Broker-owned ticket exchange Ticket Evolution, seeking to solidify its financing through the fall and winter, this week moved up a shares offering to the ticket broker community from later this summer to the next two weeks.
Shares in the less-than-one-year-old company can be purchased by full-time brokers for $1.50 per share until June 1, with a minimum purchase of 5,000 shares ($7,500), according to Drew Gainor, Ticket Evolution’s chief technical officer. A total of 1 million shares will be available for purchase, and after meeting the minimum requirement brokers can buy as many shares as they want until the 1 million-share limit is reached.
The new offering comes on the heels of a recently closed one that was held for the company’s roughly 100 charter investors to allow them to buy additional shares. How much was raised during that offering was not disclosed, but last year, when the company began raising funds, it generated an estimated $1 million.
To remain a broker-owned exchange, Ticket Evolution is only soliciting funding from the ticket broker community, and only full-time brokers at that. The move keeps their membership pure, but it means the company has had to turn down funding from companies outside of the broker community, which could mean it would need to turn to brokers less.
Gainor said, however, that fundraising has not been a problem for the company, and it is on firm financial ground as it heads into the fall and winter when it expects to launch its point-of-sale software product and retail ticket exchange, Events365.com, and start charging fees. The funding will go toward operations and the further development of its products.
“Our goal now is to get as many brokers involved as possible,” Gainor told TicketNews, adding that investors in the current shares offering will receive certain enticements, such as reduced fees or free services for a year.
The company held its first board of directors meeting last week, during which the newly selected directors discussed the shares offering and other matters. Among the items discussed was a plan to sign partnership agreements with some unnamed, large web portals and e-commerce sites, which Gainor said will help drive future ticket exchange sales. The partnerships will be revenue-sharing in nature.
The board also began discussions on creating a broker ratings system, which was part of what led to the establishment of the company when founders Ram Silverman and Steve Parry of Texas-based Golden Tickets objected to the fees and rating system used by TicketNetwork. Gainor said Ticket Evolution’s ratings system has not yet been determined, but he said it will likely feature set ratings adjustment periods, such as on a quarterly basis.
Another issue discussed by the board was establishing a speculative ticket listing policy. The listing of spec tickets, where a broker sells a ticket before they have the ticket in hand, is a common practice among brokers, but has occasionally led to problems such as with the college football Bowl Championship Series national championship game earlier this year.
“Our tools will allow brokers to list speculative tickets on their own Web sites and on the exchange, but those tickets will be marked as speculative,” Gainor said, adding that when Events365.com launches, it will not allow spec selling of tickets to the Super Bowl, Masters golf tournament, college basketball Final Four or BCS national championship.
“We want to minimize the risk,” Gainor said. “We’re going to take the safe road for a while.”
The company has come a long way in less than a year, but challenges still remain.
“It’s very hard and costly to build POS software. We spend millions of dollars a year to maintain and upgrade our systems,” said Don Vaccaro, founder and CEO of TicketNetwork. “Competitors will have to, as well, because there is no easy, quick fix.”
TicketNetwork is the parent company of TicketNews.