Shareholder model

[SV gypsy spirit]

Triggered by another thread here that took an... unpleasant turn (probably a scammer), I thought about different models for people in their 30ies with somewhat limited funds that want to drop it all and go sailing around the world for a certain time. Like a sabbatical or a 2-year time off, before returning to work. Some just don't want to wait till their retirement or want to go on an adventure before settling down, having a family and so on.

This is pure theory an and invitation to comment and discuss. I actually do already have a capable boat myself and been out sailing for the last 2 1/2 years constantly, but I am looking for alternative models to make this whole experience more fun and win-win for like minded people.

Usually the problem is purely financial; people in my age (36) simply did not build up enough funds to purchase a boat that you would feel comfortable cruising around the world with safely, not to mention the outfitting, upgrading, voyage costs, maintenance and all that.

So the idea (which is not new I assume) would be -
1) find 5 like-minded people that want to go on a world cruise or at least an extended 2 or 3 year cruise; not necessarily ALL THE TIME, but most of it or intermittently, while ALL THE TIME is fine.
2) each person invests say US$ 6-7000 (5 x 6500 = 32500) with the captain/founder investing something like 50k.
3) The captain/founder buys a suitable older boat in the 45-50' range for 70k and the rest is used on initial repairs and upgrades. He owns the boat, and takes care of refitting or upgrades, repairs and maintenance.
4) During the voyage, the captain is responsible for voyage planning, safety and finances, but takes suggestions and wishes into account.
5) The shareholder model grants unlimited access to the boat, but is time restricted, and after the voyage is accomplished or 2-3 years have passed, the boat completely belongs to the founder.

Benefits to the potential shareholder:
- have the opportunity to go world cruising for 2 years NOW for the price of a 3 week charter, or the price of three 2 week overseas vacations, or a used car.
- hop on and off the boat and stay as long as you want or can without having to care about the boats well-being, maintenance, storage, upkeep and safety. Basically having a boat without the hassles.
- Thus not destroying your so-far lifetime savings. Just walk out of it after 2-3 years and get back into business.
- Flexibility.

Benefits to the captain/founder
- not having to buy a rather expensive boat all at once which would probably empty out all you have and leave you with a nice boat but no means left to actually go sailing
- Ending up owning a boat that you "crowdfunded" and worked off without having to deal with banks and loans
- Doing what you would do anyway - sailing.

Dangers I can see on the horizon
- People not getting along, thus having to buy people out or replacing them with new "shareholders".
- technical or other problems that interrupt the voyage and cause resentment and delay the actual delivery of the "voyage promise"

What do you guys think? Is this bullbeep or a viable thought?

[Dulcesuenos]

Issues :
Money, 70k boat 45-50' will probably need a fair amount of work. And guessing 10-40k of work or upgrades. And anyone who says it doesn't cost much to refit a boat hasn't done it. Most spend 50-100% more than they estimated. So what $$ do you live off of? One engine mishap, storm damaged rudder, rigging sails, and repairs $$ in a remote place can add up fast. I'm not a naysayer just a realist. It can be expensive out there . fuel in some places is $8-10. A gallon. I just eggs in the exumas were $10. A dozen. Its not cheap to feed 6 mouths. If one gets sick or hurt And needs medical assistance or transport or legal issues , who's paying for it? Some countries it could fall on the owners shoulders.
2. Interpersonal dynamics. I dont know 4 other people I could spend a year with in close quarters except my wife and even that's tough sometimes lol. We did 3 months on another boat recently and it was great for a while but I can see how it can snafu fast. Most of the boats that do this successfully swap out crew pretty regularly etc. We have friends etc fly in often to spend a week at a time and its great. I could see us having a 3rd for our boat for our upcoming pacific crossing and Asia cruising but still concerned about dynamics.
I think a more successful model is 4 good friends doing it 1 year, clear plan and expectations, duties etc. Or you get people to cover food etc and rotate em out regularly.

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[Shrew]

Fractional ownership can work. The models I've seen have been equal equity shares. This model of 50-10-10-10-10 will not gain a lot of traction. You're asking somone to put up an fractional equity share, then be a mate on a ship they own part of?

It would take a very special person who owns the 50 share to not be an A-hole.
I wouldn't be interested in fractional ownership where someone else gets the last word on everything because they are the majority shareholder.

[mdbrown]

An analogy to this model might be fractional ownership of aircraft. The benefit there is that you don't share the use of the aircraft at the same time as other fractional owners. When it is your turn, it is all yours. But in your boat model, you're sharing all the time.

I'd look at this as though you are all buying a portion of a house up in the mountains, where you all live there all the time. Like the previous post, I can't think of that many people I'd like to spend 100% of my time with. Even my best friends get on my nerves after a week.

Financially I think this is a great idea. Logistically, I think you could make it work. You'd have to figure out how to create a reserve fund for repairs, and some way to work through ongoing expenses (food, maintenance, insurance). Where I think this will fall apart is with the interpersonal conflicts.

[chris mac]

It's also not share holder if they own no part of the boat at the end, it's rent. And that essentially becomes charter for liability issues. If anyone gets hurt, sick or dies, you are financially responsible.
Partnerships are tough with strangers, tougher with friends.
The whole idea sounds great until you add people and their own personalities.
The only options for going younger that I see is
1. Work your but off and live frugally for a few years, then go
2. Greatly reduce your needs, buy small and go now
3. Find a generous benefactor(highly unlikely)
4. Crew, become a gypsy, jumping boat to boat, helping whoever you can to be on the water

[SV gypsy spirit]

Originally Posted by Dulcesuenos

Issues :
Money, 70k boat 45-50' will probably need a fair amount of work. And guessing 10-40k of work or upgrades. And anyone who says it doesn't cost much to refit a boat hasn't done it.

Absolutely. I bought my boat on the lower end of the scale and put probably 3-4 times the purchase price in it. And it took 3-4 times as long.
But as I assumed on the other thread, with 4 determined people, working on the boat could be fun and creating a bond for the future. I always worked alone on my boat, at least the very most time. I assume it's a completely different deal when you have 3 or 4 or even 5 folks, and the prospect of such a voyage.

So what $$ do you live off of?

That would be to the shareholders and captains discretion. It's not part of the idea here, and I would assume that both captain and potential shareholders have enough funds to live off of besides the share- and boat purchase.

One engine mishap, storm damaged rudder, rigging sails, and repairs $$ in a remote place can add up fast. I'm not a naysayer just a realist. It can be expensive out there .

But all that would happen to you if you have your own boat anyway. It happens to me all the time. It's part of cruising, and if you are not calculating for this, you are a fool at best.

If one gets sick or hurt And needs medical assistance or transport or legal issues , who's paying for it? Some countries it could fall on the owners shoulders.

Again, I would assume that the involved parties have enough funds and brains to take all necessary preparations and precautions to commence such a journey; e.g. abroad health insurance. I would also have them sign a waiver on this.

2. Interpersonal dynamics. I dont know 4 other people I could spend a year with in close quarters except my wife and even that's tough sometimes lol. We did 3 months on another boat recently and it was great for a while but I can see how it can snafu fast.

That's a point, but also, I don't know your age. Bold statement: Young(er) people tend to get along longer or tolerate more than old(er) people. Completely misfitting people would be identified pretty early during the refit and could be bought out. Also, the model is deliberately designed to give you the opportunity to take time off the boat, return, go back, and so on. It's not an obligation to stay aboard for the whole trip.

I think a more successful model is 4 good friends doing it 1 year, clear plan and expectations, duties etc.

Yeah, but that requires 4 good friends who have the same time frames, life plans, notions, money and dedication, and at least that's not the case in my situation. My friends either have families or are in full time jobs.

[SV gypsy spirit]

Originally Posted by Shrew

Fractional ownership can work. The models I've seen have been equal equity shares. This model of 50-10-10-10-10 will not gain a lot of traction. You're asking somone to put up an fractional equity share, then be a mate on a ship they own part of?

As said, the benefits are that you gain access to a world cruising boat for 2-3 years for the price of a 3-4 week charter. Also, you wouldn't have the liabilities and hassles of boat ownership. You can't buy a boat and sail the world for $6-7k. But that's the model I'm talking about - It's not fractional or shared ownership. It's about buying yourself into a model that grants you total and flexible access to a boat for a limited time frame that suits your life situation and -plan. Go cruising with interesting people for 1-2 years, then return to work, without many strings attached.

It would take a very special person who owns the 50 share to not be an A-hole.

Ha, I can't grant that of course. To some people I'd be an a-hole, to other not so much. That's why the selection process would be important I guess, on both sides.

I wouldn't be interested in fractional ownership where someone else gets the last word on everything because they are the majority shareholder.

I wouldn't see this as this much of a problem when it comes to a general agreement on the route and the modus operandi. There is almost some sort of standard route around the world, with many possible alterations. I wouldn't want to be on a boat with democratic decision-making processes either where nobody has the last word. I think an ocean going vessel needs a captain in charge with a big heart, who is open for suggestions and wishes, but in the end makes the decision based on experience, safety and knowledge (and a 50% share).

[Dulcesuenos]

I think if your looking for alternative models that would work, you already have a good headstart with a good boat that you know and have put a lot of work Into. Why not do it with maybe a few less people. Maybe 2 + you, and kind of a crew sharing expense deal. I agree, have a wavier, non paid crew statement and ask they have evacuation emergency hospitalization insurance. Its cheap 135 year ish. Met 3 on a 32' 2 years ago on a 6 month trip and they were having a blast! Your 37 should do great! I think at that point the biggest challenge is coming up with a food budget amount, customs, etc and is there a way to legally collect more for " other expenses" without them any legal liability. I think it should be easy to find someone who could afford 1000-1500 / month to experience the cruising lifestyle without having to buy a boat.

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[SV gypsy spirit]

Originally Posted by mdbrown

An analogy to this model might be fractional ownership of aircraft. The benefit there is that you don't share the use of the aircraft at the same time as other fractional owners. When it is your turn, it is all yours. But in your boat model, you're sharing all the time.

Exactly. It's NOT fractional ownership. Maybe I used the wrong words in the first place. It's basically buying into a group trip model, or being able to "live the dream" without having to buy your own boat, deal with all the liabilities and having to sell it after your adventure is over (or you run into problems).

I'd look at this as though you are all buying a portion of a house up in the mountains, where you all live there all the time. Like the previous post, I can't think of that many people I'd like to spend 100% of my time with. Even my best friends get on my nerves after a week.

And again, you'd pay 6-7k US$. For an opportunity to sail as much as you want for 2-3 years. If you want to come aboard for a certain fraction of the trip, a certain leg - go. If you want to hang out for 6 weeks in place XYZ, go. If you want to make some miles and do some passages, but then return home to nurse your business or take your girlfriend out for dinner without having to take care of your big fat depreciating liability called boat, go.

Financially I think this is a great idea. Logistically, I think you could make it work. You'd have to figure out how to create a reserve fund for repairs, and some way to work through ongoing expenses (food, maintenance, insurance). Where I think this will fall apart is with the interpersonal conflicts.

This tends to be the main point (interpersonal conflicts) - and I agree.
The challenge would be to develop an assessment procedure to find people who are actually working together. A team.

[SV gypsy spirit]

Originally Posted by Dulcesuenos

I think if your looking for alternative models that would work, you already have a good headstart with a good boat that you know and have put a lot of work Into. Why not do it with maybe a few less people. Maybe 2 + you, and kind of a crew sharing expense deal.

Although I now know every screw on my boat, it is unfortunately a couple's boat, with a v-berth and a main salon and that's it. It's perfect for a cruising couple, and it's a good, seaworthy tank that proved itself in some sh*t, but with friends, it becomes cramped very soon. It simply doesn't have the layout. This was one of the big things that made me want to sell my boat and get a different one, at least one with an aft stateroom or some sort of double quarter berth.

Also, as said, while some my close friends do enjoy sailing, they are very tied to their jobs and/or families. On top of that, most are not particularly big earners. I'm European (German) - but I don't think that matters much as my American friends basically deal with the same issues. So the idea would be to gather like minded people that fit together. I myself for example dropped out, bought a boat in Florida and sailed for the last 2 years, only occassionally going back to Germany to take care of some business. I've been traveling my whole life, and don't really have family and no real ties, so I'm looking for people that have the same fate and dreams.

I agree, have a wavier, non paid crew statement and ask they have evacuation emergency hospitalization insurance. Its cheap 135 year ish.

Even most european credit cards have that med-evac feature...

[SV gypsy spirit]

Originally Posted by chris mac

It's also not share holder if they own no part of the boat at the end, it's rent. And that essentially becomes charter for liability issues. If anyone gets hurt, sick or dies, you are financially responsible.

Besides questions of good seaman- and friendship, if I'd make them sign a waiver to not being held accountable financially, and have them particularly sign that this is NOT a charter but a shared expense world cruise, would I be financially responsible... I don't know.

Partnerships are tough with strangers, tougher with friends.
The whole idea sounds great until you add people and their own personalities.

Sure. I know. Believe me, I know. But this can be an interesting quest too. It's not carved in stone, and I do like the idea. I am open minded. Although I do have boat OCD and do expect human decency, dedication, common sense, cleanliness, and of course at least the means to support yourself.

The only options for going younger that I see is
1. Work your but off and live frugally for a few years, then go
2. Greatly reduce your needs, buy small and go now
3. Find a generous benefactor(highly unlikely)
4. Crew, become a gypsy, jumping boat to boat, helping whoever you can to be on the water

Or join my model

[chris mac]

As you already have a boat, this obviously doesn't apply to you.
Most posters I've seen like this either don't have the funds, or experience needed to do it on their own. Or more commonly, they are lacking both.
Most plans want to use others money and experience to make it work. Then at the end they want to keep the assets(boat). That is where it falls apart.
In any partnership everyone has to bring something to the table of equal value.
But you could have a fantastic adventure without much of either if you are willing to do it just for the experience. And work hard for it. At that point your experience level could turn it into a job.

[Shrew]

What you're describing is a charter.

[SV gypsy spirit]

Originally Posted by Shrew

What you're describing is a charter.

Sure, if you want to put it this way. It really has nothing to do with the usual bareboat- or crewed charters on the market regarding the involved payments or timeframes. The fact remains that people would pay money to be part of some sort of sailing trip. One could argue if the presence of an agreed on owner / operator / captain makes it a charter. Legally, I would assume so...

Example: If I organize an adventure vacation for 5 friends and myself, where I collect their money to organize the transport, plan the route and book accommodations for all of us, does this make me a tour operator with all obligations and liabilities of a professional?

I think there can be some sort of written agreement plus waiver between the involved parties and some sort of contract regarding the joint purchase of the boat that keeps the captain out of the woods legally and still everybody happy.

[SV gypsy spirit]

Originally Posted by chris mac

Most plans want to use others money and experience to make it work. Then at the end they want to keep the assets(boat). That is where it falls apart. In any partnership everyone has to bring something to the table of equal value.

I think that a lot of boat owners came to sailing in rather classic ways and can not imagine sharing their boats. Many, if not most cruisers are simply not very familiar with this way of thinking, for good reasons, and because they don't need to.

I think: It's "why buy when renting makes so much more sense". It's "why do it alone without having the means when I could do it in a group effort and have the same thing".

I think having a 2-3 year access to the fun aspects of sailboat ownership while paying 10% of what just the boat is worth and not having to deal with maintenance is "something of equal value" on the table.

I think people who COULD afford their own boats right away AND have still enough money for upkeep and to circumnavigate wouldn't be interested anyway.

It certainly needs the right type of person. I think someone who has this dream and simply can't or doesn't want to go the classic route of boat ownership and saving half a fortune till they're 55 for one reason or another.