When a yearling becomes a two-year-old on January 1st, it is eligible to race. Two-year-olds generally begin racing at four to five furlongs and are gradually extended to five-and-a-half, six, and seven furlongs, and longer. During the early two-year-old season, many young horses prove simply too small or fragile for early racing and are "turned out" for further development. Racing careers will not begin for many horses until they reach full development in their third or fourth year. One third of all foals never make it to the track for even one race. Over one half of those who do never win a single race.

During its career, a Thoroughbred may run in a variety of faces. A maiden race is one for horses who have never won any race. A claiming race is one in which any horse running may be purchased at the specific claiming price that posted as a condition of entry. In allowance races, the weight that each horse carries is set by the track's racing secretary, who makes specific allowances for horses with less impressive past performances, and saddles better horses with more weight. Allowance races are distinguished by entry conditions which restrict the race to horses which haven't won more than a certain number of other, lower level allowance races. Horses thus generally compete only against other horses who have won the same number of allowance races, advancing up the ladder as they win. The most important Thoroughbred races, stakes races, attract the best horses and the most public attention. Owners must pay a nomination fee or a series of nomination fess in advance, and an entry fee and starting fee at the time of entry (a few days before the race) and on race day. The stakes money raised by these fees is supplemented by 'added money' contributed to the purse by the track, and in some cases further supplemented by state breeders' association awards. There are also a number of combinations and variations on these race types.

In 2003, Thoroughbred racing in North America distributed $905 million in purses. This figure was largely provided by bettors, through a percentage of the betting handle. Also that year, the total handle in North America was $17.8 billion. While purses have more than doubled sine 1990, the number of races – 53,312 in 2003 – has declined about 13% in that time, improving the average purse per race and the average earnings per runner. This increase in averages has created one of the best environments for owning racehorses in decades. In addition, the market for Thoroughbred foals, and for yearlings at auction, has stabilized after the "bubble" of the late '80s. State breeding programs have expanded both the awards available to breeders and owners, and, therefore, the number of foals – particularly in states like New York which have an active and vigorous state-bred program. All of these trends mean growing supply of horses coupled with stable (as it were) demand and greater return on investment. This makes ownership, and in particular ownership of New York-breds, a much better proposition today than in the mid-80s, when a surplus of demand and races pushed down the averages in real dollars.

Racehorse ownership is still a tough game. Only a small percentage of runners every year cover their training costs for their owners. Training expenses, entry fees, farriers, insurance and transportation costs are substantial. Most owners get involved in racing for the love of racehorse ownership and the thrill of racing. Because of this, each partner agrees and acknowledges that the primary goal of the partnership is the pleasure and enjoyment of horse racing (the sport of kings!) and the ability to participate in the sport as the part owner of a Thoroughbred race horse. Each partner agrees that she or he becomes a partner in Karakorum partnerships solely for fraternal and entertainment purposes, and not with any expectation of any investment return upon the amounts contributed to the partnership.

The world of Thoroughbred racing – like many other industries – has its own unique language, practices and regulations. To help you make the most informed decisions about a horse racing partnership, we've taken the mystery out of the racetrack with brief overview of the sport.

When a yearling becomes a two-year-old on January 1st, it becomes eligible to race. Two-year-olds generally begin racing at four to five furlongs and are gradually extended to five-and-a-half, six, and seven furlongs, and longer.

During the early two-year-old season, many young Thoroughbreds prove too immature for early racing and are "turned out" for further development. And for many horses, their racing careers don't begin until they reach full development in their third or fourth year. In fact, one-third of all foals never make it to the track for even one race; over half of those who do make it to the track never win a single race.

A Thoroughbred may run in a variety of races during its career, including maiden races, claiming races, allowance races and stakes races.

A maiden race is one for horses that have never won any race. A claiming race is one in which each owner declares before the race at what price his horse will be offered for sale. There are two levels of maiden races: maiden special weights , for which each horse must carry the same assigned weight; and maiden claiming , for which each horse is offered for sale at a given price.

In allowance races, the weight that each horse carries is set by the track's racing secretary. The secretary makes specific allowances for horses with less impressive past performances, and saddles the better horses with more weight. Additionally, they restrict the race to Thoroughbred horses that haven't won more than a certain number of other, lower-level allowance races. Thoroughbred horses generally compete only against other horses who have won the same number of allowance races, advancing up the ladder as they win.

In Thoroughbred racing, stakes races are the most important ones because they attract the best horses – and the most public attention. Thoroughbred owners must pay nomination fees in advance, as well as entry and starting fees at the time of entry (a few days before the race) and on race day. The stakes money raised by these fees is supplemented by added money contributed to the purse by the track, and in some cases further supplemented by state breeders' association awards.