# Tjet Factory Phase Ii



## mr_aurora (Oct 18, 2005)

*Tjet Factory Phase II*

The TJET FACTORY.................... 

We've had a lot of fun and stirred up tons of interest with the recent thread on both the Howl list and Hobbytalk. I want to take the TJET FACTORY idea to the next phase................... IT IS STILL HYPOTHETICAL and market research is ongoing. My Recording Secretary, Dennis, will carry on the Shares list with the following changes....... You can increase your share amount or decrease your share amount or keep it the same but you MUST let the secretary know your intentions for PHASE II. The purpose for this method is to better keep track of you all should this actually become a reality. Hey, you never know................

Here are some important facts and objectives I would like to state and accomplish in this phase of the operation.

1) The Tjet Factory will be a partnership. I have brought onboard my longtime friend and expert manufacturing specialist, Dan Esposito. Together Mr Esposito and I will see this venture thru PHASE II. I will be CEO and CFO and Mr. Esposito will be our COO. With our extensive knowledge of manufacturing via CAD design, development, injection molding, and Mechanical and Processs Engineering, Mr. Esposito and I feel we have the capabilities to see this project thru to production.

2) Our objective is to plan, design, develop, test, and manufacture the entire Thunderjet solid rivit 1963 rolling chassis in the UNITED STATES OF AMERICA.

3) The chassis will be designed and assembled to the original tolerances and dimensions as drawn on Aurora's blueprints. Yes, I have or can obtain that vital information.

4) Parts, armature, magnets, etc may be offered later for seperate sale but the initial plan is a rolling functional chassis.

5) The initial investment of $50,000.00 for startup costs to get to production is still the goal. Your ROI (return on investment) is still finished product at cost to the extent of your investment. IE, you invest $500.00 and the chassis cost $5.00 to manufacture. You get 100 chassis for free.

To this end I want to start the Shares List for Phase II.

Bob Beers 100 shares
Dan Esposito 100 shares

Remember, you can increase your share amount or decrease your share amount or keep it the same but you MUST let the secretary know your intentions for PHASE II. Let's see where PHASE II takes us people, and thank you for all your support to this point.

CEOBOB


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## micyou03 (Apr 8, 2003)

I like the way this is sounding. 

Mike U 1 Share

How do I get in touch with Dennis?


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## resinmonger (Mar 5, 2008)

micyou03 said:


> I like the way this is sounding.
> 
> Mike U 1 Share
> 
> How do I get in touch with Dennis?


Sir Dennis Sieck is known as _partspig_ on Hobby Talk. Please do not confuse him with Sir Dennis Eatonhogg, a personal a friend of mine who likes to chat about HO racing when I see him at Thruxton for the Bank Holiday races.

:drunk::hat::freak::dude::tongue:


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## AfxToo (Aug 29, 2003)

> Your ROI (return on investment) is still finished product at cost to the extent of your investment. IE, you invest $500.00 and the chassis cost $5.00 to manufacture. You get 100 chassis for free.


I'm still a bit confused. Is the original investment by "investors" really buying "shares" in an ongoing concern, or is it really just giving "buyers" an opportunity to pre-purchase products at a discounted price? 

If the former is the case, i.e., investors are buying equity in a real company, then I would expect the purchase of shares to result in a proportional equity in the company and its ongoing operations once the production capability is established. Using terms like CEO, COO, etc., makes it sound like this is being set up as a real company with all of the legalities involved, and not a dress-up.

If the latter is the case, where so-called "investors" get only a proportional share of the initial production and have no ongoing equity, then this sounds like a giant pre-order purchase transaction, where the pre-order money is being used to front, or finance, the production of the product. Unlike most pre-order sales agreements, the "buyers," who are no longer really investors, may not receive anything for their pre-order cash outlay. 

If I am an investor I am willing to accept risk for an opportunity to establish equity in an ongoing concern that may pay dividends down the line. If I am a buyer of a product being offered up at a discounted price if I pre-order, then this is simply a matter of a transaction between a buyer and seller. If the product does not get delivered then I expect to recoup all of the money that I put up for the pre-order.

I realize this is being driven by goodwill and to satisfy the needs of a population of hobbyists. But if it's being presented as an *investment* scheme, with shareholders and corporate officers, when it is really just a *speculative pre-order* scheme where the buyer may get absolutely nothing for their pre-order, then it's a whole different thing altogether. I'd imagine that if any one of the established hobby products manufacturers offered a similar speculative pre-order arrangement, there would be a lot of raised eyebrows and probing questions being asked.

So which is it?


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## micyou03 (Apr 8, 2003)

I'm interested either way.


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## mr_aurora (Oct 18, 2005)

*Phase II*

The thread started because no one is willing to pony up 50K for a possible money making venture. I proposed everyone chip in to fund it and get product in return. The names CEO, CFO, etc are for fun. "shares" is the term we call chipping in. If the funds actually were collected, legalities, which I have no idea about currently nor do I care to go into at this point, would have to be drawn up. Something you are forgetting..... what about a loss in this venture? What if it doesn't work? I am willing to spend the needed up front hundreds of hours to get something like this going. What I need from you guys is cold hard cash.......:wave: If it fails, you might be out a couple of hundred bucks but I lost a lot more than that. At least not 50K. thanks and have fun........ CEOBOB


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## JordanZ870 (Nov 25, 2004)

Too's question remains, CEOBob.

If this 50K VENTURE pans out and I get my alotted chassis for the dollars I invested, are there profits due to me from subsequent orders for chassis beyond the first run? 

OR..

Is receiving my alotted chassis considered a 'BUYOUT from any subsequent chassis orders (beyond the original 50K venture) and I am due nothing after recieving my chassis?

Seems to me that 50K is alot of money risk and spend just to tool up for a single run of chassis.

Please clarify.


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## AfxToo (Aug 29, 2003)

> Something you are forgetting..... what about a loss in this venture?


Not forgotten at all. That's just the cost of doing business, it always comes down to risk versus reward. My whole point here that you can't ask a bunch of people to share the risk without sharing the reward. If this venture is successful, and I sincerely hope that it IS, then there needs to be proportional downstream rewards for the investors, something beyond a one-time allocation of the first production run of a brand new product. Yes, it can fail as any business can fail, but the opportunity and reward for success is exactly what motivates all businesses, like the ones that we deal with on a regular basis in this hobby, to give it a go. 

I think you can run this as a real business with an investment structure that provides downstream ROI for investors. It may attract more serious investors and some real capital, but it may also turn what is a fun hobby for you into a painful test of your sanity. When you turn your pleasure into your business, what do you then fall back on for relief? I'm not saying that this scheme will not work, it could, and I'll reiterate what I've said before, good luck with the venture, or should I say, adventure.

Thank you Bob for sharing your thoughts. I truly admire your candor and everything that you do for the hobby. Have fun in Cleveland.


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## SplitPoster (May 16, 2006)

mr_aurora said:


> The thread started because no one is willing to pony up 50K for a possible money making venture. I proposed everyone chip in to fund it and get product in return. The names CEO, CFO, etc are for fun. "shares" is the term we call chipping in. If the funds actually were collected, legalities, which I have no idea about currently nor do I care to go into at this point, would have to be drawn up. Something you are forgetting..... what about a loss in this venture? What if it doesn't work? I am willing to spend the needed up front hundreds of hours to get something like this going. What I need from you guys is cold hard cash.......:wave: If it fails, you might be out a couple of hundred bucks but I lost a lot more than that. At least not 50K. thanks and have fun........ CEOBOB[/QUOTE
> 
> Forgive me, but I am about to ask relevant questions that should be answered, CEO Bob. If I step on some toes, I apologize now.
> 
> ...


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## slotcarman12078 (Oct 3, 2008)

I understand where you're coming from AFXtoo, but I think we're missing the point.. The real return on our investment is hopefully another 40 year supply of our beloved chassis at an affordable price. Don't think of the shares as buying into a company. Think of it as trading chassis for start up capitol. I'll agree there is profit to be made from the sale of these chassis down the line, and I comprehend the interest in a share of the profits which could be sizable once everything evens off. I myself would be satisfied getting my initial investment back in chassis and having an affordable supply at hand for the next 40 years.. How quickly the tooling and manufacturing costs are covered will be determined by the mark up over actual manufacturing cost. An actual profit from this venture may not be realized for 10 years... That will be determined by the actual cost vs. retail cost of the chassis...and how well they sell.

There are a couple other things we all have to keep in mind with this venture.. Above and beyond the tooling costs, there are the raw materials that need to be purchased, transportation costs, warehousing, and accounting. Mr Beers and Mr. Esposito will be doing a bunch of leg work, supervising, checking samples, QC-ing, and will be up to their ears in nylatron, metal for gear samples, axle samples, etc. An injection molding company more than likely will need to be sourced. A company to stamp gears and shoes, one to make arms and another to make axles will be required. I doubt Bob B. and Dan E will be molding, stamping and winding in Bob's basement!! :lol: If I had more $$$ to invest, I would simply to get more chassis up front. The at cost payback for the initial investment will be most likely the best price for these chassis..


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## SplitPoster (May 16, 2006)

Uther Joe, if it's set up as a simple partnership, the "partners" can be liable for the bills too. Packaging supplier A gets miffed or dropped, claims he's owed work than the new Aurora denies, sues or goes to arbitration, pre-production - who pays the lawyer? Got a friend who invested in a sure-thing business, no direct involvement on his part, set up sounded just like this. When the managing partners decided to close shop they hit him up with about 8 grand in shut down costs - his share proportional to his investment - a HUGE shock to him. Then when assets were sold off he was out of the loop. It pays to know up front


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## partspig (Mar 12, 2003)

Before anything else is said or done, there is one thing everyone is overlooking. ALL OF THIS IS HYPOTHETICAL! We are looking for investors. Guys that are willing to pledge their money to produce a replica chassis. We do not even have a name for the LLC yet. If you are asking exactly how everything will be worked out, we don't know yet. Maybe we should have asked for lawyer start up costs first! Lighten up, pledge your shares and have a little fun with this. It may or may not come to fruition, once we get to the start up costs total, then let the lawyering begin.

From April 9th .............

Answers to the questions to the CEO..........
*
1)parts will be EXACTLY like the tjet chassis, 100% interchangeable.
2)straight up copy with hop up options available later.....
3)color should be slightly different to indicate the new ones.
*
4)I felt no more than 100 hardcore guys would be interested.* I actually like the idea of the shares.....
5)I need a good VP of Sales to spread the word around the other sites.* Run the list there and combine it back here.
6)real names is good, shows a willingness to commit.
7)looks like we have a recording secretary...........
*
Thanks Roger, now we are having fun..............
*
CEO BOB

From the desk of CEOBOB:
*
This whole venture was borne out of my insistence that there were no more than 100 serious tjet guys on these lists.* Also the fact that it would cost around $50,000.00 to tool up and start to produce exact replica's of tjet solid rivit chassis.* We all agreed that no one person is mad enough to attempt this in it's purest form.* Tjet, exact replica, all interchangeable, solid rivit chassis. It would surely be financial suicide.
*
that said.
*
1)* Is this meant to be, for shareholders, a one-time one-shot opportunity to get ONLY the value of your investment back in the form of chassis (hopefully cheaply).* YES and NO, Purchases can be made wholesale uo to the cost of your investment.* Once at the 1000 share level the COMPANY charter would be written up and the investors, after seeing and reviewing it,, would then be asked to come up with the cash to invest. Then they would be set up to receive ROYALTIES on all chassis sold up to 1,000,000 pieces and based on their initial investment.*
*
2)**Only meant to (one time) fortify their personal supply or to otherwise do with them as they please? NOT PLANNED but could be negotiated when we hit 1000 shares.* The necessary amount of shares needed to go to the next level.
*
3)* Will shareholders be able to buy more chassis at a discount than they have initially signed up for? SEE (2)

4)* Is this for senior staff, a one-time, one-shot means to mass produce a large quatity of chassis for personal use and short term sales or a way to get into the chassis business??* A WAY to show the forums that this can not happen because of the investment risk**
*
5)**Is this likely an occasional endeavour or an actual ongoing business? AT 1000 SHARES it would move to the the next level on it's way to become an actual ongoing business.

6)* Is it possible that future opportunities for additional "shareholder" investments would be sought?* YES based on the success of this E-JET

7)* How many chassis would senior staff see as being "enough" ??* THE SKY is the limit!*

partspig


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## 1976Cordoba (Sep 20, 2000)




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## oddrods (Feb 6, 2007)

Like others, I would like to se a new chassis made and I would like to help start the ball rolling but If the only return is chassis from the 1st run { likely to not be the best version right out of the box} then I do see a problem. All the investers buy into the initial run and are paid off. Then those at the top{CEO etc...} will now have a very sellable and desirable product with most the tooling costs paid for by others and the ground work laid. For their small{not the full 50k} investment, they get a huge return and the rest of the investors that were paid in full go back to paying retail. I do understand that they would also be investing a considerable amount of time and effort as well but they would be making the same investment plus the 50k if they are to go it without our help. If I was to actually get shares I would more than likely pledge more than my initial 1 share.


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## AfxToo (Aug 29, 2003)

I know it's hypothetical, and at this point a mind experiment, which is why I wouldn't get too bound up in the details. However, the whole investment strategy is worth discussing because it is a fundamental concept that can be bounced around as an idea and considered for its pros and cons, again, as a mind experiment. I am not challenging the motivation or the intent or the potential benefits to the hobby as a whole. I'm simply asking, "Does this type of business model make sense in this case?" Hmmm. On the one hand it sounds like a cooperative, but on the other hand it sounds like a business, hmmm. We all recognize what a business is and the risks involved. Companies like BSRT, Dash, WHP, AutoWorld, MM, and many others who feed the hobby with products are making the kinds of investments that can leave their "CEOs" and backers penniless and hung out to dry. You don't have to tell them that a venture can fail. They live in that world. 

So the hypothesis being posed here is whether there is another model, or pseudo business model, for creating a new slot car product that does not entail the risks associated with starting and running a real business. In other words, can you create a reward without absorbing the risks. My contention is that, no you cannot, because the risks are inherent with the opportunity for reward. What I think is being proposed here is, hey we'll just spread the risks out over so many "investors" that no single person is over exposed. Yeah, that seems to make some sense, maybe more so to tax bureaucrats and socialists, but for capitalist investors the counter proposal would be "if you're going to share the risks then I expect you to share the rewards." If an investor comes in with N% of the upfront costs I would expect there to be some opportunity to avail themselves to some percentage allocation of the downstream production, maybe not N%, but something that has monetary value and determined as part of the initial investment. I would also see small up front investors being able to sell their shares, which have downstream production allocation value, to other investors. This would still be a co-op, or group buy of downstream production, but the allocation percentages would be driven by an up-front schedule and there would be tangible value in the "shares" that investors are buying up-front. As to the first-run products, considering the proportion of up-front cost that is directly associated with delivered product, and the fact that as a first run they will likely be the least desirable run to ever be produced, so they should not be seen as the only form of payback for investors. In fact, if investors own retained value in their "shares" the onus for hitting a home run on the first swing of the bat is somewhat reduced. When the second and later production runs gets tweaked and improved, shareholders should still have exclusive benefits over non shareholders because of their original investment.


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## SplitPoster (May 16, 2006)

CEO Bob says in the first post on this page: "1) The Tjet Factory will be a partnership."

Recording secretary "partspig" says a couple posts up : "We do not even have a name for the LLC yet."

This is a hypothetical WHAT? (A: I don't know yet, but we need your money to find out.) "Splain please, and don't say there is division amongst the board members. 

Big difference in being a partner and an investor. First steps needed before pledge is made! 

You ever watch, uh, Judge Judy? And you don't get it? LMAO!


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## Grandcheapskate (Jan 5, 2006)

A number of things to consider for this to work. While the idea is great (and one I would have loved to have tried out with track), I just don't see how you overcome certain issues without making this venture some type of legal entity.

Let's assume enough money is raised to start the project and NOTHING goes wrong. Bob and Danny put in a lot of hours and finally produce a run of 5,000 perfect chassis. These are then distributed to all the shareholders based on their investment. After that initial run, everyone has broken even.

Now the problems begin, even if all has been perfect so far.

Who owns the tooling? Who decides if there is a subsequent run? Who puts up the money for, and warehouses, additional runs? Who is allowed to use the tooling? Who is entitled to make money off additional runs? For that matter, who warehouses (and pays for warehousing) the tooling? How much is the time spent developing and testing the product worth?

The questions get tricky. Setting up a legal structure may be the only way to do this so there are no misunderstandings. After all, you may have 50+ people involved.

And if something goes wrong? We had very good luck with the track in that we have not had any bad lots and everything did work out as well as possible. But with the actual cost unknown and the myriad of problems which could occur, this becomes very tricky to do without a written agreement.

And if you do make it legal, now there are tax considerations and other documents.

Taking the first step to see if there are actually enough people willing to invest enough money to make it work is the first step. But every step after needs to be taken with great care.

I hope it all works out. 

Joe


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## micyou03 (Apr 8, 2003)

As a purchaser of shares I would think that once I got my initial chassis, that would be it for me. Any subsequent runs of chassis would be sold at market price, and if I wanted I could buy more at market price. 

If there are issues with the initial run the cost per chassis would go up and the number of initial run chassis I can get for my shares would go down, and could possibly end up at 0.


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## SplitPoster (May 16, 2006)

micyou03 said:


> As a purchaser of shares I would think that once I got my initial chassis, that would be it for me. Any subsequent runs of chassis would be sold at market price, and if I wanted I could buy more at market price.
> 
> If there are issues with the initial run the cost per chassis would go up and the number of initial run chassis I can get for my shares would go down, and could possibly end up at 0.



This is an interesting post. One can buy shares because one is a nice guy and wants to support the very neat but as-yet hypothetical situation. The assumption is that a share is a purchase share, niether conveys equity in what is purchased with that money, if anything, nor in the company, pays no dividend nor any future consideration, comes with no vote for a shareholder representative (board member), and hopefully does not have any obligation or liability if costs, liabilities or judgements exceed revenue (i.e. share of the business, partnership).

So one's choice would be to buy a share of future production that may yield 0-10 units, presumed to be of high quality, at an undefined point in the future. If the accumulated capital purchases $20,000 worth of equipment/tooling and produces another $20,000 worth of parts, pays out $10,000 in expenses and runs out of money without producing a final product, "common" shareholders would have no claim on anything and would forfeit all the assets to whoever is holding them. You are a very good-willed and generous person. 

I personally think that there hasn't been enough determined or disclosed to draw these conclusions. The situation as hypothetically described here certainly puts the officer/shareholders in a completely separate and *much* more priveleged class than the outside (or maybe "common") shareholder. 

The other option is to evaluate the product when/if it makes it to market and make the decision to buy whatever quanitity wanted then at best price available. 

The "legal entity" appears to be solidly on the radar, re the LLC comment. Don't know that the IRS/state regulators wouldn't catch on to an unlicensed business with that kind of potential cash flow and numerous contracts, purchases, etc. - no fines built into the budget, I bet. A necessity anyway, as without some framework all you really have is some person holding over $40K of other people's money. The unexpected is what you worry about - illness, some life changing event - then how is that cash differentiated to guardians, relatives, spouses, heirs, executors? Sorry to be morbid, but most of us have life insurance, health insurance, umbrella policies and such while planning not to use any of them. 

Remains a very interesting discussion.


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## AfxToo (Aug 29, 2003)

> One can buy shares because one is a nice guy and wants to support the very neat but as-yet hypothetical situation.


This model would work for the one or two share guys. Getting several hundred or a thousand people (Aurora TJet Fanatics, Friends of Bob, etc.) to throw $50 or $100 into a pot in hopes of seeing something, anything at all, come from the crap shoot is a model that some people are willing to accept. I think that the original theory that started this idea, the Thousand Man March for TJets, followed this line of thinking. The altruism generally ends when people are buying up dozens of shares, and especially when the investors are dealers. I think that to make this become a reality, in today's economy and in light of the small market, will require some big investors and those investors are going to want something more than the "feel good" factor.


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## SplitPoster (May 16, 2006)

AfxToo said:


> This model would work for the one or two share guys. Getting several hundred or a thousand people (Aurora TJet Fanatics, Friends of Bob, etc.) to throw $50 or $100 into a pot in hopes of seeing something, anything at all, come from the crap shoot is a model that some people are willing to accept. I think that the original theory that started this idea, the Thousand Man March for TJets, followed this line of thinking. The altruism generally ends when people are buying up dozens of shares, and especially when the investors are dealers. I think that to make this become a reality, in today's economy and in light of the small market, will require some big investors and those investors are going to want something more than the "feel good" factor.


Completely agreed. I would question how long the total altruism would persist while waiting through normal development/production times, delays, cost overruns, or failure to achieve full production. After the checks are cashed, attitudes tend to change. A few of the same guys post rant threads about getting less than they expected from a $20 ebay purchase. The officers are already large shareholders/dealers (1000 chassis) - wonder how the 1 or 2 share guys would react if/when the total preferential status becomes reality? All the more neccesity for a legal entity to protect the officers, and define what claims, if any at all, the investors have. 

The huge potential downside of this scheme: If you sell 100 shares to one person, that person likely has done their research, understands what they are geting into, and has realistic expectations. Sell 100 shares to 100 people, how many different attitudes exist in that group, from people who forget all about it to those that want to call every day to ask about their chassis? Can you imagine dealing with a dozen or so angry/agitated small shareholders with some sort of legitimate question or claim, and not having any resources to fall back on? ("Trust me?") Talk about the potential for sizzling threads in HT, at the least.


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