Over the years, a number of creative ideas have changed the ways fans experience the sport of racing. Fractional ownership, or owning a fractional share of a racehorse, has become common through the formation of a range of racing syndicates and partnerships.
The common thread behind all current fractional ownership models is that it allows for greater access to the sport, and the ownership experience, at a fraction of the cost. Now, a company called MyRacehorse is further simplifying the process of becoming an owner, while dropping the barrier to entry to as low as $100. We spoke to Michael Behrens, the founder of MyRacehorse, about the company’s recent launch and what sets the ownership platform apart from all others.
Let’s start off with the obvious question: What is MyRacehorse?
MyRacehorse is a marketplace designed to allow every fan an opportunity to buy into a racehorse. Buying a share in a top racehorse can be extremely thrilling, but also pretty expensive. So we launched MyRacehorse by introducing our new product, the micro share. With our micro shares, you can get in the game with some of the top trainers, pedigrees, and ownership groups at a fraction of the cost.
How is horse ownership via MyRacehorse different than purchasing a share in a traditional racing partnership? Why would this model potentially be more appealing to an investor?
It comes down to accessibility. Our shares start as low as $100. Using our platform you can search different opportunities; some of those opportunities will be with partnerships, some with syndicates and others directly with an individual owner. You’re buying into some of the same horses you would if you joined a partnership directly, just at a smaller percentage.
What sort of access can a prospective owner with MyRacehorse expect once they’ve purchased a share in a horse?
You should expect to access a lot of the perks any owner would expect to receive. First is the exclusive content, including updates on the health/training progress of your horse, post-race assessments by the trainer and/or ownership group, updates on upcoming race options, workout videos and assessments, and often just some fun videos of the horse at the barn or the farm.
It is important to note that buying a micro share does not include/require an owner license, therefore the access is not the same, but still quite significant including: tours of the backside while your horse is at the track and even farm tours for those that may have purchased a horse that is not yet racing. Many trainers have also agreed to host different “meet the trainer” events. These events are free and are listed on the app several days in advance.
Race day also brings with it a number of options for micro share owners. First, we frequently hold ownership events at the track using some of their top accommodations. It’s a great chance to experience some of your local tracks’ best accommodations with a group of passionate co-owners. Prices vary as it is dependent on the room and the catering for each event.
Another race day option we have are race day owner’s badges. With an owner’s badge you get premium race day seats, access to the paddock before the race, and if you happen to be lucky enough and your horse wins that day, winner’s circle access. An owner’s badge can be acquired in two ways. You can enter a lottery or you can bid on a badge in an auction. The auction will be released in our next update, so for the next couple of races it will all be the luck of the draw.
The name “MyRacehorse” implies direct ownership of a horse but clarify, as best you can, what each horse investor owns when they purchase a share. Do they receive purse earnings when a horse wins? How are the bills for horse upkeep and training accounted for?
With our micro shares you are actually investing in a new company that has just one asset, a share in the racehorse. As a shareholder in that company you are absolutely entitled to the race winnings and any revenue from the sale of the horse. You are also responsible for the expenses to train and care for the horse. However, we never require an additional investment beyond the original share price. When you purchase a share, part of the money is going to pre-paid training fees. This money is held in escrow and, in conjunction with horse earnings, is used to pay for their expenses. Revenue generated from the horse, that exceeds the cost of caring for the horse, is periodically distributed to the shareholders. When the horse is retired, sold or claimed, and all expenses are paid, all the remaining funds are distributed to the shareholders.
In a couple of months, we will be launching MyRacehorse premium shares which in many cases will be direct investments that will be a more significant percentage and do entitle/require a license. We will curate opportunities from partnerships, syndicates, and individual owners that are seeking new partners. The app will allow you to compare pedigrees, progeny stats, horse valuations, expenses, conformation, past performances, and auction histories, along with customer reviews and stats of the ownership groups and trainers that are listing the horse. Our goal is to provide as much transparency, information, and analytics to prospective investors as possible.
Who is the target investor in MyRacehorse? Who should this type of ownership experience appeal to most?
At this stage it’s all about new owners. As the marketplace grows there will be more and more products and features that will be attractive to the more seasoned horse investor, but for now, with our launch of the micro shares, it’s really about allowing anyone who has ever thought about ownership a way to get in the game.
Can anyone join My Racehorse? What are the plans for expanding access to residents of states outside of California?
A MyRacehorse micro share is a real share of stock issued under permit by the State of California Department of Business Oversight, and therefore we’re only offering our micro shares to California residents who are 18 years or older at this time. It requires significant time and money to build the legal/investment framework to take non-accredited investors, so we decided to start off in California. We plan on launching the national product later this year. We are also working on a launch in the U.K. which we expect to be in 2019.
Where should people go for more information on joining My Racehorse?
The MyRacehorse app is currently available on Apple and Google Play. You can view the horses and make your purchase directly from the app. You can also get more information at our website, www.myracehorse.com.