This start-up is making it a lot easier to own a Ferrari — or, at least, a part of one.
The collector car market has historically only been accessible to a wealthy few. Rally Rd. is aiming to democratize classic car collecting by turning premium vehicles — like a $165,000 vintage Ferrari Testarossa or a $425,000 Porsche Speedster — into stock.
"Each investment on Rally Rd. is essentially a mini public company," says Christopher Bruno, the start-up's co-founder and CEO. "Our investors are able to create a custom, diversified portfolio of equity interest in blue-chip collector cars, share by share."
After Rally Rd.'s team of experts identifies an investment opportunity, the company acquires the car and securitizes it, turning it into equity shares. Price per share is determined by the value of the car divided by 2,000. Investors are then able to purchase stock in the vehicle for as low as $50 a share. Rally Rd. does not charge any commissions or management fees, and the entire process is completed on a smartphone, through the company's mobile app.
The cars on Rally Rd. are always for sale. The start-up decides when to sell a car with the help of input from an expert advisory board, as well as investor sentiment, determined by data collected on the app. After a car is sold, the proceeds get paid to its shareholders. If investors want to exit before an asset is liquidated, they can trade their shares on a secondary market during monthly trading windows.