Potential Investors

[Haruki]

Originally Posted by The Only Way Is Up

We're not talking private equity houses though. A more modest sum, say £100,000 from each of a number of investors with a target return of 10% but linked to performance (in just the same way as the actual return on the same sum used to purchase shares in a company would be dependent on the performance of that company) would be sustainable in the sense that without the promotion and ongoing financial success of the club, the investment would be worth no more than if it had been into a company that failed to produce the anticipated returns, i.e. little or nothing.

By linking the investment return to league status and profitability, it safeguards the club in the event of it failing to hit the target agreed upon for the return offered. Would anyone invest on those terms? For those with the spare cash earning virtually nothing in their bank account it could be an attractive alternative, albeit a gamble with the potential to lose 100%.

The art is in making the potential return offered high enough for the investor to consider it worthwhile, whilst at the same time securing the club's financial need both now and in the future.

I'm sure that in the same way as those of us with very limited funding might still be prepared to buy a lottery ticket or place a bet on a horse, there will be others with far greater means who might think of a speculative investment into the club in the same vein.

It would mean that if we were promoted we would be £550k down against other clubs in League 2 due to repaying the £500k investment plus 10%. That would likely leave us facing a serious threat of relegation back to the National League which would be seriously demoralising to the fan base and I think promotion with an immediate relegation would be a worse outcome for the club than not getting promotion.
Alternatively we may invest the £500k and still not get promoted, where does that leave us?

[The Only Way Is Up]

Lots of glass ceilings around today!

[krux]

Originally Posted by The Only Way Is Up

Some say that without a tangible asset in Wrexham AFC, no one would be prepared to put in money without expecting a financial return on his/her investment.

If the Club's objective was simply to find investors in order to buy our way back into the Football League, I wonder if someone prepared to invest a decent sum for skilled players who could definitely do a job down here would consider a future return of say 10% or more at the end of the following season IF promotion was achieved?

How would the return on investment be funded? It could be offset against future income derived from increased attendances, the £472,000 basic award and £430,000 Premier League Solidarity payments that all L2 clubs receive for starters - though some or all of that would be required to maintain a competitive playing budget in L2.


Any thoughts?

This is incorrect. We have a tangible asset in he form of a 100 year lease, which is as good as owning it (subject to specific exclusions contained in the lease)

[krux]

Originally Posted by waxcrayon

Invest in what?

whatever other chairmen invest in. Pilley , Vince etc

[krux]

Originally Posted by ruthinred

As Sparky and I have already alluded to

Plenty of financially secure people don't expect a return, and are willing to donate/ invest for a life experience

yes. How many football club owners are getting a financial return?

[International]

Depends how well their other businesses are performing. The money invested in the football club could be a tax write off. Or Tax deduction advertising the company.

[Alan Attack]

Originally Posted by krux

This is incorrect. We have a tangible asset in he form of a 100 year lease, which is as good as owning it (subject to specific exclusions contained in the lease)

But it’s not as good as owning it.

[TheLateJC]

Originally Posted by The Only Way Is Up

Some say that without a tangible asset in Wrexham AFC, no one would be prepared to put in money without expecting a financial return on his/her investment.

If the Club's objective was simply to find investors in order to buy our way back into the Football League, I wonder if someone prepared to invest a decent sum for skilled players who could definitely do a job down here would consider a future return of say 10% or more at the end of the following season IF promotion was achieved?

How would the return on investment be funded? It could be offset against future income derived from increased attendances, the £472,000 basic award and £430,000 Premier League Solidarity payments that all L2 clubs receive for starters - though some or all of that would be required to maintain a competitive playing budget in L2.


Any thoughts?

It's an interesting idea but sadly I can't see it working. From the investor's point of view it is a very poor offer. The chances of getting any return are not good and even if we did go up, the return is very small. They'd be better just going to the bookies and betting on us for promotion. The return would be much, much greater.

It might appeal to a genuine fan as an "experience" but we don't have fans with that sort of money going spare.

[RED2309]

Seems we need to promise a tidal lagoon or nuclear reactor to get some WAG funding.