I fixed some misunderstandable parts, I meant the $500k being the LW hosting + Software subscriptions and the Dedicated software + accounting stuff together. And I didn’t mean to imply that the labor cost of the 4 people is $500k, that was a separate term in the costs.
Ah yeah, I did misunderstand you there. Makes sense now.
Is Lighthaven still cheaper if we take into account the initial funding spent on it in 2022 and 2023?
It’s tricky because a lot of that is capital investment, and it’s extremely unclear what the resell price of Lighthaven would end up being if we ended up trying to sell, since we renovated it in a pretty unconventional way.
Total renovations cost around ~$7M-$8M. About $3.5M of that was funded as part of the mortgage from Jaan Tallinn, and another $1.2M of that was used to buy a property right next to Lighthaven which we are hoping to take out an additional mortgage on (see footnote #3), and which we currently own in full. The remaining ~$3M largely came from SFF and Open Phil funding. We also lost a total of around ~$1.5M in net operating costs so far. Since the property is super hard to value, let’s estimate the value of the property after our renovations at our current mortgage value ($20M).[1]
During the same time, the Lightcone Offices would have cost around $2M, so if you view the value we provided in the meantime as roughly equivalent, we are out around $2.5M, but also, property prices tend to increase over time at least some amount, so by default we’ve probably recouped some fraction of that in appreciated property values, and will continue to recoup more as we break even.
My honest guess is that Lighthaven would make sense even without FTX, from an ex-post perspective, but that if we hadn’t have had FTX there wouldn’t have been remotely enough risk appetite for it to get funded ex-ante. I think in many worlds Lighthaven turned out much worse than it did (and for example, renovation costs already ended up in the like 85th percentile of my estimates due to much more extensive water and mold damage than I was expecting in the mainline).
I think this is a potentially controversial choice, though I think it makes sense. I think most buyers would not be willing to pay remotely as much for the venue as that, since they would basically aim to return the property back to its standard hotel usage, and throw away most of our improvements, probably putting the property value at something like $15M. But I think our success of running the space as a conference venue suggests to me that someone else should also be able to tap into that, for e.g. weddings or corporate events, and I think that establishes the $20M as a more reasonable mean, but I think reasonable people could disagree with this.
Ah yeah, I did misunderstand you there. Makes sense now.
It’s tricky because a lot of that is capital investment, and it’s extremely unclear what the resell price of Lighthaven would end up being if we ended up trying to sell, since we renovated it in a pretty unconventional way.
Total renovations cost around ~$7M-$8M. About $3.5M of that was funded as part of the mortgage from Jaan Tallinn, and another $1.2M of that was used to buy a property right next to Lighthaven which we are hoping to take out an additional mortgage on (see footnote #3), and which we currently own in full. The remaining ~$3M largely came from SFF and Open Phil funding. We also lost a total of around ~$1.5M in net operating costs so far. Since the property is super hard to value, let’s estimate the value of the property after our renovations at our current mortgage value ($20M).[1]
During the same time, the Lightcone Offices would have cost around $2M, so if you view the value we provided in the meantime as roughly equivalent, we are out around $2.5M, but also, property prices tend to increase over time at least some amount, so by default we’ve probably recouped some fraction of that in appreciated property values, and will continue to recoup more as we break even.
My honest guess is that Lighthaven would make sense even without FTX, from an ex-post perspective, but that if we hadn’t have had FTX there wouldn’t have been remotely enough risk appetite for it to get funded ex-ante. I think in many worlds Lighthaven turned out much worse than it did (and for example, renovation costs already ended up in the like 85th percentile of my estimates due to much more extensive water and mold damage than I was expecting in the mainline).
I think this is a potentially controversial choice, though I think it makes sense. I think most buyers would not be willing to pay remotely as much for the venue as that, since they would basically aim to return the property back to its standard hotel usage, and throw away most of our improvements, probably putting the property value at something like $15M. But I think our success of running the space as a conference venue suggests to me that someone else should also be able to tap into that, for e.g. weddings or corporate events, and I think that establishes the $20M as a more reasonable mean, but I think reasonable people could disagree with this.