I'll post the following which was posted by Freeper dakine back on Oct. 30, 2003 which was a reposting of an article by Jim Robinson founder of FreeRepublic.com. It is an excellent resource of how FR came to be.
Free Republic and Jim Robinson's Finances
Miscellaneous Free Republic Source: Free Republic Published: 07/15/99 Author: Jim Robinson Posted on 07/15/1999 01:02:53 PDT by Jim Robinson
Just trying to set the record straight.
Even though it's boring, I'll have to go back a few years to lay the groundwork for the story. Warning: it's boring so you might just want to skip this whole thing and go on to a real article... but for those of you who are spreading the gruesome rumors of Jim Robinson ripping off the FReepers, here's the real accounting of Free Republic.
During the 70's and 80's I worked as a programmer/analyst then division manager of a local computer service bureau. Over the years, I developed a series of accounting packages for agri-business companies. These packages were written for mini-computers using a fourth generation programming language that I developed myself. We had an installed base of a dozen or so farming companies and produce packers in California's San Joaquin Valley.
In 1988, the owner of the service bureau offered to allow me to purchase the software from the company on a percentage of gross revenues for one year basis and take over the existing client base. He also offered that I could take any of the programmers in my department who wanted to go with me. It had long been my desire to be in business for myself, so I jumped at the opportunity. Two programmers accepted my offer of equal partnership and ground floor opportunity and so we contributed $3,000 capital apiece, formed a corporation and into the computer business we plunged. In our first year, we grossed something in the neighborhood of a three hundred thousand and we were basically living hand to mouth, but we kept working at it. Within a few years and an awful lot of hard work, we were grossing a couple million per year and were earning a decent living.
In 1994 we decided that we wanted to expand the business so we did an initial public offering and raised some three million dollars on the NASDAQ. Our intent was to convert all of our software to shrink-wrap for Windows on the P/C and go nationwide. Well, we found that it was no easy task rewriting from the tested and true VAX VMS to the relatively untested and unstable P/C and we ended up paying several times the amount that we estimated for conversion and our roll out of the new software was delayed... first one year... then another. In the meantime, all of our clients and prospects were seeing our new prototypes and they wanted our new stuff. No one would buy our old software. Classic mistake. But long story short, we soon used up all of our new capital and the corporation was in big trouble.
To make matters worse, during the period of our IPO, my wife suffered a stroke which ended up leaving her entire left side paralyzed. And adding to that, my muscular dystrophy which had been progressing slowly for twenty years suddenly decides to accelerate. As I grew weaker, I could no longer travel by myself or even step up a curb to enter a client's building, much less climb stairs (many of our packing house customers had their offices upstairs over the plant). Plus, I had to spend ever increasing amounts of time at home helping my wife leaving less time for the office. So I began delegating more and more of my tasks to my fellow Officers and spending even less time at the company. It got so bad that eventually the board of directors invited me to step aside from my position as Chairman and CEO and turn the reins over to our President. I was given a one year consulting contract and a promise that I might be able to come back in as a Vice President after the company was re-organized. The company brought in some new capital through a private offering and the new stockholders brought in all new management. I was let go at the end of my contract.
In 1995 as we were desperately looking for a product to sell, we luckily acquired a new type of business... an internet service provider. This business was brand new, only 200 paying customers, and the founder had run out of cash so we picked it up and thought it would be a potential source of revenue. It was. It doubled or more in size every month. Eventually it saved our bacon because it was what attracted the private capital and then a later six million dollar offering (I was already gone by this time).
In the middle of 1996, I was forced into retirement. At the time, I only had about $40,000 value in my remaining stock (the company had lost about 95% of it's value), my wife was paralyzed, I was barely able get around, and we were lived in a big new house with an upside down mortgage (we had purchased the house before my wife's stroke and while I was still Chairman and CEO of a prosperous growing company which was about to go public and the future was all roses, uh huh).
So I continued on as a consultant for the company, but in October of 1996 my back got so bad that I could no longer stand or walk. I had surgery in December to repair a protruding disk and relieve the pain and numbness in my legs, but I was never able to walk again.
During most of the above time period (beginning sometime in '93 or '94) I had been following our new President's crimes and corruption spree by reading and posting to Prodigy's Whitewater bulletin board at night and on weekends. In September of 1996, I created the Free Republic website. Missy Kelly, who was a regular on Prodigy, sent me several articles and other info about the Riady's, the Lippo Group, the Rose Law Firm, and Clinton's crooked financing from the 80's through his election, and I also had info from Michael Rivero's Foster pages and I had some info on the phony drug war and our government's involvement with drug running through Arkansas, etc., and I set it all up on a series of web pages and just knew that if Clinton's corruption was exposed to the general public, no way would he be reelected. Hah!
After the corrupt sob was reelected, I became determined that I was gonna do all I could to see him impeached, so I wrote the forum software and launched the Free Republic forum in February 1997. I was the only poster for a few months, but I kept sending my URL to search engines and trolled the news groups by reposting articles from the forum and eventually I picked up a few readers... and eventually some of the readers got the courage to try posting.
The forum went well, and over the summer and through the fall of 1997 we continued to pickup more and more readers and we started accumulating a lot of hits. Sometime during that Fall, we had gained so many readers that our traffic began impacting my ISP (which was my old company which had been donating the resources for us). Our hits and our bandwidth usage was dragging down their system, so they eventually gave me an ultimatum to either pay them $700 per month or find another provider.
Well, I was near broke at the time, didn't have much income and this was just a hobby so I thought it was probably all over. Then one of our posters (The Duke) wrote me. He was using a network service for his company and he thought they could supply us with a dedicated server for as little as $300 per month. That was a reasonable rate, but I still couldn't afford it. The Duke suggested that we ask the readers if they wanted Free Republic enough to donate the money to pay the expenses and keep it running. So he ran a thread and sure enough, the readers said that it was important to keep Free Republic going and so they began sending in donations. I ordered the server and we were soon running. Thus the practice of reader funding of Free Republic was born. It wasn't that I was begging for money as some have alleged, it was because I did not have the resources to keep it going and yet the readers wanted it enough to pay our expenses.
The forum kept getting more and more popular, kept gaining more and more readers and kept requiring more and more time to support it. I was soon working on it full time and my HTML business (Electronic Orchard which I had formed to try to earn a living and stay afloat) began to suffer. I let the posters know, and they began sending more donations so that I could work full time on the forum and would have enough money to avoid personal bankruptcy. The forum was still just a hobby at this time. My income came from whatever HTML work I could find (not much), and from donors who sent me money as gifts and said to use it however I needed it, and from the remainder of my savings which I luckily had invested in Mindspring stock which was doing very well (Mindspring is an internet company and their stock did a ok).
Then sometime after we were on the new server (not sure about the timing here, may have been before) Matt Drudge discovered us and linked to our White Water topic. Now we start doubling every couple of months and soon our new server could not handle the load. The time delay became unbearable and the readers were becoming more and more frustrated and hostile. There was much public discussion about what to do to keep Free Republic alive and I did not have enough money left in my savings to buy a larger server and/or to commit to more bandwidth. Free Republic was just a hobby and had no revenue and no resources. How can I commit several thousand dollars per month for bandwidth when I'm already next to personal bankruptcy?
About this time, I was contacted by James Golden of TalkSpot who wanted to do an interview and ask a bunch of questions. I'm a quiet and shy kinda guy and hate interviews with the press so I turned him over to Connie Hair who had volunteered to handle these things for us. It turns out that he was interested in more than an interview. He wanted to find out whether we could work together. Seems he had a conservative talkshow and he was interested in expanding it and working with us. We let him know that we were in trouble and might not even be around much longer. Somehow over the next few weeks, Connie and Clarity had worked a deal with TalkSpot where they would provide the server capacity we needed and would supply me with a consulting contract so that I could earn a living while building Free Republic and Free Republic Radio on TalkSpot. Wow! What a miracle.
Connie had earlier asked me how much I would need to run Free Republic for a year, and I had estimated that with taxes and expenses I would probably need around hundred thousand or so. So that's what she asked for. And that's what they agreed to. They actually wanted to buy FR and hire me as an employee, but after having being in business for a decade, I was pretty set in my independent ways and would rather not have a boss. I said Free Republic was not for sale and so they agreed on the consulting contract.
Now we also had been contacted about this time by several media companies who questioned the fair use exemption to the copyright law and who were threatening to sue us for alleged copyright infringements. This prevented me from being able to convert my Free Republic hobby into a membership system which would have given us the funds to operate and me a salary so that I could survive while working full time on Free Republic. So, the TalkSpot deal was perfect for us.
And about this time, Lucianne Goldberg contacted us and we began negotiating a deal where we could market the Linda Tripp tapes on the internet. TalkSpot would've been the perfect vehicle for doing that. Lucianne was asking six million dollars for the marketing rights of the tapes. We didn't know what the market was, but we were willing to gamble that enough people would pay five dollars per tape to listen to Monica as she literally torpedoes a sitting President, and that we could collect enough money to pay the six million and then share in any profits over that amount. Well, as it turns out, the OIC turned the tapes over to the Congress who released them to the public so that deal fell through. Too bad. Free Republic would've made history and would have been funded for life (nothing sinister in this negotiation as some have alleged).
Also about this time, a man named Don Adams (not yet a FReeper) was viciously attacked by paid union thugs at an anti-Clinton protest in Philadelphia. We had been planning a protest in Philadelphia for several days prior and I figured that the Clintonites had gotten wind of that (they lurk on FR daily) and had arranged for the union goons to break up our protest. When I realized that this is what had happened, I got pissed and decided it was time to pay a personal visit to Mr. Clinton and tell him that we're fed-up and we're not gonna take this crap anymore and we're gonna see him impeached!
I announced on the forum that I was gonna go to the Whitehouse and protest the President's beating of Don Adams and so the March for Justice was born. It was originally just gonna be protest outside the Whitehouse but more and more people and groups got involved and so it had to be moved to Lafayette Park where there is more room available, and then eventually to the Washington Monument. Then the expenses began racking up. A stage, a sound system, security, porta-potties, insurance, etc. (the insurance bill alone was over $15,000). But the FReepers were willing and happy to send the money to pay for all this (actually we did not receive enough to pay all and we had a debt for several months after the event. The debt was funded by Bob Johnson and eventually all was paid back through sales of FReeper Stuff). Thus was born the idea of raising funds on Free Republic for projects... again at the request of the FReepers and not me begging for money as some have alleged.
Then the Washington Post and the LA Times file suit. Clarity volunteers to defend Free Republic. The FReepers decide to send donations to cover out of pocket expenses for the case (we've only received about six thousand, so far, but have racked up bills of several times that amount. We will be needing lots more). I had a choice of fighting or folding. The FReepers volunteered to send money so we could fight so fight we will. Again, I'm not begging. If the FReepers would rather not spend their money on this, we'll fold and settle.
Bob Barr calls. Duty calls and the FReepers go to Washington again. Boston conceives the idea of an ad in the Washington Times to urge the House to move on the impeachment. The FReepers raise something like $15,000 to pay for the ad and some additional artwork. We also raise some money to pay for the rally. Somewhere in here, we raise money to pay for the publishing of Alamo-Girl's Clinton Downside Legacy and to deliver a copy to each Senator. Gonzo contributes $6,000 dollars to the fund, which he had loaned to us previously to cover some of expenses of the MFJ and now says we should keep as a donation rather than pay back. Again, I'm not begging for anything... Boston and his group wanted the ad and wanted us to raise money on FR to cover it. Nothing sinister here. I'm still a hobby not a business. And not begging for money as some allege.
The House Impeaches, the Senate fails the people, abrogates their duty, Clinton walks. Then he threatens to take revenge on our brave Managers. The FReepers go to Washington again. And again Boston raises money for another Washington Times ad. Again, the FReepers wanted it. I did not beg.
Free Republic is still a non-profit hobby, but because of the lawsuit we are forced to file as a limited liability company so that we can continue to operate and not risk further personal lawsuits. We incur more legal and organizing expenses. I'm already being sued as Free Republic, Electronic Orchard and Jim Robinson personal. If I lose the lawsuit, the Washington Post et al, own me lock stock and barrel. My total life and everything I own is at risk here, but I'm not begging. If you guys would rather I fold Free Republic and settle this lawsuit, then I'm outta here. Nothing sinister.
During all of this time, there were many, many discussions both on line and off about how to keep Free Republic afloat. Many proposals were made and considered. Some were in favor of charging either a fifty dollar per year membership fee or perhaps a ten dollar per month posting fee. Proposals were made to incorporate, to sell stock, or to file for non-profit status and look for large donors. All kinds of things were proposed, discussed, talked over and most were finally rejected. There was nothing sinister about any of these proposals. We were simply trying to find a way to keep Free Republic going, get it on some sort of predictable and solid financial footing and to have a reliable way to pay operating expenses and salaries for a few people to work full time on the project. We've settled on forming a non-profit and looking for donors as well as possibly selling memberships in an association. The Free Republic forum, however, will remain free and open.
Throughout all this I'm estimating that we have received something over $100,000 dollars which was used as follows:
These are estimates (in round numbers) from memory. I did not necessarily account by project. Most of this was done as a hobby, but some as a not-for-profit company. I have not done a final accounting yet, and the company has not yet filed a tax return other than the required annual minimum tax. The first tax return will not be due until next April.
The March for Justice........... $30,000 The Judgment Day Rally..... $8,000 The Washington Ad, etc........ $10,000 The Treason Ad, etc............. $10,000 Legal Fees and filing fees....... $6,000 The House Managers............ $5,000 Travel and Lodging............... $8,000 Operating Expenses............... $15,000 Misc Expenses...................... $3,000 Corp Taxes........................... $1,000
Ending cash balance.............. $8,000 ($6,000 earmarked for legal defense)
Personally, I had a savings account (in stock) worth about $39,000 when I started all this. I had a house and two trucks and a house full of beat up furniture. I had debts including a 100% mortgage and other personal debts totaling approximately $220,000.
Today, I still have the same house and mortgage (which has decreased by barely a dent), the same beat up furniture, but only one of the trucks (an 89 GMC utility vehicle). I still have debts of approx. $220,000 and I still have some stock in my savings account. It has approx. doubled in value through price appreciation even though I have sold approx. seventy percent of my shares over the last three years (latched onto a great internet stock, MSPG!). That and the after tax proceeds from my consulting contract (I did use a portion of it to purchase new computers and other equipment for me and John), plus any gifts I received from donors is what we've been living on. Other than the equipment listed above, I have not purchased anything other than normal clothing, repairs and groceries and normal living expenses since 1995. We have not traveled or taken any vacations or even weekends off (other than my three trips to Washington with Free Republic). We do not eat out. A special night out for us is Chris runs out and brings back a pizza or some Chinese and rents us a movie. Chris lives at home and cares for us and he goes to college. My sister-in-law comes over every weekday to help Sheila bathe and dress and help with the housework. I'm not pleading poverty, but I ain't rich either and I'm only a heartbeat away from bankruptcy. Oh, yeah. I also do not have any health insurance and my medical bills are growing. Hillary where are you? (LOL)
Please understand that we're happy as clowns and I'm not complaining. We thank the Lord daily for all our blessings. The only reason I'm writing this is because I've been accused by several on this forum and last night in print on Salon, that I'm ripping off the donors.
Well, I'm working double shifts seven days a week for Free Republic and I'm not getting paid a whit. And I sure as hell am not ripping off anyone. If any of you want to donate to keep Free Republic on the air, I'll thank you for that and we will appreciate it very much, but I'm not gonna beg anyone for it. If we can not fund Free Republic, she goes under and that's that. Now if anyone else ever accuses me again of being a crook, just beware. I'm gonna hunt you down and beat you senseless with my cane.
Anyone still here remember "Missy Kelly"?
There was a post on the Prodigy Whitewater Bulletin Board entitled "Bash $lick Here" that went on for years.
That BB was mentioned in the WSJ op-ed page, top of the fold, left column more than once.
I'd love to speak with some of those old time members. I saved much of those posts in text format..I'll have to look for them. At that time I used a 386/dx with 2 mb of RAM that cost me about 4k.
Reminds me why I always think of Jim Rob and the other folks who make up FR being less like political operatives and more like WARRIOR MONKS ~ having taken a vow of poverty as they lifted their weapons and launched into the total culture war.
I really enjoyed this post. There are all kinds of American Heroes...Jim Robinson is one.