For the 26 investors in Gavin McClurg’s business, dividends include swimming alongside humpback whales in Polynesia, surfing 19-foot waves off the coast of Indonesia and paragliding in Palau. McClurg, 37, is the founder and chief executive of Offshore Odysseys, a five-year-long, around-the-world surfing, diving and photography expedition aboard a 57-foot, $1.2 million catamaran named Discovery.
This is no charter boat; it’s a floating time-share resort. Each share (plus variable expenses) entitles an owner to one annual 10- or 14-day cruise and a piece of the boat. This month’s destination: the Mergui Archipelago near Burma, a remote area for kiteboarding (that is, balancing on a fiberglass board and steering a kite that rips the rider across the water at 30mph). In addition to arranging the trips and navigating the boat, McClurg handles all repairs, catches lobster for dinner and, if necessary, wrangles with inhospitable local officials. The Discovery hosts up to six guests and runs trips 198 days a year; McClurg uses downtime for maintenance and sailing to the next spot.
It’s good work if you can get it–even better if you don’t have much startup capital. “I’m not good at raising money or selling anything,” says McClurg. “But people were falling over themselves. They thought: ‘I need to do this. My life’s going by.'”
McClurg grew up in Lake Tahoe, California, where his father developed real estate and his mom ran trips for corporations. He spent a year as a backup on the U.S. Ski Team before getting sidelined with a torn ligament in his left knee at 17. A few years later his father bought a 52-foot Ron Holland sailboat named Saoirse (Gaelic for “freedom”). On one of their first offshore voyages, from Vancouver to Santa Barbara, California, they met 75mph winds and capsized. “When we made land, I checked into a hotel for two days and slept,” says McClurg. “That’s when I fell in love with sailing.”
After graduating from the University of Colorado at Boulder, McClurg floated from job to job, including stints as a commercial salmon fisherman in Alaska, a wilderness firefighter in Oregon and an Outward Bound instructor in the Pacific Northwest. In 1999 McClurg bought his father’s boat for $250,000 (Dad loaned 80%) and left for the South Pacific two years later. He spent the next five running charters in spots like Polynesia, New Zealand and off the coast of Sumatra. When he’d get low on cash, he’d return to the U.S. to bartend and fight fires. Burned out and tired of being broke, McClurg sold the boat, paid off the loan and headed back to the States. “I knew I wanted to keep sailing, but I didn’t want to sell charters every week,” he says.
A larger, more seaworthy vessel would require serious cash. That’s where the time-share model comes in. There are 615 shares. Investors ponied up $20,000 or $30,000 per share, and five own more than one. Bruce Marks, a retired anesthesiologist from Perth, Australia, has eight, and Scott Wisenbaker, an ex-vice president at Goldman Sachs ( GS – news – people ), has six. Shareholders also pay an annual $4,100 or $5,730 per share to cover operating expenses, and another $45 per day for food and beverages. That adds up to about $250,000 in annual fees. Of that, $135,000 is split among McClurg, a chef and a first mate (who during year one was McClurg’s girlfriend, Jody MacDonald); $85,000 covers maintenance; and $12,000 goes toward insurance.
McClurg fills out the guest schedule according to each owner’s first, second and third travel-date preferences. If a cabin isn’t reserved, McClurg will sell it as a charter for $6,000 or $7,900 per trip. (He’s booked through the end of 2010.) McClurg pockets $59,000 in salary as Discovery’s captain; he and MacDonald–the company’s cocreator and creative director–together earn an additional $18,000 for administering the business. He hopes to sell the boat after 2011 for $750,000, which would make his 15% stake worth $112,500. He’ll get another $37,500, per the time-share contract, for completing the five-year expedition. With virtually no personal expenses, at the end of the voyage McClurg hopes to have netted roughly $500,000 after taxes. “We’re not tycoons, but it’s a nice lifestyle,” he says. “We’ve got only two years left, and I don’t want it to end.”
When he had sold just 30% of the total shares, McClurg struck an endorsement deal with Pure Action Sports Worldwide, maker of Best kiteboarding gear. Pure Action Chief Executive Ian Huschle agreed to provide kites, lines, harnesses, boards and a cash contribution in exchange for lead sponsorship of Discovery’s expedition, which McClurg named “Best Odyssey.” McClurg also agreed to give Huschle promotional footage from the trip. “If we were to collect that on an annual basis it would cost us far in excess of what it costs for the sponsorship,” says Huschle. McClurg later lined up 17 other sponsors, including gin paragliders, Aviso surfboards and Teva sandals. They are all paying in kind.
It wasn’t all smooth sailing. While McClurg and MacDonald trawled for investors, they rented a room in a friend’s house for $250 a month and shared a bicycle and borrowed cars to get around. McClurg couldn’t afford to pay a lawyer to draft contracts, so he tweaked a Learjet lease contract he had found on the Web. “I copied it and inserted ‘boat’ where it said ‘plane’ and sent it to [my lawyer], who reworked it,” he says. To discourage potential suits, McClurg incorporated in Nevis, a regulatory nest in the Caribbean: “If there’s a problem, the owner has to sue me through Offshore Odysseys in Nevis, where they would have to pay $25,000 [cash deposit] just to file it.”
By October 2006, nine months into their hunt, McClurg and MacDonald had raised $840,000 of the $1.2 million they needed for the boat–but their own stash had dwindled to $200. They e-mailed Bruce Marks, the Australian anesthesiologist, who agreed to shell out for two more shares. “I knew Gavin, and I wanted the trip to happen,” says Marks, 47. McClurg borrowed $50,000 from an uncle and the remaining $250,000 from Randy Campadore, a family friend and shareholder.
On the water there are plenty of unforeseen obstacles. In 2007, along a familiar stretch of the British Virgin Islands from Anguilla to Anegada, Discovery’s keel whacked a reef in the middle of the night. The boat started taking on water, forcing McClurg and his four guests to motor 11 miles to the nearest port. “I was worn out, and we were a little offtrack,” admits McClurg. “It was quite humbling.”
Ten days at sea requires good on-deck chemistry. Though he needed their money, McClurg made sure to vet all potential owners by having them fill out a 25-question survey about their sailing experience, temperament and tastes. Says McClurg: “I turned down maybe a half-dozen applicants, usually because I could tell our way of travel was a little too aggressive for their comfort level.”
Odyssey guests have swum across the equator (on the way to the Galápagos Islands), paraglided 2,500 feet above Tahiti and scaled palm trees in Haraiki, part of French Polynesia, to harvest fresh coconut for rum drinks. When night falls they dine on fresh seafood they have caught and play cards. The loser of one popular game has to do a “forfeit,” such as singing “Puff the Magic Dragon” at the top of the mast, drinking beer through a snorkel and even swimming in shark-infested water.
And when the voyage is complete? McClurg aims to expand his time-share model to a fleet of four boats serving specific regions, such as the Caribbean and the Mediterranean. Still, traces of the rudderless job-hopper remain. “We’re really not planners, and for Jody and me to plan something that was five years long was epic,” says McClurg. “I’m still pinching myself all the time.”
From Forbes – Helen Coster
More information about Offshore Odysseys visit their website offshoreodysseys.com