Once again the Savings and Loan needs help
 

Looks like George Bailey is asking again.

Every time a bell rings, an angel gets its rain poncho.

I donated. It's a good company even if you're not a classics nut.

I'm not into most of that expensive new stuff, but at a minimum there's good tools/stems/handlebars there that makes the future discount well worth it.

If you didn't click the link, it's $100 now to get $128 worth of stuff later. Available in increments of $25.

I didn't do the gift certificate thing, but I bought some more GOAT gloves and that cool adjustable wrench.

I think I get RBW, but I don't get RBW. They (he) is quirky in a brilliant sort of way. Or brilliant in a quirky sort of way.

What they are doing is a smart move. By staying away from banks, they avoid a lot of hassle, red tape, scrutiny, and "must perform to meet obligation". It's not cheap money, it is very quick and handy money, and they can probably absorb the 28% cost of money in their markup.

Reading between the lines, I get the feeling that they have a two-ton box truck that has two and a half tons of canaries in it. Someone has to hang on to the side of the truck and bang on it to keep a half tone of canaries in the air. They are in a cash crunch and don't have the reserves to deal with it, so they have to turn to investors. They are running a bit tight but overall they are solid. And, they've chosen to go to very friendly investors.

RBW is not my cup of meat, but it was an interesting read.

No thanks. I did this in 2018. When I finally got around to redeeming my credit a couple years later I was told that it had expired. It seems that good faith only goes one way.
Brent

What’s the total weight if all the canaries are in the air?

That sounds shady. I seem to recall in California you cannot sell gift cards with expiration dates.

Oof. At 28% It’d be more financially prudent to deal with the red tape of opening a line of credit at a bank.

The 28% is simple interest. You borrow a buck, you pay back a buck 28 when you pay off.

A bank loan will be amortized at a rate and in a manner commensurate with the bank's risk exposure. It's hard to pin down what the loan structure would be regarding rate and amortization without knowing RBW's complete financial and past performance picture. However, if they are willing to pay 28%, I'd expect that they are looking at a rate of more than 10% for more than two years. The 28% is more than they would have to pay a bank, but not egregiously so nor unaffordably so. It also has the benefit of putting RBW in control of the 'venture capital' and avoiding the loan process, the oversight, and having the loan payment hanging over their heads.

By selling gift cards and giving an extra 28% credit, they only have to pay back that 28% if the investor buys something. And when the investor buys something, they are buying something that costs RBW 25 cents, which RBW is selling for a dollar. The profit may be less than it would otherwise be, but the markup covers the 28% credit obligation. The customer generates the cash flow to pay the obligation. If they owe the bank a monthly payment, they must make that payment even if not a single dollar shows up in the till for the month. In a sense, it's a bit of borrowing from Peter to pay Paul, but it works out.

What would be really nice is if they had a cash reserve to tide them over these cash-flow crunches, but that can be hard to do when your business model is selling things that are very nice but not necessities. You are really subject to fluctuations in the economy's pool of discretionary income.

That's an impossible scenario because canaries take up much more space when they are flying than when they are just strutting around on the floor. They couldn't all fit in the air.

It also depends on whether they are African or European.

And whether they are carrying coconuts.

Unless their FICO score is a mess. Sounds like their only other choice is a credit card. But those folks want all their money. Grant probably knows there are certain number of huckleberries who won't claim their "gift certificate". The 28% could be significantly less.

I've purchased items from RBW in the past, and I probably will in the future, but I'm 99.9999% certain I will never purchase one of their bikes (same is true for Velo Orange on both counts). I even participated in the 2018 bailout/rescue plan. I'll pass this time.

I :foo: just can't wrap my head around how they continue to overextend and find themselves backed up against the wall--- with a hand extended--- and basically begging.

I suppose, in their worldview life is all pink (albeit only in B&W photos shot on Kodak 100 film) ponies, unicorns, and glittery rainbows. In the real-world people/companies take full responsibility for their actions and make decisions based on the resources they have with reserves put aside for contingencies.

And I say this as a pastor who had his hand extended every year to church members. BUT I never overspent their trust, underappreciated their generosity, or pushed them into frivolous endeavors which would bleed their reserves.

Well :50: that's enough preaching on my part.

Well that is disappointing to hear. I remember the 2018 handout request but didn’t participate or follow very closely. Since then I’ve come to own a Rivendell, which I like very much and follow the brand fairly closely. That gift card would have come in handy a couple of months ago when I bought a stem from them for the price I could probably sell one of my old racing frames for.

Rivendell framesets sell out within weeks of becoming available and many of their components and accessories on the site are frequently sold out. This seems to me an effort to finance the Silver component line, which is niche and faces strong competition (the diagram on the ad even has Microshift branding). If they have to finance lugs and fork crowns this way instead of from the gross from frame sales, something is amiss. I guess maybe they had such success by stiffing people like Brent last time, they figure it’s better than seeking investors like every other business out there.

Must admit I was surprised to see this, inasmuch as they seem to sell out everything very quickly.
Agreed that this was/is a most unusual method to increase immediate cash flow.
Also interesting that there’s no mention of this on the RBW Owners Bunch thread. Perhaps it’s more ‘moderated’?

While Gift Cards in the Golden State cannot expire, my guess that technically what Riv was offering was store credit? Probably not the same thing legally.

that rear derailleur probably hoovered up a bunch of capital. Financial planning is tough.
As to going to a Bankster for funds, Banks are very willing to loan at prime plus X if you do not need the money. A business needing funds? Too risky even with a good track record of supplier payments.

I did not apply for a PPP loan during the pandemic. I should have but so it went. A large customer took my work inside soon after, they needed 6 times the labor force to do that and wasted lots of materials, but that was the price to present they were vertically integrated. The biz sold in 2022. The private equity firm that bought them is not achieving what they want yet.

If I was going to invest in something that might not pan out I'd go with I'M Back digital film cassette. I almost jumped on the band wagon a few years and I'm glad I didn't because it's about 4 years and nothing has come to market. I'll wait and see and after the introduction price drops by 50% I'll get one.

https://tse1.mm.bing.net/th/id/OIP.e...=Api&P=0&h=220

I'm not sure I ever spent more than $20-30 at RBW, they have even less stuff I liek than Velo Orange

People will be buying gift cards. The face value of the gift card should be good forever. RBW will be giving store credit for the 28%. The expiration on that is not governed by the gift card regulations, though it would be if you bought a gift card and they issued you one at 128% of what they charged you for it. But that ain't the case.

To understand the expiration of the store credit portion of the deal, the fine print would need to be read. I doubt that RBW is violating any laws, statutes, regulations, or rules. They may be a bit less than transparent in their disclosures, and that's a bit of a shame if true. What we need are business people who voluntarily make 'Gotchas' spelled out in large print.

Ah, Pollyanna, vo bist du?

There is an outdoor company based in Seattle that pays their members a dividend. While I doubt this is still the case, for many years, they counted on unclaimed dividends to cover some operating costs.

They have, or had, a nice climbing wall at the headquarters store. I have failed to claim my dividend. We are more diligent about that now.

Not a fan of grant or his bike's. Some people never grow out of that hipster contrarian stench... So my glasses lenses are definitely tinted. But this sounds like this local coffee shop that wanted to buy a coffee roaster and instead of either saving up or getting a bank loan to get it they did a GoFundMe to get it. Meanwhile all the owners had nicer cars/bicycle's than their employees, wore $1000 outdoorsman apparel on the regular and owned their own homes. I couldn't believe that people fell for that BS.

a Founding Father

https://cimg3.ibsrv.net/gimg/bikefor...4cb3d11d62.jpg

And Contrarian ? ? What did think the C&V actually means ? :roflmao2: