I recently received a good question about Southern Cryonics investor membership and thought I would post it here. I have edited a little for readability. It may be something others are asking.
I note that you are looking for further “investors”. I am in a position to contribute $50K but would need to feel pretty secure before committing the funds. Does the $50K also include transport and standby?
If you are able, please provide as much information as possible and any legal documents that I may need to complete. As you advised earlier the cost of building the facility was underestimated. What guarantees can you give that the facility will be built this time round? If it isn’t is the money returned? Can you also discuss how Southern Cryonics will ensure its longevity. Many businesses falter after years or decades so this is another concern.
Thanks for your note. Yes, we are still looking for investors. We are tackling the project very prudently and want to be as sure as we can of its success. I may have written previously that my background is in long term planning, strategic planning, financial planning and major project “hands on” implementation.
Let me try to answer your questions and , as I hope I always am, be very straightforward.
Firstly, let me say there are no guarantees. As I have informed all our investors this is similar to a business venture. There is always some risk. You will need to measure the risk versus the benefits. I have my own money involved and feel very responsible to the investors so I am trying to minimise the risk, but it cannot be eliminated.
The $50,000 does not include standby and transport. If you are in NSW this will be about $10,000 (in today’s dollars). Add shipping by plane (and possible travel for those doing the standby) as you go further afield in Australia.
There are not really any legal documents except for simple application for membership. I will include a copy of our constitution because the application says that you will adhere to that. You would be a member of a non profit organisation. Legally it is a public company limited by guarantee. Basically this means that there is no monetary return on your investment. Also any invested funds cannot be returned. Of the commitment of $50,000 all investors have put in $13,000 so far. As you can see we are calling up the funds as we need them. The reason is what I mentioned before. That once in, funds cannot be returned. All this is in the constitution.
I can’t give any guarantees about when the facility will be built. Because of many other factors (government requirements, timing in trying to find suitable land, priorities etc) we have been delayed and costs are higher, but I am not going to now “knee jerk” and proceed unless I am reasonably confident of viability. I have a lot of experience in much larger projects than this and you can rush things now only to have major problems 5 to 10 years down the road. I have some detailed modelling of our long term chances of success and will be only going forward when I feel convinced we are really ready. No one call tell what will happen in the future, but I am trying to minimise our downside risk over the longer term.
In investing in Southern Cryonics (SC), you will need to balance the risk versus the benefit. The same as others have done. Let me give you some information which may help.
I am not sure of your age. Say you are 40 and that you do not need to be suspended for another 50 years. The following examples are simplified broad numbers, but they will give you an idea of options.
If you go with the investment in SC of $50,000, in 50 years you pay nothing more $50,000
plus say $15,000 for standby/transportation with inflation i.e. about $65,000
TOTAL COST IN 50 YEARS $115,000
If you go with life insurance you will need to be insured for about:
$100,000 proposed current Southern Cryonics fee plus inflation $438,000
Standby and transportation in 50 years $65,000
TOTAL AMOUNT OF LIFE INSURANCE NEEDED about $500,000
To get this level of life insurance will cost you an average of about $5000 to $6000 per year. I know it appears high, but it will be something like $600 a year now (if you are about 40), but wait until you are above 65 years old. It will escalate very quickly. The $5,000 to $6,000 is if you want to lock in “whole of life” insurance at a fixed rate. These are only my estimates. A proper insurance broker will need to give you the real quotes.
If you cannot get life insurance, you will need to raise the $500,000 in 50 years time. If you currently have $50,000 and can get about 5% return after tax over the 50 years, that will give you the $500,000 you need. In a sense the $50,000 now is equivalent to the $500,000 in the future.
Of course if you needed to be suspended about 5 to 10 years after the facility is built, and were not an investor, you would need about $120,000 to $140,000. If you only have $50,000 now and no life insurance you will not have the funds.
The $50,000 is like a prepaid insurance policy. It covers you at any time after the facility is operational.
Hope that helps.