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Published December 27, 2012

One of the biggest challenges facing young alliances is that they lack the funds to embark on major infrastructure projects. This was something that GENTS faced in the days after its founding, when we moved into two constellations in Fountain that didn't actually contain station. We had no home station and no isk in the alliance wallet. We solved this problem by selling alliance bonds, allowing members - who often had much deeper pockets than the alliance itself - to put their isk to work while also improving conditions for the alliance as a whole. Since it worked so well for us, I wanted to share this strategy with others in hopes that it can help newer alliances with their own projects.

GENTS sold bonds at 900 million isk per bond, with no fixed term, repaid with 10% interest. That means that we paid out 1 billion isk for every 900 million isk bond we sold, and that we repaid the bonds "as able", not keeping to a particular schedule for repayment.

We found that alliance members were suprisingly willing to invest in alliance projects; every time we opened a new bond offering, the bond typically sold out within 24-48 hours of our making it available. We've sold a total of 123 bonds over the two years the alliance has been in existence, and the isk allowed us to build not only our first station in BYXF-Q back in the old Fountain days, but two alliance titans as well - much, much sooner than we would have been able to build them otherwise.

Keep Open Books

I can't emphasize this enough. Your membership needs to know they can trust you with their isk. I recommend using Google Docs to maintain spreadsheet showing the alliance's major income and expenses, as well as keeping a record of who has purchased bonds and whether they have been repaid. Share this spreadsheet with corp CEOs and directors people can easily get a sense for where the money is going and whether bonds are being repaid appropriately.

Repay Early, Repay Often

You'll reassure bondholders and alliance members alike by repaying bonds as often as you possibly can. This usually coincides with major bursts of alliance income, whether from moon minerals, alliance mining ops or taxes. By repaying one set of bonds you're reassuring the people further down the list that they'll get their money back.

Keep Your Promises - And Only Promise What You Can Deliver

It's important to set expectations clearly when you offer alliance bonds. In GENTS, we knew that we would be able to pay off our alliance bonds eventually but we couldn't promise an exact schedule. As a result we made sure everyone knew up-front that our bond offering had no set term, and to our delight people were willing to invest anyway. Likewise, it's critical that once you issue a bond offering, you repay it under the terms you set in a timely fashion. If you don't, you most likely won't be able to issue another one - and you may very well face popular unrest within your alliance.

Bonds Are Liberating

Overall, we found alliance bonds to be an excellent strategy for financing major projects in advance of our income despite being small and cash-poor. I hope that this strategy will be useful for other alliances in getting off the ground. The station and titans built through the bond program were major sources of pride for GENTS, and your own alliance will get a morale boost out of completing major projects through cooperation and trust repaid - a rare commodity in EVE.

Kesper
Kesper North is a humble line member in GoonSwarm Federation. His passions in EVE are nullsec politics and solo PVP. He gladly accepts donations of Orthruses. Twitter: @KesperNorth