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SecretAgentMan by Richard Saunders – FAQ

1. Is the Chain of Support Rewards Program a Pyramid or Ponzi scheme?

No!

It’s actually just a very simple, legal and completely voluntary, “Referral Compensation – Rewards Program” available to any customer who wishes to sign up for it. Buying a book does not obligate participation and no investment or membership fee is required.

It’s not a Pyramid, or a Ponzi or even a Mutli-level marketing (MLM) thing. It’s completely legal. If you should decide to participate, all you do is recommend the book to someone – In a nutshell “That’s all there is to it”. If that person pre-orders (or donates) and successfully recommends the book to someone else and so on, you “might” end up winning a percentage of the author’s royalties.

If the book is good enough to attract fans, this will work. If the product is not worthy of recommending, then it won’t get recommended! The reading public is in complete control of the potential success of this effort. If it IS successful, then those customers and Fans of the book who generated the Most Viral Activity (within the scope of the rules and decided to participate in the Rewards Program) will win a percentage of the author’s profits.

Understandably, many people don’t know exactly what it is about Pyramid schemes and Ponzi scams that makes them illegal and “different” from other (legal) marketing plans that attempt to create buzz and “grow the customer base” by offering Rewards. Because of this confusion, some are naturally suspicious of ANY marketing plan that claims that money can be awarded simply by recommending a product to others and tracking how far the “word of mouth” campaign that you started goes. After reading the full explanation of the differences between what we are offering here and those other “questionable” practices; if you still have any questions or concerns, please email them to myklwalsh@anexpub.com.

You hear the words “Pyramid Scheme” and might assume that anything resembling that sort of “structure” with money being exchanged is a questionable venture. But the illegal parts of Pyramids and Ponzi’s actually have nothing to do with how the group is organized, set-up or grows. It has nothing to do with the “shape” of the model; be it a square, rectangle, triangle or pyramid. It’s ALL about the fraud, misrepresentations and where the money comes from that makes them illegal. There’s absolutely NONE of that associated with our Rewards Offer.

The Chain of Support Rewards Program is simply a “Referral Compensation” plan from our marketing department.  Every advertising and marketing plan has the ultimate goal of inducing a word of mouth chain reaction that results in more products being sold. So that’s all that’s going on here. There’s absolutely nothing unseemly or illegal about it.

Pyramids and Ponzi’s are about investments and returns on investments. Amway and other MLM (Multi-Level-Marketing Plans) are about setting up your own business as a subcontractor, buying products and building a complex legal pyramid structure as a distribution channel.  We ARE NOT asking or doing Any of that! It’s not even a close comparison.

The way that it’s designed; the “shape” of our model will look like a square or a rectangle, not a pyramid; but as you see now, the shape isn’t really the issue anyway.

The only thing our customers do here is buy books. Some may choose to donate to the crowd-funding campaign to help make it successful, but we aren't stressing that aspect, we're very happy to fully fund the campaign through book orders. If a customer likes the book and wants to recommend it to someone else, that’s a freely made choice. If they want to participate in the Rewards Program, there’s absolutely no cost to do so. No one can lose ANY money here! In Ponzi’s and Pryamids and even with legal MLM Pyramids; people CAN lose money! NOT HERE though!

We devised a way that compensates some of our customers and fans whose recommendation of the book ultimately results in more sales than the other customers who wanted to help increase sales by recommending the book. No one is asked to make an investment and no one is promised getting something back from an investment or donation. No one is asked to buy a ton of books and “distribute them to their organization” (like the MLM’s do).

Pyramids and Ponzi’s are based on false representations and in legal terms what is known as “fraud in the inducement”. They steal money from people at the bottom of the pyramid and pay off people at the top; falsely claiming that the so-called profits came from successful investments. They collapse because there are NO Real Profits or the profits generated are wholly insuffient to cover the promised returns on the investment.

The monetary prize awards here come from successful referrals and Real Profits from book sales. or in legal terms; "from the economic value created in the selling of goods or services".

If the book doesn’t sell, then no one wins. There are No False Promises here. No one is promising that the book will sell! The program by design, can’t and doesn’t “collapse”, it just ends on a specified date. (Either the date of publication or if the Inkshares campaign fails to be fully funded by February 26, 2015).


2. Does the Chain of Support Rewards Program violate Section III of the 2012 JOBS Act?

Once again the answer is NO!

Although the full set of rules for the JOBS Act still have not been finalized by the SEC, the provision that covers this Rewards Program prohibits a company from "soliciting x amount of dollars for x amount of equity" from "non-qualified investors".

But since everyone stands the same chance to "win" one of the five prizes of up to 5% of the author royalties (capped at $50K) regardless of whether you ordered a $5 eBook or donated $5,000 to the crowdfunding campaign, there is no quid pro quo and no direct relationship or ratio between the amount of funds contributed to the crowdfunding campaign and the percentage of royalties won. No one can "buy" an equity position; and the limited equity that will be awarded will be done so strictly on a merit basis.

The Rewards program also is not in violation of rules and laws covering "lotteries" because the Rewards offered are won as a result of a quantifiable accomplishment that requires work or skill to attain. Although it is a unique and possibly groundbreaking program, it is most similar to a sales commission paid to a non-employee or independent contractor for generating the largest number of successfully verified referrals, which in turn results in increased sales for the author's product. This "added value" is a key component which makes this Rewards Program above board and legal.

For more information see:

https://www.sec.gov/spotlight/jobs-act.shtml

http://www.forbes.com/sites/work-in-progress/2012/09/21/the-jobs-act-what-startups-and-small-businesses-need-to-know-infographic/


Hopefully that clears up any confusion on the subject. If not, please feel free to ask more questions.


3. I pre-ordered the book, but don't see my name on the "Chain of Support - Progress Updates" page.

You need to refer someone who also orders the book before you can get credit for starting a Chain.

Once Twenty Chains have been started, everyone else who ordered a book but haven't generated at least One Referral yet will be assigned a placement on an existing chain - with the shortest chains in place at that time getting the assignments.

4. I'm confused and get lost in the complexities of all of this.

This is admittedly a very complex project with lots of layers to it. Some people get it right away, others need to re-read the material a few times before clarity sets in. We'll keep reviewing the text based on the feedback we get from customers and continually try to improve the presentation. If you know an internet savvy 14 year old, ask them to explain it to you. (we're not kidding)

We've found that one group of readers that "gets it" right away are youngsters (and oldsters) who play video games. It seems that they are accustomed to dealing with "levels of complexities" - they compartmentalize and study each level separately and understand the relationships between the levels almost intuitively. Their experience with games and puzzles has given them the proper "framework" for digesting and comprehending the complex patterns and levels that a project such as this presents to them. So just ask the gamer in your life any questions that relate to the point where your confusion begins. And by all means, if you have any suggestions on how we can improve the presentation or clear up the language here, please write to us.

We’ll add more to this FAQ page if repeat questions come in and will answer individual questions via email.