Really great piece in NPR On Planet Money discussing the finances of Somali pirates. Turns out pirates need about $250k in seed money to get going - guns, boat, food.
Here's how the ransom payout works: About 20 percent goes to pay off officials who look the other way. About 50 percent is for expenses and payroll. The leader of an attack makes $10,000 to $20,000 (the average Somali family lives on $500 a year). The initial investor — who put in $250,000 of seed capital — gets 30 percent, sometimes up to $500,000.
In this economic climate, the investment looks like a pretty good finance opportunity. Pirate Ventures anyone?
Behind the business plans of pirates
NPR also did an interview with Dr. Peter Pham (who provided the insight on finances above) on the Profitability of Piracy
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