Mountain Sky Ranch Fractonal Alpaca Share Team (FAST) – PacaShare Program:
Questions and Answers
Q: Do you charge a management fee?
A: Yes. It will be explained in more detail in additional information you can request.
Q: How is Mountain Sky Ranch compensated?
A: Mountain Sky Ranch is compensated in several ways: a) it selectively marks up animals prior to the fractional sales; b) it receives 10 percent of profits upon conclusion of the specific PacaShare partnership; c) it receives the management fee described above; d) it may receive stud fees for breeding during the life of the partnership;and e) it gets a 5 percent sales commission when each alpaca in a partnership is sold. Profits are defined as the difference between all monies in vs. all monies out.
Q: Do Mountain Sky Ranch maintain an equity interests in any of the PacaShare partnerships?
A: Yes, every one of them. Some are minor, some are medium, some are significant.
Q: Have your partners made money with their PacaShare partnerships?
A: The PacaShare Program is new, so we do not yet have a financial track record for the program. As results are achieved we will openly share them with our partners and serious prospective partners.
Q: How are expenses for maintenance, showing,etc. handled?
A: The initial fractional share payment is intended to fund each individual partnership for two (2) years. If costs exceed what is anticipated, partners will be assessed costs proportional to their fractional share ownership. After 22 months of the ownership duration the ownership will be billed in advance for annual bills in advance for each succeeding year of the partnership.
Q: How are earnings distributed?
A: Animal sales proceeds are paid to fractional share owners within 7 days of receipt of funds from a a buyer.
Q: How often are individual PacaShare LLCs formed?
A: Mountain Sky Ranch will be offering new opportunities on a year round basis depending on the demand and status of animals available.
Q: How many PacaShare LLCs will Mountain Sky Ranch form in a year?
A: We anticipate forming 15-30 per year.
Q: What is the cost of a Typical PacaShare breeding female?
A: Between $5000 and $25,000.
Q: How many members are expected in each PacaShareLLC?
Q: What is the expected amount of the average share in a PacaShare partnership?
A: Between $3000 and $10,000. Minimum share purchases will be $1000.
Q: Is it wise to put a lump sum in one PacaShare partnership, or spread it around?
A: We always suggest diversification as a means of reducing risk. It is better to participate at a smaller level on three PacaShare partnerships than to take a larger part of one.
Q: Do you sell packages or groups of alpacas?
A: Yes, packages can contain more than one animal, but most are for individual animals.
Q: What types of alpacas are included in the PacaShare partnerships?
A: primarily, we are including high quality breeding females that will be “up-bred” to carefully selected herdsires to produce show quality offspring that can then increase the value of the partnership through each succeeding breeding. Some partnerships will also include excellent fiber quality males that will add value through their fleece production for the partnership.
Q: Do you buy alpacas to be included in the program at public auctions?
A: Yes. With the economy being weaker now than it has been, there are opportunities for exceptional purchase opportunities at Public auctions. We believe that we can take advantage of our exceptional knowledge base regarding phenotype, genotype and prepotency of certain animals to obtain exceptional bargains. We have already done that at two different auctions in 2010.
Q: will the partnerships have a preponderance of younger female animals?
A: Yes, we started buying more younger breeding females gradually so that now we are starting to rely on them more and more, as they provide the best value. We have enjoyed considerable success with our younger females and are proud of our record.
Q: When you offer a PacaShare partnership for sale, what time constraints are involved?
A: Once a breeding female passes our “due diligence” of scrutiny and is bought, we believe the partnership fractional shares will sell very quickly. Potential partners are always advised to be prepared to commit soon after a review of our package, documentation and views of the alpacas involved.
Q: How do potential partners find out what PacaShare partnerships are being offered?
A: Mountain Sky Ranch maintains a list of prospective partners, with notes on what type of alpacas they are interested in. We then describe each partnership possibility with
the acquisition on our website and we prepare promotional materials, which we send out to prospective partners.
Q: How many new partners generally participate in each PacaShare LLC?
A: as we stated earlier, this is a new program for us, but as we get partnerships established we anticipate only a few! because our existing partners will react quicker than the prospective clients, who as a rule are not in the habit of responding as quickly as is required.
Q: What kind of “perks” can I expect.
A: Free visits and unlimited hands on training at the ranch, first looks at new opportunities, ribbons and recognition from show success, free admission and seating with our team at shows, outstanding networking opportunities with leaders in the alpaca industry, and incredible new friendships and synergies among our entire partner group.
Q: What about tax reporting?
A: K-1 forms for reporting tax information are supplied prior to March 1 in each calendar year.
Q: Are the alpacas insured?
A: Yes. Mountain Sky Ranch routinely does insure our breeding alpacas for mortality protection.
Q: Why the Limited Liability Company format instead of a General or Limited Partnership?
A: An LLC limits the liability of the members in case of a lawsuit solely to the assets of the partnership, so that its members are not personally liable or at risk. Also, the LLC structure allows the flexibility we desire for offering excellent economics for our PacaShare partners.
Q: Where will the PacaShare Partnership animals be shown?
A: Mountain Sky Ranch will normally show our show team at 8-10 shows per year in the central, mountain and western United States. We will normally show at GWAS, the National Western Stock Show, MOPACA, TxOLAN, the Futurity, AOBA Nationals, Fall Fest, and a combination of three to four other shows.
Q: How are the partnerships concluded?
A: Each partnership is concluded when all of the animals that it owns are sold. Based on timing and the show records of the offspring of the foundation breeding female of each partnership we may sell quickly or somewhat more slowly. In most cases it is our goal to successfully conclude a partnership within five (5) years. Our goal is to achieve a complete return of partners initial costs within two to three years.
Q: Can an investor extricate himself/herself from a partnership before it is concluded?
A: Because Mountain Sky Ranch offers no secondary market, an LLC member interested in selling a partnership interest must find his or her own buyer. Existing partners in each PacaShare partnership have first right of refusal to purchase the partnership share being offered. Prospective participants should be prepared to be involved for the life of the partnership.
Q: Is it expected that PacaShare participants might go on to have independent success owning and showing their own animals?
A: Yes, that is one of the primary goals of this program. We believe that PacaShare Partners will eventually want to have their own animals, farms and responsibilities.
Q: How much does it cost to maintain and show an alpaca with Mountain Sky Ranch?
A: When all is said and done, it costs about $4000 annually to care for and show an alpaca annually through the PacaShare Program. This is considerably less than what the costs would be for a privately owned alpaca in a small farm situation. We have the ability to take advantage of economies of scale associated with our animal care and showing costs.
Q: Do partners have any input as to the management and showing of the PacaShare alpacas?
A: No. Those who participate in this breeding improvement venture do so because they are interested in benefiting from the expertise of Mountain Sky Ranch, not of the other members.
Q: Do partners have a say-so in determining anything?
A: Yes, partners vote on important issues regarding the expenditure of extraordinary sums of capital, as well as when a venture should be terminated.
Q: How do you keep partners informed?
A: Mountain Sky Ranch writes a regular blog on the ranch activities. We will also have a members only section of our website that gives extraordinary insight into the entire alpaca industry. Our ability to communicate with our partners is the envy of the industry.
Contact Us At:
Mountain Sky Ranch
PacaShare Fractional Alpaca Share Team (FAST)
225 SW 42nd St.,Suite C
Loveland, CO 80537