X-Message-Number: 6605
From: Brian Wowk <>
Date: Thu, 25 Jul 1996 00:51:20 -0500
Subject: Reply to Brad Templeton
Brad Templeton writes:
>In general you can not just take investment from anybody for a venture like
>this. The investors must be participants in the company or qualify under
>the law as "savvy investors" -- people who are rich, experienced at
>investing or work in the investment business.
The type of investors you refer to are called "accredited"
investors. However, in addition to accredited investors, a new private
company can have up to 30 non-accredited ("ordinary Joe") investors.
Alternatively, a new company can pay about $50,000 to become
fully SEC registered (essentially a public company) allowing an
unlimited number of non-accredited investors. At some point next
year the pledgors will have to decide whether they want to make their
pledges via their cryonics organizations (to go toward their cryonics
funding), or whether they want to own shares outright. If the latter
is decided, full SEC registration appears manditory given the number
of people involved.
>As far as I know your pledges are entirely non-binding because securities
>law forces them to be. If you think you are soliciting binding pledges for
>investment then you are attempting to sell securities and you are not
>following the rules.
Absolutely. The Project (at this stage) is not an investment
solicitation, but an attempt to measure support for a radical advance
in cryonics technology. The simple truth is that this Project would
never have got started if a detailed business plan and prospectus was
drafted at the beginning. Why? Because
a) There have been too many fundraising failures in cryonics
for someone to spend hundreds of hours preparing such
materials before knowing whether the support was really there
or not.
b) A finished business plan is a take-it-or-leave-it
proposition that leaves no room for accomodating ideas or
input from contributors.
I think Paul Wakfer deserves a lot of credit for the idea that
Project planning can proceed incrementally, and in proportion to
contributions pledged. It remains to be seen whether the diverse
visions of all the plegors can ultimately be reconciled, but this
much is certain: Compromise and mutual understanding will be much
easier to achieve at the END of the campaign, when people KNOW that
$10,000,000 of research is at stake, rather than at the beginning
when people can spend years in pointless debates because there is
no obvious cost to the debate.
> What is the evidence this can be done in 10 years? In general
> never-before-done science like this, particularly on
> the most complex organ in the body, is far from a slam
> dunk. You can't just throw money at it and say you will
> get a result after X dollars and Y years.
That's what the Red Cross did a decade and a half ago, knowing
only a fraction of what we now know about organ cryobiology, and with
an objective (kidney banking) that is trivial compared to our motive
for wanting brain banking.
Even with the limited knowledge available at that time, the
Red Cross knew from the arguments presented in the grant applications
(approaches to be tried, expense of trying them, reasoned probabilities
of success) that organ cryopreservation was (and is) a multi-million
dollar problem. Not a billion dollar problem, not a trillion dollar
problem (like nuclear fusion appears to be), but by nature a
seven figure problem-- and therefore worth a shot.
Today we have some of the best minds in cryobiology (minds
benefitting from that edifice of knowledge created by the Red Cross)
telling us that brain cryopreservation is also most likely a
seven figure problem. Furthermore, they can now point to the
success that has been achieved with the kidney thus far as proof
that dramatic improvements in organ cryopreservation quality can
be achieved on a million-dollar budget.
No, the Project objective is not a slam dunk. (Neither
was going to the moon "within the decade" when Kennedy made his
speech in 1962). But it stands a good chance of success within
the budget of time and money that has been allocated. Perhaps
more importantly, once this project is off the ground, the
publicity it will generate, and breakthroughs it will report,
will likely draw whatever extra support is required to bring
the work to completion.
The key is to get this Project off the ground. It's time
for cryonicists to show the world that when we talk about moving our
minds into the future, we mean it!
> Who are the people stating this can be done? What are their
> credentials? What do other cryobiologists think of
> their work, and this work in particular?
People who think that this project has a good shot at
success include leading cryonics researchers such as Mike Darwin
(who has published the most thorough studies of brain cryopreservation
protocols to date), and at least one professional cryobiologist and
organ cryopreservation expert who wishes to remain anonymous at this
time.
> Who will be performing the research? What are their credentials?
> Is it the people who did the kidney?
It is anticipated that a top-flight professional crybiologist
will be retained to lead this research, and that access to vitrification
technology will be obtained.
> Who will administer the research? What experience do they have?
> What salary will they get? How many research projects on
> unsolved questions have they managed?
The Project budget is as high as it is precisely so that
scientists and managers with solid credentials and track records can
be retained.
> What are the approximate budget breakdowns for staff, equipment
> and administration?
Too soon to say, except that every effort will be made to
get maximum research effort the dollar. I expect a spartan
adiministration, with no need for expensive corporate offices,
marketing departments, or the usual business extravagances.
The chief focus will be on getting the job done.
> Is this charity or is this investment? What evidence is there
> the process can be patented? What are the projections for
> its market? Why?
This is money being spent to save your life, and to affect the
most fundamental change in medicine since anesthesia was invented
(perhaps accruing some fame in the process). It's not charity
(because you will benefit personally in proportion to your contribution)
and it's not investment (because the Project is not being undertaken
on the expectation of monetary gain).
Look at it this way: Suppose our home planet, Krypton, is about
to explode. Most people don't know or care that it's going to explode.
A group of us is going to start a company to build escape rockets for
ourselves and our families. Is this charity or investment?
> Since the pledges are non-binding, what happens when they get to
> $1M but then 30% pull out when they see the details?
We can either give up, or raise another $300,000.
With the lives of me and my family at stake, I choose the latter.
> What happens when 5 years into the project, without enough results,
> other investors stop putting in the annual money?
The plan is for the share purchase agreements to be legally
binding, with escape clauses only for unanticipated hardship. In
addition, fund raising will continue *during* (and perhaps be buoyed
by) the Project execution.
> What percentage of the equity do investors get? I will presume
> all of it, less a small pool for stock options for
> staff.
That's my understanding.
> When will the first election of the BoD take place?
I assume when the pledge target is reached, and a company is
formed, ideally 18 months from now.
***************************************************************************
Brian Wowk CryoCare Foundation 1-800-TOP-CARE
President Human Cryopreservation Services
http://www.cryocare.org/cryocare/
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(Speaking for himself)
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