Investors...

[dapoangel]

me, if I have the money, I would gladly invest here... sadly I dont have 1000 yet...

 

[wardred]

Edit: this line - The prospectus or offer letter will need to make sense.


So, let's go with a rough figure of 300k from us investors - an average investment of 3k. More may make more sense from Craig's point of view, with some minimum to make sense for him to do this.


We'll call this 25% of OpenPandora. I don't know the fuzzy math that goes into gaging the worth of a privately held company, or an IPO for that matter. Is OpenPandora really worth 500k*4 if you get bigger investors, or only worth 200k*4 if more of us are minimum investors? (Something I should do a little studying on before I invest.)


The whole conjecture changes if you look at investments and/or bonds per project, rather than in the whole company... and bonds are an entirely different beastie than stocks. The other thing that would have to be asked is what happens if a Pandora2 comes out? Or any other hardware project under OpenPandora. All the upfront costs for the Pandora were met by Craig. How much will OpenPandora reserve for itself for operating costs and to re-invest in future projects - meaning less profit for Craig and everybody else. (In this case Craig and Craig's company are two seperate entities. His actual "take home" money is calculated dividends. If OpenPandora the company keeps money for reserves for operating costs, unforeseen events, and to invest in future projects, that's dividends that neither Craig the person or any other investor sees.)


At any rate, back to my conjecture given the Pandora and iControlpad.


CraigX's gets .75 of the profit, and everybody else added together get .25.


So, at least to start, we'll have something that looks like P=.25(A*PandoraProfit(X) + B*iControlPadProfit(Y)) where A is number of Pandoras sold and B is number of iControlPads sold, and X and Y are profit per unit. We want a P > 300k.


Most of the initial investment has already been done by Craig and the team. One slight case mod to resolve the Bezel problem after batch 2, and we should be looking at largely materials costs... I'm I guessing a profit of $5-$10 per iControlPad. So 120k-240k of those would need to be sold to break even, exclusive of the Pandora.


Let's say a profit of $25-$50 for the Pandoras. That's 24k-48k needing to be sold, exclusive of the iControlPad.


Let's take $5 for the iControlPad and $15 for the Pandora, and an even split of profit between the two - each having to make $150k. 120k iControlPads and 40k pandoras need to be sold at this profit to break even.


Somebody browse my math and make sure it makes sense. It's late and I've calculus dripping out of my ears. I've PROBABLY messed something up here. It should look something like this for return on investment. Depending on the margin of both products the numbers swing quite a bit.


When said prospectus comes out, or offer letter or whatever the legal term is, the profit per unit is going to be pretty important. If it's higher for either the Pandora or the iControlPad, then those numbers decrease significantly. This also ignores things like the TV out cables which may be higher % margin, accessories, etc. Simply adding in a $17 dollar T-Shirt with a $5 per shirt profit could skew things quite a bit...assuming no excess inventory. :-b

 

[wardred]

One thing about the minimum number, a lot of people may be willing to put some money out in a "bad" investment just to be part of the team - as long as there's no debt liability. Generally, in the U.S., if the company can't keep up it simply goes bankrupt leaving the investors out of it, assuming everything is handled properly. Don't know if that's true in the U.K.


I know plenty of people who invested in restaurants, for instance, who never expected to see a return on their investment, but did it because they wanted to be a part of cool location X. I'd imagine that some of the people investing in the Pandora will fall into that category - though I can't say how many. Sort of a sure, profit would be good, but my investment allowed OpenPandora to do....whatever it is other than producing more Pandoras that the investors are thinking of. At $1k-$5k I can see some people doing this. Sure, having 2K after 2 years would be nice, but I didn't really invest in the company to have 2k, I invested it to make the company better.


Much more than that from any investor and the prospectus REALLY needs to make business sense.

 

[DaMummy]

youre starting to make this sound like just another product thats out to make money and nothing else, this is where investing crosses the line and why many people have thought that investors are a bad idea

 

[Link]

Once we establish who is interested we will discuss with them more about the terms and conditions, but the potential for profit is very good and obliviously it will be an investment you understand.

I've previously PMd you. Would love to be involved in anyway possible. Look forward to a reply to my PM.


Peace & Pandora,


Link

 

[Mido]

I though we were all "investors" when we placed a pre-order for the Open Pandora device. Not many people like making an investment and not seeing any returns after two years. Personally I waited over seven months and lost around $100 AUD already "investing" in Pandora. I think I'll pass.

 

[wardred]

youre starting to make this sound like just another product thats out to make money and nothing else, this is where investing crosses the line and why many people have thought that investors are a bad idea

Edit: Not sure if you're referring to my posts or Craig's.


Mainly I was playing with numbers, seeing how things broke down a little bit. And I had math on the head after doing my homework. :-b


If I invest it'll be with the same outlook as when I purchased my Pandora - because I have the cash, I believe in the project and want it to do well, and because I believe I'll eventually get a Pandora - or make a little money from the investment.


It looks like the component manufacturing snafus are close to being resolved, this should be a good time to have an influx of cash.


I've seen people invest in restaurants for some of the same reasons I believe people will invest in the Pandora: because they want to see the place do well. The huge profits are a bonus. :-b The one I'm most familiar with failed 3 times. It's on its 4th set of owners, and just barely limping along. A large part of its second bankruptcy was due to it propping up 2 other new restaurants started under the same corporate umbrella that didn't make it. It would've survived on its own, the expenditures for the new ventures killed it. Everybody who invested in the 2nd and 3rd iteration of the restaurant lost all the money they put into it.


I'm sure Craig will give us a more complete run down on things - with something more than Pure Guesswork for the numbers.

 

[BaDToaD]

Personally I just want to support the underdog. I'm not out to make a fast buck. In fact, I think anyone that is out to make a fast buck is being a bit naive. That said, I'd like to make a profit at some point in the future but I'm not worried whether that's in 6 months or 6 years

 

[Lafazar]

I agree completely. I personally don't believe there will be big or fast profits to be had here. But in my eyes that's a good thing, it keeps away the locusts and instead attracts the informed people that support the basic ideals behind the project.

 

[neko]

Let's say a profit of $25-$50 for the Pandoras. That's 24k-48k needing to be sold, exclusive of the iControlPad.

Craig was losing money selling Pandoras for $330, and barely breaking even at $350. $25-$50 profit per unit isn't going to happen unless there is a significant drop in the cost of components, or a favorable shift in currency exchange rates. This could happen, but isn't guaranteed. Need to see some real numbers.


Also I think Craig is vastly underestimating the amount of paperwork that would be involved in trying to raise $100000 from 100 investors at $1000 each. And, except for those in the UK, the investors are underestimating how much hassle this is going to be come tax time.

 

[EvilDragon]

Just to let you know:


We're currently also working on fixing the last issues we had with Batch 1 for Batch 2.


We still hope the production company sticks to their word and all (or at least almost all boards) will be finished on Monday.


But we're better safe than sorry, so we're also looking into other companies who could produce the boards. It doesn't hurt asking, and in case production doesn't speed up, we have some other companies handy.


We're also working on stuff like case, WiFi, Hinge, etc. to improve everything.


We're trying to get an electrosparked case sample (the iCP uses electrospark finish), that might look better than the painted one and doesn't wear off.


While finishing the first batch is the most important issue for us currently, we're also working on improving the situation for batch 2 (and following batches).


The Pandora is a pretty cool device already, but we won't just sit there, we're trying to fix the last small flaws.


And - of course - get a proper production and assembly line, so everything will become predictable and reliable.


We're working on all that, don't worry

 

[WizardStan]

I though we were all "investors" when we placed a pre-order for the Open Pandora device.

No, you prepurchased a product. That makes you a consumer. To that end you have a right to your product or a right to a refund; you have no additional rights in this relationship. Either you continue waiting for the product, or you take a refund, both of which have a fixed cost (presumably, unless you were planning to sell it, but that's a whole different argument).


What Craig is proposing now (again) is actual investor relations which comes with a whole new class of rights, responsibilities, and risks. As a consumer, if OPT goes out of business, you will be one of the first people to be refunded. Technically they'll start at the top of the list and see how far they get, but that group is first (or second, I think outstanding purchases goes first, THEN outstanding sales). Investors stand to make actual money from their investment, but at the same time they're one of the last groups to get paid, and with the way OPT is right now, if things go catastrophically bad, such investors are not likely to see any money whatsoever. In short, if something goes wrong, there's a pretty good chance you as a consumer will get your $330 back; on the other hand, in the same situation, an investor can kiss that $1000 goodbye.

 

[Benoît E. Donnette]

Well, I don't have the ticket yet but I might have it very soon.


I'd say, you could start it off a "future products" schedule, so as to provide investors with a teaser of this forthcoming future, might be an idea.


Anyway, I'll be happy to play with my Pandora as it arrives first, and by that time I might have the money. At this point it'll be easier to consider all things. The Pandora is such a cool device that it needs not be frozen, I'll be eagerly waiting for a Cortex A9-MP based Pandora after the first one

 

[Yamara]

I'm interested. It feels like anything tech is hard to break into for small start-ups now, and I like the idea of further supporting OpenPandora. I'm curious to see where this leads.

 

[peca]

My wife just agreed with 1000 EUR investment into OpenPandora. So now I'm very seriously interested.


---


edit: PM sent - just for sure.

 

[htl2001]

Color me interested


May need to wait a week or 2 for my paycheck (payroll mixup)

 

[wardred]

We're working on all that, don't worry

ED, thank you for the update.

Craig was losing money selling Pandoras for $330, and barely breaking even at $350. $25-$50 profit per unit isn't going to happen...

I'm *hoping* a large reason costs were high was because of the number of revisions, delays, and quality control issues. We haven't yet seen the fruits of the latest nub revision - was there a board revision too? - or the final case tweak or two. If most of these issues are resolved I think $25 profit per Pandora is doable...though Craig would need to confirm this.

Also I think Craig is vastly underestimating the amount of paperwork that would be involved in trying to raise $100000 from 100 investors at $1000 each. And, except for those in the UK, the investors are underestimating how much hassle this is going to be come tax time.

This may very well be true...especially for anybody investing more than the minimum. (At 1k just pay the taxes on the dividends twice - once in the UK and once in the US if one has to...assuming any profits at all.)


I was just tossing some numbers around. I think the $25-$30 can probably be realized... if the barely breaking even was also accounting for the huge startup and revision costs. If we're mostly paying for the components without further revisions, costs SHOULD go down. I think. Maybe.


If I plunk money into the team it'll be because I want the product to succeed, not because I want some huge return on a small investment, but your questions are certainly worth looking into Neko. Thanks, and cheers. I'll let somebody else have the floor for a bit now. :-b

 

[neko]

This may very well be true...especially for anybody investing more than the minimum. (At 1k just pay the taxes on the dividends twice - once in the UK and once in the US if one has to...assuming any profits at all.)

In theory, US residents can avoid paying double taxes by filing form 1116. Your tax accountant isn't going to be happy with you.


I suspect many who invest the minimum are going to see most of the profits from their investment going to taxes, currency exchange, and accounting costs. Your point about people investing in restaurants because they like the place even though it doesn't earn any money is quite relevant here. There's nothing wrong with that, but people need to be aware of the likely outcome.

 

[Gerix]

I would consider it after I have received my unit. No barbs intended.

 

[wardred]

In theory, US residents can avoid paying double taxes by filing form 1116. Your tax accountant isn't going to be happy with you.

Okay, I lied about giving up the floor. :-b I just figured if you're a minimum investor and in a year you get - lets throw out a generous number - 1/4 of your investment back in dividends the time and possible expense to go through filing the proper forms to not pay the taxes probably isn't worth just paying whatever % tax on a $250 gain. Now if one's investing a significant amount and the company takes off...that's a different story.