Does anyone have any experience starting up a syndicate or partnership? I'm talking about partnerships similar to that of www.ownersstable.com
I have a few people interested in getting into horse racing and I know I would be able to find a few more people to help raise all required funds. I've been reading a lot on how these LLC's work, and was just wondering if anyone who has done something similar could give more info, or any tips/warnings.
Thanks.
Racing Syndicates/Partnerships
Moderators: Roguelet, hpkingjr, WaveMaster
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Agent Zero
- Weanling
- Posts: 29
- Joined: Sat Apr 07, 2007 7:29 am
- Location: Woodbine
I do - On a VERY SMALL scale. This one looks fairly large.
One thing I will warn about is people are interested until you ask for the CASH. I really think if you want to make this a business you have to personally have the cash to buy horses up front and sydicate them afterward, possibly after a race.
I think you have to start small and build. But to really get a business like this off the ground you need lawyers, accountants and money to shield yourself and be more reputable to potential partners. The start up costs strat to creep up.
One thing I will warn about is people are interested until you ask for the CASH. I really think if you want to make this a business you have to personally have the cash to buy horses up front and sydicate them afterward, possibly after a race.
I think you have to start small and build. But to really get a business like this off the ground you need lawyers, accountants and money to shield yourself and be more reputable to potential partners. The start up costs strat to creep up.
Hi AgentZero,
Racing is all about partnerships. Even Curlin is owned by partners but these are limited in scope compared to what you’re apparently looking to do. The more that you intend and do sell to people that you don’t know and that are less acquainted with the risks and rewards of racing the more problems that you’ll confront.
You ask a question that’s actually very broad in scope without additional information about how you intend to implement the partnerships. I assume that you will be the general partner.
As a note, partnerships that both race and breed are generally a poor proposition for the partners, especially the new ones. It’s a natural conflict of interest and there’s a lot of room for manipulation. Partnerships that own the broodmare and her resulting foal through their sale or racing career are more equitable.
1 - Draft syndicate/partnership rules and regulations and how you intend to implement and enforce them. If you can’t enforce the rules then you’ll have nothing except debts that you will (probably) have to pay personally. As general partner you will have to direct (personally or otherwise) collection of the monthly maintenance and other monies that are due. Partnerships that try to front load maintenance costs often hamper sales and can incur additional accounting costs. I assure you that catastrophic vet bills are a bitch to collect from partners that have lost hope that a horse will race.
2 - Write a detailed Business Plan that includes how you anticipate making a profit. If you want to make this a non-profit venture then I’d advise that you stop now and buy a horse with some friends that are trustworthy and who clearly understand the risks and rewards involved (so that you remain friends).
3 - Be ready to engage an accountant and attorney that are familiar with racing. You’ll need the accountant to prepare partnership statements on a periodic basis and to advise on tax implications. The attorney should (at the least) review and amend your partnership rules and agreements and I’d let them draft your disclosure and disclaimer statements. I would ask for their advice on what type of corporate status you should have and what materials should be given (and signed if needed) to prospective partners.
The allure for fractional partners is to enjoy the benefits of ownership without incurring all of the cost. These partners usually want to have access to the trainer, the horse, the backstretch and hopefully be in the winners’ circle.
High profile trainers are great to have as sales tools but if you don’t have clout with them (as in several horses) they usually won’t have the time or desire to deal with many owners that would like to speak with them nor to ‘entertain’ and give barn access. They usually have higher day rates that will leave less margin for profit for you. You’ll probably find that lower profile trainers will have more time for you and your partners, have a lower day rate (or be flexible) and be more willing to work with you and any other advisors in acquiring stock and racing horses. If you’re friendly with a trainer that you anticipate using I advise stepping back and evaluating if they will be able to fulfill the goals and needs of your partnerships.
I saw in your profile that you’re at Woodbine and I assume that you want to race there. I’m very familiar with Canadian racing and the purse to expense structure is one of the best available in North America. It’s as good a place as any to start.
Unless you have extensive experience as an owner I’d consider hiring an advisor at least until you have your business off the ground. Trainers should not be used to select breeding stock. If they have the requisite expertise they are in a tiny minority. I don’t wish to paint all trainers with this brush but you should have a second source of advice on acquiring racing stock at least until the trainer has proven their mettle. If you’re claiming horses then I’d be more inclined to use the trainer alone.
4 - Based on your Business Plan write an Implementation Plan that includes how, where and why you will acquire stock. How you will use the stock, how and when you will divest the stock. What trainer you will use and why. Where you will stable and race, etc. This will be all the practical details about how you intend to operate your business. It should be close to the information that you would give to prospective buyers.
5 - Prepare a sales plan that includes advertising budgets and strategies. Consider hiring a professional salesman that can focus on sales while you take care of relations and racing. The salesman will insulate you, as the general partner. Remember that you will be the face and voice of the business.
6 - Make a plan of partner privileges. If you’ve not done so, hire a company to make you a simple web-site. Decide if you will have the partners be able to communicate with each other or not. Detail the benefits that you will be able to offer prospective partners.
That should give you some food for thought and good luck.
Regards,
Pete
Racing is all about partnerships. Even Curlin is owned by partners but these are limited in scope compared to what you’re apparently looking to do. The more that you intend and do sell to people that you don’t know and that are less acquainted with the risks and rewards of racing the more problems that you’ll confront.
You ask a question that’s actually very broad in scope without additional information about how you intend to implement the partnerships. I assume that you will be the general partner.
As a note, partnerships that both race and breed are generally a poor proposition for the partners, especially the new ones. It’s a natural conflict of interest and there’s a lot of room for manipulation. Partnerships that own the broodmare and her resulting foal through their sale or racing career are more equitable.
1 - Draft syndicate/partnership rules and regulations and how you intend to implement and enforce them. If you can’t enforce the rules then you’ll have nothing except debts that you will (probably) have to pay personally. As general partner you will have to direct (personally or otherwise) collection of the monthly maintenance and other monies that are due. Partnerships that try to front load maintenance costs often hamper sales and can incur additional accounting costs. I assure you that catastrophic vet bills are a bitch to collect from partners that have lost hope that a horse will race.
2 - Write a detailed Business Plan that includes how you anticipate making a profit. If you want to make this a non-profit venture then I’d advise that you stop now and buy a horse with some friends that are trustworthy and who clearly understand the risks and rewards involved (so that you remain friends).
3 - Be ready to engage an accountant and attorney that are familiar with racing. You’ll need the accountant to prepare partnership statements on a periodic basis and to advise on tax implications. The attorney should (at the least) review and amend your partnership rules and agreements and I’d let them draft your disclosure and disclaimer statements. I would ask for their advice on what type of corporate status you should have and what materials should be given (and signed if needed) to prospective partners.
The allure for fractional partners is to enjoy the benefits of ownership without incurring all of the cost. These partners usually want to have access to the trainer, the horse, the backstretch and hopefully be in the winners’ circle.
High profile trainers are great to have as sales tools but if you don’t have clout with them (as in several horses) they usually won’t have the time or desire to deal with many owners that would like to speak with them nor to ‘entertain’ and give barn access. They usually have higher day rates that will leave less margin for profit for you. You’ll probably find that lower profile trainers will have more time for you and your partners, have a lower day rate (or be flexible) and be more willing to work with you and any other advisors in acquiring stock and racing horses. If you’re friendly with a trainer that you anticipate using I advise stepping back and evaluating if they will be able to fulfill the goals and needs of your partnerships.
I saw in your profile that you’re at Woodbine and I assume that you want to race there. I’m very familiar with Canadian racing and the purse to expense structure is one of the best available in North America. It’s as good a place as any to start.
Unless you have extensive experience as an owner I’d consider hiring an advisor at least until you have your business off the ground. Trainers should not be used to select breeding stock. If they have the requisite expertise they are in a tiny minority. I don’t wish to paint all trainers with this brush but you should have a second source of advice on acquiring racing stock at least until the trainer has proven their mettle. If you’re claiming horses then I’d be more inclined to use the trainer alone.
4 - Based on your Business Plan write an Implementation Plan that includes how, where and why you will acquire stock. How you will use the stock, how and when you will divest the stock. What trainer you will use and why. Where you will stable and race, etc. This will be all the practical details about how you intend to operate your business. It should be close to the information that you would give to prospective buyers.
5 - Prepare a sales plan that includes advertising budgets and strategies. Consider hiring a professional salesman that can focus on sales while you take care of relations and racing. The salesman will insulate you, as the general partner. Remember that you will be the face and voice of the business.
6 - Make a plan of partner privileges. If you’ve not done so, hire a company to make you a simple web-site. Decide if you will have the partners be able to communicate with each other or not. Detail the benefits that you will be able to offer prospective partners.
That should give you some food for thought and good luck.
Regards,
Pete
Has a palomino jean that pop up some.
This stallion is DNA ... all foal can be MBNA inrolled.
Horses like their credit cards. - Four Forty Farms
This stallion is DNA ... all foal can be MBNA inrolled.
Horses like their credit cards. - Four Forty Farms
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Agent Zero
- Weanling
- Posts: 29
- Joined: Sat Apr 07, 2007 7:29 am
- Location: Woodbine
Hey Pete
Thanks for the excellent advice. I have considered most of what you had stated already but the additional information is very valuable. This plan wasn't for immediate start, but when/if I ever do decide to go through with this, I will definitely use these instructions as guidelines.
Thanks again
Thanks for the excellent advice. I have considered most of what you had stated already but the additional information is very valuable. This plan wasn't for immediate start, but when/if I ever do decide to go through with this, I will definitely use these instructions as guidelines.
Thanks again
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Maureen
- Allowance Winner
- Posts: 464
- Joined: Sat Jan 01, 2005 10:48 am
- Location: Ontario. Canada
- Contact:
Agent Zero. Please check out the Thoroughbred Niagara website. We are in the process of setting up a syndicate with Barbara Minshall as trainer, racing at Woodbine. Shares are $2500. with a maximum of 20-25 shares being sold.
www.thoroughbredniagara.com
www.thoroughbredniagara.com