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Letter from Fred


hrothgar

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Fred, does this mean congratulations are in order?

 

Also, I noticed that it was mentioned that the parts of BBO that are free will remain free. I'm sure that we all appreciate this, and are very happy to hear you come out and say that that. At least, I appreciate it. :)

 

Anyway, good luck with your new ventures.

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big congrats to Fred and the rest of the BB/BBO gang

You've done a bangup job over the years. Clearly a labor of love from the beginning. You've babied and nurtured it, and its grown and grown and grown. Now you've brought in the finest gurus to help guide it to the promise land (whatever it turns out to be). :)

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I'm not sure this is "venture capital" since return on investment not like usual VC - more like fans of bridge donating money to help the bridge community

I can't believe this view. Their love of the game might be a big factor in their "buying in", but the BBO makes money from tournament revenue, from money bridge, from directed advertisements. I can''t believe Fred/sheri/uday would turn over some significant percentage of ownership (thus reducing their share of the profits) without a significant payment. And I doubt that these three investors would invest without an eye to future expansion and a reasonable return on their investment.

 

I fully expect to see the implementation of new intiatives in the months ahead, and hopefully expansion of the options on line for how we do things. I think this is great news and all BBO members should be excited about the possibilities this new ownership structure might be able to bring.

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For those of you who are not familiar with such things (I wasn't until recently), here is a brief summary of how this works:

 

- The buyer(s) and seller(s) agree on $x as the value of the company

- The buyer(s) make an offer to buy a y% share in the company based on the valuation of x$

- The seller(s) accept the offer

 

The buyers have made an investment. They hope that their shares will go up in value - maybe they will want to sell them one day and make a profit. But as long as they hold on to their shares they will also receive dividends from the company's profits.

 

Yes - the buyers are interested in bridge. That is a good thing of course, but it did not have an impact on the computation of $x.

 

It is indeed very good news for everyone (even you!). Thank-you to the many people out there who seem happy for us.

 

Fred Gitelman

Bridge Base Inc.

www.bridgebase.com

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Its very common for the process Fred decribes to happen several times over until a growing company goes public, or is purchased outright.

 

Each time the company is revalued, and the ownership is diluted, the Freds of the world cash a nice check along the way.

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Fred, Sherri and Uday

 

Nice one, it is nice to see people that start something they want to for honorable reasons go on to make money, I have had a few dealings with the three amigos that run BBO (this is meant in the nicest possible way) andf all I can say, is you are genuine people that care and are very helpful and supportive of others and if you make a fortune from this, well, I hope you live a long time to enjoy spending it

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What if the BB Inc. would sell a very small (symbolic) part of the company capital in the form of very decorative - one share - certificates to the general membership. In the fact more symbolic...but valid shares...I think many longtime users who feel affilitated with the BBO would like to own it. Maybe it's a total nonsense ( I don't know anything about US law in this field )... just an idea for the future. :)

 

Robert

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What if the BB Inc. would sell a very small (symbolic) part of the company capital in the form of very decorative - one share - certificates to the general membership. In the fact more symbolic...but valid shares...I think many longtime users who feel affilitated with the BBO would like to own it. Maybe it's a total nonsense ( I don't know anything about US law in this field )... just an idea for the future. :)

 

Robert

There are certainly some historical precendents for this type of model. For example, the city of Green Bay Wisconsin owns the franchise for the Green Bay Packers. I suspect that the Packers fans made a very wise decisions years back... (No chance in hell that Green Bay would have its own francise in the modern sports era)

 

My suspicion is that this type of model would not be a good match for BBO at this day and time. There are lots of hassles associated with being a public company or making any kind of widespread stock offering. I've participated in angel rounds, both as an angel and promoting the float... There are a lot of good reasons to keep this sort of thing small.

 

My hope is that Fred and Uday were looking to raise a specific amount of money for some kind of known / bounded projects. Luckily, they have the right connections to be able to raise cash without dragging in a raft of middlemen. Equally significant, as Fred notes in his letter, folks like Gates and Osbery are in a great position to offer good advice regarding business models and the like.

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Congratulations for finding these new business partners who genuinly have a heart for the game. I think this was a good move.

 

Mr. Gates and Mrs. Osberg were playing together in Verona, quite a trip for someone with a filled business calendar.

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