From: Gianni Serazzi To: "jeffrey E." <jeevacation@grnail.com> Subject: Options Date: Wed, 07 Mar 2018 17:17:01 +0000 Dear Jeffrey, here's a few bullet points on model investment optionality OPTION A: BUY LARGE NETWORK + Brand name recognition + Trophy company on day one + Top models on day one - Large investment on day one (20-60M for big names) - Difficult to finance with debt because they have very limited profitability - Low IRR, even with a great manager (not necessarily me but whoever you think will be at level) profitability will be 2-5% of the investment if they do a great job. Many of them have negative returns at present once you scratch the surface - High risk profile because you buy overpaid agents. When/if they leave the franchise loses value OPTION B: ORGANIC GROWTH, BUY A MEDIUM COMPANY AND INVEST IN GROWTH + Much lower starting investment (3-5M and I-2M investment for a few years that can in part be financed with profits after initial years) + Optionality, when IRR increases also investments can increase + Higher IRR + History tells us that who created companies and networks made money, not who bought the existing network + We have connections with mother agencies and agents since 20 years, know who to hire (not to buyout) or partner (minority stakes in mother agencies) +A disruptive business model similar to what I was doing with John Casablancas in Starsystem can change the rules of the game - Brand name needs to be created or grown to a strong global basis - Trophy company needs to be created, not present in day 1 Just a few thoughts, you have the luxury to have way more money than what you can spend in this life so for sure have a different point of view. Best EFTA00866569