the whole 50m and hold your BPOs at one of my POSes so they can be researched/copied etc for the duration of the IPO.

In fact, provided you disclose the BPOs here so I can appraise their value then I'd be ready to go ahead with this straight away.

You'll need to disclose the per-share value. Are we talking 1m per share?

I see you want 51%, are you putting up any isk for the operation or is it just the BPOs?

When it comes to dividends, will you be paying out 100% of your profits?

How often will you pay out? Monthly, weekly?

Adnan Voss
The Orthography Commandos
Posted - 2008.11.10 09:32:00 - [3]
 

That's cool, but one thing I want is to make this really 'public.' I can't control what happens to the shares after launch, but I'd wait a while to see how many I can sell. Then there's alts of course...

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2008.11.10 09:42:00 - [4]
 

Fair enough. The offer will remain open. I'd be happy to act as a trusted party to hold your collateral regardless of how the shares are split.

I'd suggest you get the hard details down, so that you can start selling off shares.

Adnan Voss
The Orthography Commandos
Posted - 2008.11.10 09:47:00 - [5]
 

1 million ISK per share would be my plan. I would then match public funds with my own ISK.

YouGotRipped
Ewigkeit
Posted - 2008.11.10 09:54:00 - [6]
 

Edited by: YouGotRipped on 10/11/2008 09:55:22

Being able to provide collateral is certainly a plus, however an audit should still be performed.
I believe Shar (one of the two established auditors) is experiencing some RL problems at the moment, so please contact Kazuo Ishiguro as soon as possible.

The link in my signature will provide you with additional details.

ofstrife
Posted - 2008.11.10 10:21:00 - [7]
 

Going along with this being a training IPO, would it be a good idea to start training another auditor? As far as I know, there are only two trusted auditors around (Shar and Kazuo), and if Shar is having personal problems, that puts a larger load on Kazuo. In any case, it's probably better to have at least a few (meaning three or more) auditors in case of RL issues or a large number of IPOs.

Also, would it be a good idea to have a larger amount of smaller investors for this IPO to train investors? For a low-risk thing (the OP seems trustworthy because he's not asking for much and it's a small amount of ISK for an IPO), something like that doesn't seem like such a bad idea. For example, block EBANK, Dynasty Bank, cosmoray, YGR, and other MD big fish from investing to allow new people to invest.

One small thing, if you're limiting it to 1 share per investor, you might not want to set the share price at 1mil, since having 50 separate investors might be a little hairy. Then again I don't really know what I'm talking about since I've never dealt with shares before.

EBANK Ricdic
Eve-Tech Savings n Loans
Posted - 2008.11.10 10:45:00 - [8]
 

All corps start with 1000 shares. To make it simple have a 100m IPO. Sell a share for 100k. Allow a maximum of 10 shares per person (1m). This allows you a minimum of 100 investors. You won't need security or collateral on a 100m operation.

I would enjoy investing in an op like you suggest as I like watching people challenge themselves and the likes. Also a running log would be awesome or even a sexy wallet transcript that could be checked out at the end to see how you succeeded (or failed).

I am all for it.

Ami Nia
Posted - 2008.11.10 10:46:00 - [9]
 

Edited by: Ami Nia on 10/11/2008 10:54:11
Originally by: ofstrife
Going along with this being a training IPO, would it be a good idea to start training another auditor? As far as I know, there are only two trusted auditors around (Shar and Kazuo), and if Shar is having personal problems, that puts a larger load on Kazuo. In any case, it's probably better to have at least a few (meaning three or more) auditors in case of RL issues or a large number of IPOs.
One of the problems here is that the auditor should be him/herself a trusted member of this community. And that is not really something that requires training.
Originally by: ofstrife
Also, would it be a good idea to have a larger amount of smaller investors for this IPO to train investors? For a low-risk thing (the OP seems trustworthy because he's not asking for much and it's a small amount of ISK for an IPO), something like that doesn't seem like such a bad idea. For example, block EBANK, Dynasty Bank, cosmoray, YGR, and other MD big fish from investing to allow new people to invest.
I agree that 'regulars' should refrain from investing and leave space for smaller investors. At least unless it turns out that there are no smaller investors that are interested ;) In this latter case ... I guess it would be best for the OP himself to lift the investment limit as any regular will probably will be more willing to be involved if it can cover much more than 1m.
Originally by: ofstrife
One small thing, if you're limiting it to 1 share per investor, you might not want to set the share price at 1mil, since having 50 separate investors might be a little hairy. Then again I don't really know what I'm talking about since I've never dealt with shares before.
The way I see it, if this bond (it's a bond not an IPO, because it's time limited) uses corp shares to distribute dividends, the number of investors is mostly a burden when initially receiving the money and distributing the shares and then at the end if the OP wants the shares back. It is a bigger problem to only handle it with 50 shares as, I think, a corp comes to existence with 1000 shares.

My suggestion to the OP, in any case, would be to handle this as 1,000 shares valued 100,000 isk each. Keeping 500 shares for himself and offering the others. Limiting offers to minimum 10 shares and maximum 100 shares. This should make things easier to handle and ensure he gets at least 5 investors, while still allowing for an entry point at 1m isk.

edit: I see Ricdic touched on the same point. However he suggests a larger IPO (all shares offered). Must be noted that the OP does not need to keep shares for himself to ensure his own "salary": all he needs to do is distribute as dividends only 1/2 of the actual gains.
I too agree that 100m would be a better initial capital. And that it should not be too difficult to rise it, even without collateral.
I do not agree with Ricdic idea of having a minimum of 100 investors: it may be hard to find that many. I stand with my idea of limiting investments to between 10 and 100 shares per investor (minimum 10 investors for a 100m offering).

EBANK Ricdic
Eve-Tech Savings n Loans
Posted - 2008.11.10 11:37:00 - [10]
 

Well the OP can always buy the shares he wants for himself (whether it be 50% or 5% of the total amount). But this way it gets plenty of people invested as I believe that's what the OP wants. I don't think it would be unreasonable to find 100 people to invest in his little operation. A post on here would pull in about 60 and the rest could be pulled in via the WTS forums. However this does cause extra administration moving shares around initially.

It's up to the OP how he wants to run his project really. It's only a very small amount so it's his call.

Dagda Morr
Evolution
The Initiative.
Posted - 2008.11.10 11:58:00 - [11]
 

Edited by: Dagda Morr on 10/11/2008 12:46:08
As a new and very cautious investor I'll happily back a "low-end" investor.

Put me down for however much you are willing to allow a single investor, up to 10 mil. Once you have the fine details worked out and announced evemail me and I'll send ISK

Out of interest, if you are treating this as a training IPO, I would like to know the details on how your BPO will be used as security and what audit structure you will be putting in place?

Whilst the size of this IPO probably may mean you feel it doesn't require a full audit, if you are using it as a training exercise you should be aware that this is standard practice.

winthrowe
Gallente
Node Alpha Defense Research
Posted - 2008.11.10 12:29:00 - [12]
 

I would be interested in trying my hand at investing in a 'training' IPO. I've lurked here for a while, and this seems like a good place to dip my toes in. I will await confirmation from the OP as to how the shares will be structured exactly.

Sal Panucci
Posted - 2008.11.10 12:35:00 - [13]
 

I'm interested as well.

I'll try to keep an eye on this thread, but if I miss the start of sales of shares please evemail me.Very Happy

Estel Arador
Posted - 2008.11.10 13:19:00 - [14]
 

I don't think going with a low limit on shares per person initially will be a problem; the limit can always be raised later on if it turns out there's too little interest.
Convincing enough people to invest would be part of the 'training' too.

CornerStoner
Posted - 2008.11.10 13:20:00 - [15]
 

I'd be interested in this IPO as well.

I also encourage you to donate 1 share to ESEXB. Your performance will be tracked via dividends and will be available as a reference for future expansions/IPOs. Your corp would also receive dividends from ESEXB.




Cagir
Rekall Incorporated
The Fendahlian Collective
Posted - 2008.11.10 13:53:00 - [16]
 

I like the idea and i'd be willing to invest the max amount in this idea.

Rehtom Lamina
Hounds of Helll
Circle-Of-Two
Posted - 2008.11.10 14:02:00 - [17]
 

I am also intrested, if this goes ahead please let me know.

TheVad
Amarr
Metalworks
Posted - 2008.11.10 14:56:00 - [18]
 

Originally by: YouGotRipped
Edited by: YouGotRipped on 10/11/2008 09:55:22

Being able to provide collateral is certainly a plus, however an audit should still be performed.
I believe Shar (one of the two established auditors) is experiencing some RL problems at the moment, so please contact Kazuo Ishiguro as soon as possible.

The link in my signature will provide you with additional details.



An audit is not justified in this case. The audit will cost as much if not more then the entire IPO. Collateral worth 50m is just fine in my opinion. If one of the trusted auditors wants to audit him for free, then cool. Lets encourage people to get into industry profession not discourage.

TheVad

Dealema
Posted - 2008.11.10 15:18:00 - [19]
 

Perhaps one could convince an auditor to do some pro bono work? Taking into account the nature of the IPO?

I would be interested in investing.

Ishikari
Posted - 2008.11.10 15:24:00 - [20]
 

I would like to invest as well. Send me an evemail when you are ready to start up and I will get the isk over to you.

General Yassir
Posted - 2008.11.10 15:29:00 - [21]
 

I'd happily invest in this, put me down for 1 mil in shares. I may try something like this my self just as a test. (My first IPO i invest in Shocked)

Vherinda
UNSPONSORED TRADE INC.
Posted - 2008.11.10 15:51:00 - [22]
 

if collateral can be put up, i'll happily invest in this. give me a mail when u have decided on how many shares, price and limit per person.

Bad Bobby
The Dirty Rotten Scoundrels
HYDRA RELOADED
Posted - 2008.11.10 16:36:00 - [23]
 

Edited by: Bad Bobby on 10/11/2008 16:37:33
Originally by: Dealema
Perhaps one could convince an auditor to do some pro bono work? Taking into account the nature of the IPO?


I was under the impression that Kazuo does not charge for his audits.

I don't think an audit is really needed provided the IPO is fully secured with collateral held by a trusted party. That said, I can see why one would be desirable in the interest of 'training'.

I'm happy to buy in for any amount provided collateral is provided.

YouGotRipped
Ewigkeit
Posted - 2008.11.10 16:43:00 - [24]
 

Edited by: YouGotRipped on 10/11/2008 16:49:35
Originally by: TheVad


An audit is not justified in this case. The audit will cost as much if not more then the entire IPO. Collateral worth 50m is just fine in my opinion. If one of the trusted auditors wants to audit him for free, then cool. Lets encourage people to get into industry profession not discourage.

TheVad



As far as I know, Kazuo Ishiguro performs audits free of charge. New IPOs / bond offerings aiming to raise a low amount of capital should be exempted from paying fees anyway.

However, I believe that submitting a permanent API key does not present an insurmountable barrier for the entrance in the industry branch, while the potential benefits make it more than worth it.

Random checks could be performed to establish that the dividends are indeed derived from trading(/whatever the focus of the offering) and the managers in question are justified to launch a another offering linking the previous one as a guarantee of their integrity/trading proficiency.


Dagda Morr
Evolution
The Initiative.
Posted - 2008.11.10 16:48:00 - [25]
 

Spot checks rather than an audit might indeed suffice - and could prove usefull in establishing a reputation if the OP is intersted in running future schemes.

YouGotRipped
Ewigkeit
Posted - 2008.11.10 16:58:00 - [26]
 

Edited by: YouGotRipped on 10/11/2008 19:54:03

Originally by: Dagda Morr
Spot checks rather than an audit might indeed suffice - and could prove usefull in establishing a reputation if the OP is interested in running future schemes.


Yes, the only problem is that the IPO manager upon completion of his training offering already amassed some (uncertified) reputation and that could determine some MD members to (re)invest irrespective of the fact that an audit has yet to be performed.

Thus, he could be just another scammer paying divs that are not derived from the stated focus of the offering, with the sole purpose of cashing in at a later time.

I stand by my recommendation that an audit should be performed. Also, I urge the community to seriously consider the perspective of adopting "permanent API keys" as means of dealing with the scammers problem once and for all.

Dealema
Posted - 2008.11.10 17:30:00 - [27]
 

Originally by: YouGotRipped
Edited by: YouGotRipped on 10/11/2008 17:21:04

Originally by: Dagda Morr
Spot checks rather than an audit might indeed suffice - and could prove usefull in establishing a reputation if the OP is intersted in running future schemes.


Yes, the only problem is that the IPO manager upon completion of his training offering already amassed some (uncertified) reputation and that could determine some MD members to invest irrespective of the fact that an audit has yet to be performed.

Thus, he could be just another scammer paying divs that are not derived from the stated focus of the offering with the sole purpose of cashing in at a later time.

I stand by my recommendation that an audit should be performed. Also, I urge the community to seriously consider the perspective of adopting "permanent API keys" as means of dealing with the scammers problem once and for all.


Hear Hear!

Hell if we wana go all out with the "training IPO" idea, why not have a new auditor do the audit, and have his/her work checked by a respected auditor.Razz

Ami Nia
Posted - 2008.11.10 18:37:00 - [28]
 

Originally by: Dealema
Hell if we wana go all out with the "training IPO" idea, why not have a new auditor do the audit, and have his/her work checked by a respected auditor.Razz
As I wrote already, this is a good idea but the "new auditor" should be someone that has a solid reputation otherwise his/her future audits would not be very meaningful regardless of how good he/she can do the auditing. At least that's my opinion.

Redbad
Minmatar
Sebiestor Tribe
Posted - 2008.11.10 22:41:00 - [29]
 

reserving 1 mil. in shares, pending audit.


Karanth
Gallente
RONA Corporation
RONA Directorate
Posted - 2008.11.11 00:21:00 - [30]
 

No problem offering 1mil for this, audit or not. It's just 1mil after all.



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