Discussion - investment scheme

What would you guys think if I said I was setting up a public mutual fund?

Now that nearly all my characters have completed their builds, I'm thinking of running an investment scheme. I don't intend to make any money for myself on this, and will be doing this for fun. I'll solicit investments, play the market and pay out dividends. After a certain period of time, perhaps 2-3 months, the fund will close and all money will be repaid to investors.

Obviously, farmers and established marketeers wouldn't benefit from this scheme - it's too much hassle for too little return. This would be for those players who aren't rich and don't have the inclination to play the market, but still want to profit from it.

The business plan will be to craft and sell high-end Pool A and C IOs. From my experience, this is a more reliable, if not very spectacular, source of income than flipping recipes. The profit margin varies from 25% - 50%. I need to start recording sales to be able to give an accurate turnover rate.

What return on investment do you think is feasible? How often should dividends be paid out? Investors will need to collect their money from me in person, so paying out often will be troublesome, but if a long time goes by without any results people will be rightfully concerned.

There is always the risk of people being scammed, or that I won't be able to log in and pay investors. All I can think of to minimize this risk is to put a sum equal to the investment in a neutral 3rd party to hold in escrow. If i default, the 3rd party can then refund investors.

At this point, there are no concrete plans (yet). I'm just gauging interest and looking for opinions.

We were just talking about starting a Ponzi scheme in the Eeebil Marketeers Group, but we figured nobody would go for it. Let me know how it works out for ya tho, I'd be interested to see!

Yah, but I am (if I decide to go ahead with this) serious, not running a ponzi scheme - and how profitable would a ponzi scheme be, anyway? There is no money to be had in cheating poor people.

Maybe I didn't make it clear - I'm not interested in scamming or anything unethical.

Selling market "secrets" sounds interesting, but I don't have that many to sell. I suppose I could try to run a service where I find and research crafting niches.

At the core, this isn't about making money for myself. This is about pretending to be a fund manager while (hopefully) helping a few people buy enhancements they want. I've always enjoyed the market side of the game, and now that my build goals are all mostly achieved, it gives me a reason to play the game other than making #9 posts at the end of every issue.

I'm in. I certainly have the funds to spare--I'm more curious to learn more of the mechanics and quirks of the game/market/players.

I'd say keep your initial group of investors small to start with. A test group to work out any kinks. Have a scheduled pay out time for dividends set up, for example, every other Friday at 9:00pm EST or something. Those are just a couple of ideas that might help.

My questions for you would be, “What server?” and “What are you thinking would be a reasonable minimum investment?”

If you really want to impress me, start a bank.

WARNING: I bold names.

I'd be willing to put some funds in too, if too much isn't needed to start things. I'm definitely one of the common joe types who doesn't understand the specifics of the market (espcially investments) but like DumpleBerry I've been curious about the finer points of the market ever since I started reading the market forums.

I figure this'll either be a good way to learn something, or a quick way to lose a fair chunk of change (from my perspective).

t will definitely be blueside, with news of Going Rogue on the horizon. I'm tempted to say Virtue (my home server), but if most people interested are on another server (Freedom?) I'd consider that, too.

I'm tentatively considering a small group of 3-5 investors, with dividends calculated after Monday maintenance ends, so that I can hand out the money from weekend sales. I'm not sure yet whether there should be a seperate time scheduled for everyone to show up and collect their money. I'll also write a weekly report to be posted here, detailing the fund's performance.

I want to keep the initial investment small, to make it accessible to less wealthy players and to reduce the risks players face. (Like COTCaveHater said, influence isn't really a limiting factor - time and slots are - so I don't see the need to ask for vast sums of money either.) I think a good plan would be a fixed amount of 1m influence per player, no more no less.

Finally, I'm sorry if I disappoint, but I'm not really certain what, if anything, you'll be able learn from this venture since I don't plan to disclose exactly which items I'm buying and selling. For the most part, it will be pretty standard market play, except using other people's money instead of my own. Actually, now I'm curious; what do you think you'll learn from this?

Honestly, I'm not sure if there's anything to learn from it either, but I'll keep my mind and eyes open to see what I can pick up.

Although, I am interested how money becomes more money and how it's determined to be divided among the investors and the acting party. Like I said earlier, I don't know very much at all about investing stuff so anything I do learn is something more than nothing in the end. Even if it's standard market play, then at least it's something I can say I've done someday.


Also, if you choose Virtue, I could easily go along with that as it's my second home server and one million inf won't be much of a risk at all.

I would assume the you would start a band new toon that basically wouldn't leave atlas park/a base or steel canyon, just so you could track the numbers better. i.e. start with 5 million end up with 10 mill by the following week, easy numbers...

and really if you were skimming some off the top for personal profit isn't that how banks stay in business and pay their employees? does it really matter to the investors all that much as long as they get their weekly check?

if you are serious and the buy in is gunna be as low as a mill, I may be interested in investing, on virtue

I am willing to throw some money your way "think of it as a small start up inventment". I have the funds to take a risk. If you decide to go forward just shout out the particulars.

I've had an idea how you could pay your dividends without needing to meet up with your investors... see this thread (click)

I have to say that I'm almost...disappointed at the initial investment amount. I can supply <redacted> on Virtue (my home turf as well), so 1M won't even be noticed.

As for "skimming," I really have no problem with you receiving equitable pay for handling my investments.

I have a couple poor toons I would be interested in this with as well. Been playing the market with them (but not making a killing just a nice small profit each time I log in)

I'll keep my eyes on this thread

Summary

This is a closed fund to invest in the crafting and sale of high-end Pool A and C enhancements.

This is on Virtue Server, for heroes only.

This fund will run for 10 weeks, from 17 August 2009 to 26 October 2009 after which it will be dissolved.


Business Plan

The business plan is to craft and sell expensive Pool A and C IO Set enhancements.

This is a low-risk, medium-volume market that provides reliable income. It is reasonable to expect profits of 6m-10m per enhancement (my target figure being 8m), and a sales volume of 20-30 enhancements a week. Therefore, I project total profits per month to be between 640m and 960m once we have achieved full production capacity.

There will be two phases to this plan. In order to produce 20-30 enhancements a week, we need significant capital that cannot be raised through investments alone. This money is needed to bid on raw materials, pay listing fees, experiment with new niches and provide a safety buffer should something go wrong. Therefore, at first the focus will be on growth, and secondary markets (such as flipping salvage and crafting of low end Pool A enhancements) may be tapped to bolster income. During this time all profits will be reinvested and no dividends will be paid out.

Once enough liquid funds are accumulated (the minimum acceptable is 200m, but much more may be required depending on the niches being targetted), income stabilizes; at this point the fund is mature, production is at full capacity and profits will go entirely to dividends. It's hard to say how much time will be needed to achieve this phase, since it depends on the amount needed, the items being produced and the performance of other market activities we use to get there. My target is to reach this phase within 2 weeks.


Disclosure of Risks

There is a risk that changes to game mechanics will kill the crafting market or severely and drastically reduce profits. In such a case, assets will be liquidated and money divided between investors.

There is a risk that I will abscond with investments and/or profits, or be unable, for whatever reason, to be able to log in, or dishonestly report performance or assets in order to scam. Upon contacting you to collect your initial investment, I will ask you for the name of another player you trust to act as your escrow agent. I will then deposit a sum equal to your investment with him or her, to be returned to me when the fund closes. This way, your initial investment at the very least will be safeguarded. However, there is no way to completely remove the risk of fraud.

I like to believe that no one would go to the trouble of ruining their good name and writing all this for a paltry amount of video game money. Still, I'll be frank and say that if you encounter such a scheme elsewhere it's likely to be a scam. If you have doubts about my trustworthiness, it's best that you don't participate.


Offering Details

To minimize the hassle of hunting down multiple people, as well as avoid spreading returns too thinly, the number of players involved will be very limited. For now, I'll accept up to 6 players. Each will invest exactly 1m per person.

At this point, enough people have expressed interest that I'm not looking for additional players unless one of the aforementioned people drops out.

No new players will be accepted once operations begin. This is to prevent spreading returns too thin, because after a certain level, income plateaus and adding more capital does not increase profits.

Dividends will be calculated (not necessarily collected; you can meet me at anytime to collect your money) on a bi-weekly basis after Monday morning maintenance ends provided that significant profits have accumulated that are not earmarked for reinvestment. Profits will be divided between all investors equally. No management fees are charged.


Exit Strategy

You may withdraw your investment at any time by contacting me.

If the business is no longer viable, all goods will be sold and the money divided between investors.

At the closure of the fund (26 Oct - after 10 weeks of operation) all goods will be sold and the money divided between investors. You have a 2 month grace period from the date of closure to collect this money and any remaining dividends owned to you. If at the end of the grace period you haven't collected your money AND I haven't received any notice from you, I'll assume you have left the game and the money will belong to me.


Launch Process

First, I need the people who have expressed interest above to confirm their interest and agreement with the above proposal. At this point no influence is to change hands yet. This is to allow some time for more discussion and so everyone gets their questions answered, and any disagreements can be worked out.

Once we have agreement, I will post here to arrange to meet players in-game to personally collect money. Once all funds are collected, operations begin. I expect the entire process to be done by the 17th at the latest, giving us a little more than a week to sort things out.

My in-game global is @Laevateinn. All dealings regarding this are to be done through one of my characters, named "Virtue Investments" (plural, without the quotes), Fire/WP Scrapper.

I'm going to throw my name in just on the off chance someone drops. I would have spoken up sooner, but I didn't realize it would be so limited in numbers.

You can have my spot. I don't play enough on Virtue for this to matter that much to me.

If someone does this on Infinity or Freedom, though, I'd be interested.

I was also hoping this might be on freedom. I was going to throw in a million and then see if there was somebody I could give whatever my dividend might have been as an act of charity. Oh well. I am sure there's a lowbie toon in Atlas that could stand to benefit from a little bit of free inf.