Business And Economy Archive

Thread: Template for becoming a SWG VEnture Captialist

Kinshi
Mon Aug 08, 2005 1:14 pm
#1

I touched on this idea in another thread about loan companies.


Basically rather than trying to loan money to every deadbeat in the game and having them rip you off, I mentioned that one could feasibly invest in up and coming crafting/merchant operations and rather than earn money on simple interest, you would have an ownership stake in the business and entitled to a % of its profits.


Heres how it works, first off you want to have a LOT of credits pooled up because you dont want to invest in just one crafting operation, also you dont want to invest in a shop thats no yet open. You need to find a shop that has already opened and is looking to grow. (because lots of people will dabble, and you dont want to offer money to dabbler who will quit before you make your money back.)


So you may want to invest in a shipwright, a AS, a weaponsmith whatever. A whole portfolio of SWG businesses.


Next you need to require a plan from these people. THis is what separates the winners from the losers here. IF a aspiring merchant has a business plan, then you have something to work with. It shows they may have the competence to make money off the business. NO plan = no money.


Now you have a aspiring merchant who has a business plan, next you need to review his operation, check his location and current offerings (it helps to have been a crafter/merchant yourself so you know what to look for and have usefull advice to offer) IF his spot looks decent, and his stock looks decent as well now you can start talking money.


A competent merchant will have a decent idea of exactly how much money they need to stock their vendors, so if you get a merchant who goes "/shrug, I dunno" pass them by. IF your merchant knows what his costs are going to be, and knows what he needs to financially to launch the business, you have a go.


Now for the nitty gritty, the part the makes sure YOU get your money as a SWG VC


SInce you are taking a ownership stake in the business, your merchant shoudl be providing you with all the monthly dumps done /w /mailsave and Merchant's Friend. That way you know exactly what the revenue stream of the business is like, and exactly how much your cut is going to be.


THe merchant should be able to provide you with the operating costs (maintenance fees, resource costs) so the actual profit can be determined. Thats the value you get your cut from, the profit.Have the merchant /tip this amount you on a schedule you both agree on like once a month or every other week, whatever. Use /tip becasue that makes a 'paper trail' and gives you both receipts.


THis is better than being a basic bank loan because the possible rewards are much higher. Its also different because it is more of a gamble because the business could tank.


You can secure your investment to a degree by requiring the goods to be sold by merchants you control, or out of buildings you own and/or require the merchant to keep extra inventory stored in a warehouse you control.


Keep records of how much money you put in and how much money you get back out so if the merchant wants to buy you out at some point, he has a price. YOu need to know what your investment is worth.


ALso this is just a template, not the step by step on how to do VC in SWG. But its a lot more secure than simply loaning money and it weeds out 99% of the deadbeats and screwoffs.




bluejanus
Mon Aug 08, 2005 5:02 pm
#2

The reality would be a lot less cooler than the title.





Isander Aperin - Kettemoor Master Architect (home: Serenity, Naboo)
Structures vendor in the HorkCo Shop near Coronet, Corellia (CLOSED)
Structures vendors in the Mos Mesric Mall near Mos Espa, Tatooine (CLOSED)
Structures, jedi kit, crafting station and resource vendors in Serenity near Kaadara, Naboo (CLOSED)
Poldano
Mon Aug 08, 2005 5:36 pm
#3

I have to agree with bluejanus on this. It sounds to me like a template for obsessive misery. But, maybe some people like micro-managing other people who just want to have fun.


If you have a pile of money already, it seems to make more sense to take the retail merchant role in the system. Buy wholesale from crafters you invested in. Check the bazaars frequently to see if they are cheating you by selling on the open market before they fulfilled their bargain. This gives you some degree ofcontrol, by allowing you to control the future revenue to the wholesalers.


Saego, Wanderhome
Kinshi
Thu Aug 11, 2005 9:40 pm
#4


LOL Obssesive Misery..such drama



When you have that much money, why bother with being a merchant?



Firstly, you arent looking for a bunch of yutzes who want to dabble. You are looking for the next Mega-Mart operator who has ambitions of running 100 harvesters and 12 guildhalls crammed with merchants, the guys who have the potential to bring in 10's of millions of credits a day. And you get a cut of that and all you had to do was front some of the startup cash.


It isnt for everyone, this is for people who want top become large operators fast, and fact is with some of the old mega-crafters leaving, its leaving vacancies for new mega-crafters to come in.


And you think its micromanaging, hardly, If you chose the right outfit to fund, really all you have to do is wait for the monthly /tips. Either you get paid or not, its still a gamble but VC is a gamble. You are gambling that your trust is well placed and that the people you funded will perform like they say they will.


ALso if you are at the stage where you have so many credits to burn, why not spread the wealth around and get some businesses off the ground?


BEsides, the current mega-mart operators didnt get where theya re by being stupid with their credits. They had well thought out ideas about how they were going to run their businesses and they keep track or their expenses and revenues using the various tools that are out there.


Sometimes really good ideas and really good businessmenget buried due to lack of money, and when runing a business, having cash on hand for the rough periods is a must for survival.






Pappi
Thu Aug 11, 2005 11:58 pm
#5



Kinshi wrote:
When you have that much money, why bother with being a merchant?

well, because being a merchant is the fun part? I have enough money to retire and not worry about my finances ever again (providing I don't go around making million dollar purchases all the time), but running a shop is fun.

nowaday it's not hard to get the money to start a business since there are plenty of easy ways to earn money. some of them don't involve combat skills (such as JTL content), and you can have fun while working.




stupid_people_happen . .
Pappi Inc Tailoring (home of the black tax) - Odi's meds and chef tissues - closed
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DigitalOne
Fri Aug 12, 2005 12:41 am
#6

Obsessive misery 4 the win!
bluejanus
Fri Aug 12, 2005 12:12 pm
#7

Well the idea of venture capitalism is making your money work for you. Running a huge business with lots of harvesters is not venture capitalism. Venture capitalism is investing in projects like that with some seed money and getting either a portion of the profits or some determined amount.





Isander Aperin - Kettemoor Master Architect (home: Serenity, Naboo)
Structures vendor in the HorkCo Shop near Coronet, Corellia (CLOSED)
Structures vendors in the Mos Mesric Mall near Mos Espa, Tatooine (CLOSED)
Structures, jedi kit, crafting station and resource vendors in Serenity near Kaadara, Naboo (CLOSED)
bluejanus
Fri Aug 12, 2005 12:14 pm
#8



bluejanus wrote:
Well the idea of venture capitalism is making your money work for you. Running a huge business with lots of harvesters is not venture capitalism. Venture capitalism is investing in projects like that with some seed money and getting either a portion of the profits or some determined amount.



But managing this would be rather hard. Need to track sales of the beneficiary of the investment and calculate and collect the profit cut. Need to find people willing to do that, since consignment vendors don't exist.

Consignment vendors incidentally would allow franchising.





Isander Aperin - Kettemoor Master Architect (home: Serenity, Naboo)
Structures vendor in the HorkCo Shop near Coronet, Corellia (CLOSED)
Structures vendors in the Mos Mesric Mall near Mos Espa, Tatooine (CLOSED)
Structures, jedi kit, crafting station and resource vendors in Serenity near Kaadara, Naboo (CLOSED)
Hurlobacca
Sat Aug 13, 2005 6:40 am
#9

Since there is no protection against nor penalty for someone not honoring your investment in their enterprise, the simple solution is to only consider this type of venture when that player has sufficient collateral to secure a reasonable portion of the loan.



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mattos90
Sat Aug 13, 2005 12:01 pm
#10

Im always reluctant to do player-created things in this game, such as loan companies, and being a "Venture Capitalist", seems like there are too many risks. Id rather invest in starting my own new businesses.



Lerno
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