Fractional Ownership Creates Liquidity

A discussion about how Rally Road creates liquidity for traditionally illiquid assets through fractional ownership, using Michael Jordan's house as a case study.

Core Concept of Fractional Ownership

• Takes non-liquid assets and makes them liquid through fractional shares
• Allows smaller investors to own pieces of expensive collectibles
• Reduces entry barriers by lowering minimum investment amounts
• Creates trading opportunities between fractional owners

How the Model Works

• Assets are divided into smaller investment blocks
  • Example: $25,000 Harry Potter book set split into $150 shares
  • Example: $15M house could be sold in $1,000-1,500 blocks
• Investors can trade shares with other interested buyers
• No need for single wealthy buyer to purchase entire asset
• Voting rights given to shareholders for major decisions
  • Example: Shareholders can vote on buyout offers

Real World Examples

• Full House residence in San Francisco
  • Sold for 1.5-2x market rate due to cultural significance
  • Constant tourist attention (4+ people always taking photos)
• Pokemon card set on Rally
  • Received $85k buyout offer after $50k IPO
  • Shareholders voted to hold rather than sell
  • Shows long-term investment mindset of collectors

Investment Philosophy

• Not focused on cash flow generation
• Value based on collectible/historical significance
• Long-term appreciation potential
  • Example: Michael Jordan's fame value in 20+ years
• Attracts collectors rather than traditional investors
• Makes previously inaccessible assets available to broader market

Liquidation Strategies

• Occasional full buyout offers from large investors
• Continuous trading between fractional owners
• No requirement for immediate exit strategy
• Focus on long-term value appreciation
• Voting mechanism for major sale decisions