Audit report for Lauren Hellfury business proposal
This is Vaerah Vahrokha’s analysis as of 2011-01-05 21:00 EvE Time.
NEISIN code: CSOCR4PIP009.
Official discussion: link to investment prospectus.
Public Audits Record (PAR) for this investment: backlink.
EvE Wallet Aware
EvE Asset Manager
EvE Income Analyzer
Eve Trader – Interim release
Forewords about the Audit
Lauren Hellfury is the public contact and multipurpose alt of a former heavy PvP focused player. He has good and even excellent standings with some NPC corporations as well.
After testing for possible new opportunities, the player wants to enter into the manufacuring side of EvE and is proposing an IPO for public funding.
Main character for this proposal is Lauren Hellfury, along with two other accounts. Among the various characters, there are skills for manufacturing rigs and much more, several level IV skills for trading, contracting, mining, refining, hauling with T2 industrials and freighters, L4 missioning and PvPing (multiple characters).
Lauren Hellfury, is a Jun 2009 character with 18.5M SP. The main PvP character is from Apr 2008 and has 42M SP with a very impressive record of kills in 2-5 men gangs. The L4 character has high standings with two factions (name omitted to avoid consequences).
There are other characters with 3-4M SP covering specific tasks as well.
Involvement in other business
None at the moment except 10M invested in a seemingly defunct small LLSSE project.
Business Plan Analysis
The Investee sent the Auditor a preview about his business prospectus, and discussed a draft of the IPO though at here.
The plan disclosed the Investee manufacturing and trading strategy.
The business plan is about raising funds to be able and provide enough input materials to a production chain (detailed in the prospectus), sell the finished product then split the resulting profits in three chapters:
– management paycheck (25%),
– retained profits (25%) for further expansion,
– Investors profit (50%).
These chapters are important because they come into play in a study of feasibility the Auditor performed.
The quite high returns offered had to be checked against a simplified Monte Carlo analysis.
They seem to be compatible with the claims even in case of a mediocre market.
There is a number of downsides to the above scenario:
– the good results for the chosen finished items cannot easily scale up beyond a certain limit before market saturation prevents further input.
– the plan is theoretical. The Investee has the many bits at disposal to achieve the proposed result but there’s no recent records of him having putting them in practice.
Example: he knows how to produce the items and has industry API records of the deed, but has records of selling very few of them in the last month, he knows how to sell items but they are not those listed in the IPO.
The following graphs show the situation:
List of the last week activity:
This list shows how there have been sales, the items happen not to matter a lot with the IPO target though.
List of the top 15 sold items:
This is a mix of L4 drops items sale. The listed net profit being equal to the gross is the telltale sign, even if for privacy reasons you cannot read the actual names.
Top sales stations:
Feasibility statement: the plan looks viable but the lack of statistically relevant performance data push the Auditor into classifying this business as very high risk.
The offered interest is very high and looks in line with the kind of risk the Investors will be subject to.
Collateral and exit strategy
The Investee did not offer collateral nor RL exit strategy.
Net Asset Value and other balance considerations
The estimated net worth of all liabilities, solid & liquid assets is about 11.4B ISK.
The transactions are made by the trade characters.
Assets across all of the characters and corporations are estimated to be worth 10.118B.
Assets and balance
Wallet balance: 1.18B
Market sell orders: 92M
Market escrow: 0M
POS structures: 212M
Fleet / ships: 5.3B (unfitted)
Misc. solid assets; minerals, salvage, ice and trade goods etc.: 171M ISK
Blueprint copies and originals: 1.56B
Other: About 565M
Ordered assets under construction: 0M
Estimated grand total: 11.4B Billion ISK
The business is pretty straightforward: the Investee buys (or has them as mission drop) materials for a manufacturing business, creates items, sells items, distributes profits.
The business, as long as the market does not horribly tank, should be able to honor the investment.
The Investee has the character skills to confirm his claims.
The Investee net worth is about double of the requested capital, the Investee is comfortable dealing with the involved amounts.
The Investee has proved the blueprints being original.
The Investee accepted an audit, had a prior discussion and took time to share his final prospectus and have some points checked.
The strong PvP past is always a boon when dealing with prolonged operations that could be wardecced or whatever.
The Investee did not provide neither collateral nor RL exit strategy.
The Investee transactions only go back to some days, therefore it’s not possible to perform a dependable analysis.
The Investee has little meausurable practice about the proposed business.
The Investee has a debatable past by his own admission (he has been totally sincere at this) and some of his points of view could be disliked by some.
He agreed to post some excerpts:
Pragmatic approach as pirate:
Originally by: Lauren Main
You seem to assume that we want the same thing and that we are on the same side. You are, however, somewhat mistaken. Now stop making me wonder in which way you graduated from idiot……
People, having been ransomed for all that they have are not going to be returning any time soon. So there is no income stream to hurt, it’s a one time special offer.
Originally by: Vaerah Vahrokha
I left what I find topic: the sentences below. They look sincere and I appreciate this.
But I am sorry, you cannot hold public money unless they are informed that you believe what is stated below verbatim.
If they are ok, then be my guest.
In a mail of mine asking about the following:
Originally by: Lauren Main
Do we condemn scammers? As an absolute? No. Do we condone scammers? As an absolute? No. Do we grief, do we conduct in-game vendettas, do we rent our services for such? Yes. However, anyone that wasn’t able to limit themselves to keeping it all in-game get kicked from the corp, they are not nice people
The reply was:
Originally by: Lauren Hellfury
It’s something that I would still stand behind especially when taken in context with the bit you missed.
“do we condone scammers? as an absolute? no.”
It is my belief that everyone has their price, some figure that, if offered, would cause them to “scam”. Those that profess otherwise are either in denial or haven’t found out what that figure could be. Maybe it’s just too cynical a world view.
On the other side and unlike the above, the mentioned character sale does not seem to be as relevant at determining a certain forma mentis.
Due to the lack of collateral, RL exit strategy, lack of records, inherent risk at trading and Investee past, the Auditor classifies this investment as very high risk. Notice how “very high risk” is not a negative judgement on the business plan or kind but a statement about possibility of losses being real (the failed bond would be an example).
The Investee seems competent (skills wise and player wise) enough to deliver on his statements but has no records. His business is in a growth phase, his API records show he’s may operated as he stated.
Basically, the Investee looks like with the ability to successfully honor the bond. Notice how an audit can only evaluate the ability or potential of an Investee to succesfully honor a bond / IPO.
The Auditor suggests perspective Investors NOT to invest their full capital on this venture but to offer what they could eventually afford to lose.
Due to stringent EvE API limitations, although the information provided to you on this document is obtained or compiled from sources believed to be reliable, Vahrokh Consulting cannot and does not guarantee the accuracy, validity, timeliness, or completeness of any information or data made available to you for any particular purpose.
This Auditor is actively and passionately against any breach of privacy, in particular regarding in game mail API access. Therefore no information will ever be gathered and no audit will ever be released that will contain any element found by eavesdropping someone else’s private communications.
Neither the information nor any opinion contained in this document constitutes a solicitation or offer by Vahrokh Consulting or its affiliates to buy or sell any securities, assets or services.
Since this is an audit adapted for this web site, it has some small differences against the official audit:
- the first rows were added links to this web site and NEISIN code,
- unlike newer audits, the pictures are hosted on a third party web site.