Arthur Conan Doyle’s Sherlock Holmes challenged us with his expression, “Surely the game is hardly worth the candle.” He asserted that buying a candle to light an activity demands that the activity is worth more than the price of the candle. Here, we have to wonder if fractional ownership of alternative assets and a related auction is worth our effort. Let’s explore the answer from two perspectives: the sponsor/seller of the asset and our intrepid investor.
The potential benefits for each party can be substantial. However, at what risk or complexity (see our earlier missives for details: Jumpin’ Jehoshaphat, alternative asset deal structures – ugh! and The aShareX Kairos Solution for Alternative Assets)?
The sponsor gets from our platform:
- More potential buyers
- A stickier customer base resulting in higher lifetime customer values. We know that more sales to any customer increases retention.
- Maybe higher sale prices from the incremental demand of fractional investors and even if the fractionals don’t win, pushing 100% investors to pay potentially more.
The benefits to the fractional buyers are clear:
- Access to otherwise unattainable high value and quality assets.
- True market-based pricing from the auction versus stated values by the sponsor.
- Regulatory oversight from an SEC qualified common stock offering to evidence the proportional ownership.
- Investor control of the asset disposition process.
- Lower costs than traditional structures.
Sounds great but the quality of the execution must overcome the obvious risks:
- Too many participants may crash the system, negating the marketing spend to fire up the participation. The risk of any resulting ill-will demands careful consideration.
- Too slow. Watching paint dry is never enticing to the fast-paced demands of investors.
- Too confusing. Investors are conditioned to the market visibility of exchanges to know where they stand moment by moment in order to map out next steps.
- Too difficult to learn a new approach. New things poorly done can be confusing and off-putting when there are real investment dollars at risk.
After over 3 years of hard work and careful consideration of the above, we believe aShareX has addressed these concerns head-on to capture the benefits of fractional ownership and its related auctions for both sponsors and investors.
- The aShareX auction platform has undergone several auctions without any glitches, processing more bids in short periods of time than typical, and has been rigorously tested to 5,000 concurrent bidders.
- Processing speeds have been effectively instantaneous given the power and use of Amazon Web Services (AWS) redundancy and capacity.
- The user interface shows each bidder where they stand in the context of the overall auction process. Importantly, there is more information available to the sponsor than in any other auction of which we are aware.
- When most of us buy a new car, we test drive it first to make sure it meets our needs. Heretofore, there has been no equivalent in the auction world. We created our Test Drive an Auction™ to give investors the ability to see and experience the auction at work, not easy. The user simply answers two questions to enter the process: bid as a fractional or full bidder and select a spending amount. Then, poof into an auction to outfox hundreds of computer-generated competing bidders. It’s randomized with each trial generating a different outcome to allow for experimentation with different bidding strategies.
In sum, harness our Roman god Mercury for speed.
Processing speed, depth, visibility and for both the sponsor and investor, a duty of care makes the difference.
Light our candle!
