X-Message-Number: 6560
From: Brian Wowk <>
Date: Fri, 19 Jul 1996 11:50:34 -0500
Subject: Prometheus: Who gets it for free?

Paul Wakfer writes:

> At first your idea of royalty free use of
> the technology for all pledge/share purchasers seemed like a great idea to
> me. But on second thought it is not right again to apply it equally to all
> sizes of pledge/share purchases. I am going to suggest implementing the idea
> in two parts.

> 1)   All pledge/share purchasers will have the right to use their shares as
>      technology credits towards their own suspensions or the suspensions of
>      "family" in the same way that cryonics organizations can.
> 2)   Pledger/share purchasers of $5K per year or over will pay no royalties
>      on their own suspensions.

	The concept of Technology Credits imposes a firm mathematical
relationship between royalties, technology credit per share, and the
market value of shares upon the completion of the Project.  Specifically,

			      Royalty per cryopreservation case 
Market Value per share =  -------------------------------------------- 
	        Number of shares that can be exchanged for a royalty waiver

	This is a minimum market value per share because it doesn't assume 
that the company will ever make money.  I think all planning should proceed
on this conservative basis because we really don't want investors who 
are "in it for the money".  We want contributors who personally want the
technology.  Accordingly, shares can be conservatively valued in terms of
the cost of the technology they can be exchanged for. 

	Where does this leave us?  Neglecting the time value of money,
and assuming we want to avoid share depreciation, Paul's suggestion to
allow royalty-free access for $5K per year contributors effectively
pegs the royalty at $50,000 per case.  I think this is near the maximum
the market will tolerate (pusing the cost of neuropreservation to over
$100,000).        

	However there is a problem.  We must plan for share *appreciation*,
not stagnation, so that people who stay on the sidelines will pay more
for this technology than those who help develop it.  Accordingly, the
contribution threshold for royalty-free access must be lowered to
something like $2K per year (or the royalty raised, which IMHO is not
tenable).
 
	I know this is not conducive to raising the larger pledges that
the Project will need to succeed.  However we are constrained by two  
important factors:

	* Setting a post-project royalty affordable enough so that
	  the Project will not become an exclusive immortality club
	  with no market appeal beyond the original contributors.

	* The need to reward original contributors by offering 
	  to exchange shares for technology credits worth
	  more than they paid for their shares.   

I think these two considerations require a royalty of no more than
$50,000 and at least $2.50 of technology credit for each $1.00 share
purchase. 

	Further discussion is welcome.

***************************************************************************
Brian Wowk          CryoCare Foundation               1-800-TOP-CARE
President           Human Cryopreservation Services   
   http://www.cryocare.org/cryocare/

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