Asset Fractionalization Model

A breakdown of how companies are creating new investment opportunities by fractionalizing traditionally illiquid assets into tradeable shares.

Rally's Asset Fractionalization Model

• Takes non-liquid assets and converts them into liquid, tradeable assets
• Creates fractional ownership opportunities for expensive items
  • Examples: Michael Jordan's house, Harry Potter first editions, rare Pokemon cards
• Enables smaller investors to participate
  • Investment blocks of $1,000-$1,500 instead of full asset price
  • Makes collectibles accessible to average investors

Exit Mechanisms

• Buyout offers from large investors
  • Requires shareholder vote to approve full buyout
  • Example: Pokemon card set IPO'd at $50k, received $85k buyout offer
• Long-term hold strategy
  • Many investors plan to hold for appreciation
  • Value drivers include celebrity events (like "The Last Dance" documentary)
  • Death or major life events of associated celebrities

Big League Advance Model

• Offers upfront payments to minor league baseball players
• Takes percentage of future earnings in return
  • Example: $100k for 1% of future earnings
  • Or $350k for 8% of future earnings
• Investment strategy
  • Uses analytics to value players
  • Expects 80% of deals to lose money
  • Aims for 20% to provide huge returns
  • Example success: Made $30M from Fernando Tatis Jr.'s $340M contract

Similar Business Models

• Pipe: Converts SaaS revenue into tradeable assets
  • Buys future contract revenue at discount
  • Provides upfront capital to businesses
  • Investors receive ~12% return

Key Success Factors

• Accurate valuation methods
• Strong analytics capabilities
• Ability to identify high-potential assets/players
• Understanding of market inefficiencies
• Risk management across portfolio