Bitcoin Forum

Why is it that Bitcoin companies take their seed, Series A/B, investment capital in USD? I hope we start seeing companies requiring bitcoins for raising capital.

can't put the cart before the horse.  I'm guessing it's just because Bitcoin isn't widely used yet.  VC world still runs mostly on dollars.  Just because they want to invest in a bitcoin company doesn't mean they have to do it in Bitcoins, and why would it matter anyway?

There's been a lot of that, usually people get scammed.

Because the investment capital goes to things that currently can't be bought with BitCoin.

I don't know, I think it would be badass for a company that has a good product, and a solid, credible team, i.e., not scammers, with fully registered companies and addresses, to say "If you want to invest, we only accept BTC. Use BitPay, or CoinBase, or Coinsetter, or whatever you need to acquire the BTC" We're trying to create a Bitcoin eco-system, and I think a big milestone will be reached when we start seeing legit companies raising capital in BTC. Anyways, if I ever get a chance to start a company, that's what I'll do  ;D I'd be a stubborn mofo.

The idea is that the companies will be able to hold large amounts of BTC, and as they need to buy/pay for stuff in USD, they can cash out incrementally. The benefit of this is this could indirectly boost the Bitcoin economy, where companies would prefer to find merchants who'd accept BTC, so not to cash out large amounts all the time. Also, new merchants could see an opportunity in this and would want to accept BTC, since the spendable BTC supply is increased.

And be charged a fee for converting back to USD? So they get hit twice, once going into BTC and once converting back out.

Ideally, the companies would convert at last resort to USD. They could pay salaries in BTC, and when needing to spend money, i.e., buying equipment or purchasing services, would seek out companies that would accept Bitcoins. Or look to convince others to accept BTC. Then this in turn could create a self-reinforcing spiral of BTC adoption. For example, a bunch of hosting providers now accept BTC. Dell accepts BTC for computer equipment.

If investors are worried about the price collapsing, or don't see a long-term future, then they don't believe in Bitcoin to begin with, so why are they investing in the first place?

If legit Bitcoin companies accepted BTC only when raising capital, this would be good for Bitcoin, and could spark more BTC adoption from its economic effects.

Not expecting anyone to do this anytime soon, but I think it's critical for long-term growth. I hope to see companies start moving toward this.

I suppose you could via crowdfunding :

http://www.bitcoinstarter.com .

Probably because the startups raising capital still have limited ways to spend the btc in day to day business. Hopefully that will change over time

Are you serious?  It's because USD can be issued by banks at zero cost.  Duh. 

The idea on investment is such that people can easily put their money in. They want to get as many investors as possible and mot many people are still into bitcoin, it's a fact whether you choose to accept it or not. And I see that becoming a reason why investment is still in dollars. If you accept only bitcoin and I have tons and tons of dollars to invest, do you really want to turn me away? that is a big question mark.

Personally, I hope to not ever be in a position where I desperately need someone's money when raising capital as that would put me in a bad negotiation position. Assuming I'm not in that position, I'd ask you to acquire BTC and would be prepared to lose you. I'd respectfully say,

"I'm running a Bitcoin company, and its existence depends on Bitcoin itself becoming more widely adopted, not just in the small realms, but in the big ones, too. If we can't get investors to invest in Bitcoin, then I worry for the future of Bitcoin. I don't want to perpetuate this cycle and want to set a precedent to only accept Bitcoin. And, I hope if I do this today, then others will follow in my footsteps. This will be good for Bitcoin, and this will be good for my company. I can refer you to various trusted parties where you can acquire Bitcoins and would be happy to accept your investment, kind sir. If not, thanks for your time" Well, I'm a stubborn mofo, I told you.

I guess I understand what the reasons are for not seeing capital raised in BTC in practice - volatility, potential laws for accredited investors, flexibility, etc - but the first legit company that requires BTC investment will garnish outmost respect not just from me but from the community as a whole. How do we get there? When will we get there? I think if Bitcoin is here for the long term, it's only a matter of time. The question who will be the first?

Also, a lot of people have mentioned that we need companies to pay their employees in BTC, and again we don't see much of this happening either. Again, where do most companies get their money to pay employees from? From investors. So, if they raised money originally in BTC, they'd be more inclined to pay employees in BTC.

Thanks for reminding me about this site. You find the darnedest useful stuff when you aren't really looking...Like a way to save money on spools if you have a 3D printer. But I digress. Before I go off the deep end, I might try using this to raise funds for my planned Bitcoin business.

Well technically speaking employees can't legally be paid purely in BTC, at least if they're hourly paid individuals. BTC is considered to be a commodity and as such wouldn't comply with the minimum wages laws should an hourly paid individual be paid entirely in BTC.

This is very good point.
Also, value of BTC is not stable yet, like other, ''hard'' currencies like USD or EURO. No one wants to receive significantly less pay because the value of the currency fell compared to last month

The problem here is still the volatility issue that causes price to fluctuate up and down. Also another problem is the acceptance rate. Like I said, how many stores, groceries that we go to daily to get our necessity items including foods and stuff, will accept btc.

I give you for example. If an employee receive wage amounting to 5 btc a month. That employee has to convert to fiat in order to buy most of the stuff. Employers will also have a problem to manage their fixed overhead cost involving employee wage and they can't set the price of product right when you have btc price going up and down like that. Back to the employee, if that person get paid 5 btc and if he/she can go to any convenience store to spend their btc for stuff all price-fixed in btc amount, then there won't be any problem after all. Earn in btc, spend in btc. Sadly that is not the case.