We made some big improvements to the website: http://ignitefinancing.com/
* We're still making some minor improvements and adding content, but wanted to get it pushed out as soon as possible.

BTM Fund specific page at: http://ignitefinancing.com/investors/

Ignite Financing has translated the prospectus into Chinese.

Ignite Financing招股说明书翻译转换成中文版.  你可以在这里找到:
https://www.havelockinvestments.com/reports.php

We have been having a great time talking and meeting with current and potential investors, so we are doing additional Open Office Hours:

- Fri, Aug 15, from 12:00-14:00 CDT
- Sat Aug 16, from 15:00-17:00 CDT

Individual time blocks are 15 minutes. Schedule your time to talk to us via Skype at:
http://ohours.org/IgniteFin

Schedule a time and we can talk about the BTM Fund and BitcoinATM leasing, or commiserate with us about the recent price drop.

The Fund is now live:
https://www.havelockinvestments.com/fund.php?symbol=BTM


A follow-up on some questions and comments:

The 20BTC difference between raised funds and utilized funds (270-250) mostly go to cover expenses already incurred on behalf of the Fund, and exchange filling & listing fees. There is no windfall profit here for Ignite Financing. A break down of usage funds will be included in the Fund's first report, expected to be delivered 30 days after of the close of the listing.

From the updated prospectus available at Havelockinvestments.com:

"But, this really expensive!"

Yes and no. These amounts are not grossly out of line with other financing and leasing options for similar equipment. The leases do run a little higher at this time due to various reasons (new industry, lack of traditional financing options, etc).

As discussed previously, there are various reasons why an operator chooses to lease (payments via cash-flow, tax benefits (OPEX vs. CAPEX), alternative usage of capitalization, upgrade options, and so on). The operator determines the best usage of their capitalization, and leasing is a viable and competitive method. The lease is, maybe surprisingly, one of the less expensive line items of an operator's on-going budget, especially when you are operating multiple machines across a larger geographical region (such as 5 BitcoinATMs, one in each of the top 5 population centers of, say, Germany, and especially for multi-national operators).

In talking to operators, what draws them to this method is the ability to deploy 3-4x times as many BitcoinATMs as they would have if they opted to purchase. This allows them to access economies of scale when running their business, such as negotiating contracts with cash handling services, marketing, licensing, liquidity/exchange platforms, location rent, and more.

I can't explain how excited Mike and I are to be working to maximize the Fund's profit, and in the process increase the number of physical access points to Bitcoin globally. We truly believe BitcoinATMs are the fastest and easiest way to access Bitcoin (no waiting for bank transfers to clear), enabling more people to enter into the Bitcoin ecosystem, increasing the overall value of the network for all of us.

Any more questions or comments, please, post them and we will continue to answer as best we can.

We've posted an updated prospectus to Havelockinvestments.com that adds information about leases and lease revenue per BitcoinATM.

BTC would fit in very nicely in OpenSim and the various other virtual reality spaces. Too bad I haven't been involved in that for several years. There are several companies working with BTC for in-game / virtual reality currency (OpenSim had no native in-game currency). There could be interesting usage cases for OneName and BitMessage as well. OpenSim was exciting to me due to its decentralized p2p nature (anyone could/can run a server and connect to the network) vs. the centralized control SecondLife had on their platform, and their constant meddling with their in-game currency (sound familiar?). If only Bitcoin had been developed then... I'm pretty sure the server I used for the OpenSim rented spaces is the one we now use for our full Bitcoin node and Tor exit node.

These walks down memory lane are fun, and I have been involved with many diverse activities, hobbies, and technologies over the years, and will likely be involved in more in the future, but, this is quite off topic. Please keep posts relevant to the current offering on Havelock.

On topic, we are working on a lease revenue example to report here and update in the prospectus. I expect we'll post the updates sometime this evening.

I would refer you to Havelockinvestments.com for specific documentation on how they manage funds for companies that raise on their platform.

Havelock is not the "custodian of the shares".

Any problem you have with any other Havelock fund, take it to the relevant thread, or talk directly with Havelock.

Some clarification on how Ignite Financing procures operators for a lease (leads, pre-sales).

We use several sales channels, such as outbound B2B sales, actively reaching out to current and announced operators (we have a pretty extensive CRM already), inbound inquiries from new and existing operators via e-mail, linkedin, twitter and other avenues, but the method we are most proud of is direct manufacturer referrals. Ignite Financing partners directly with manufacturers to utilize us as a channel to close more sales and deploy more machines. Several of our current open orders are direct referrals from BitcoinATM manufacturers.

We are investigating future avenues as well, such as: referral programs and regional channel partnerships. If you would like to be notified if and when we launch sales initiatives such as these, please reach out to Mike at: mike@ignitefinancing.com

1.  You are asking for money to buy a bunch of ATMs (ATM Inventory, "The Fund"), which, upon being purchased, will belong to you, (Bitcoin ATM Inventory Fund, managed by IgniteFinancing, a BVI registered company).

IF: Ownership of the equipment is held on behalf of the unit holders, as per the prospectus. This allows the management company to act on behalf the Fund's equipment. For example, allowing us to enter into a lease contract directly with a leasee for Fund backed assets.

Just a few examples of this method in action:
- BTCJam holds the note on behalf of the funders/backers of any loan funded on the platform.
- Apple holds all it's assets, business process, and so forth on behalf of the APPL share holders.
- The Panama Fund holds shares on Havelockinvestments.com on investor's behalf.


2.  You promise to attempt leasing out these ATMs to others (Operators).

IF: The prospectus directs the usage of the funds raised on Havelockinvestments.com. Summarized: Funds are to be used for the purchase of inventory that will be leased to operators globally. In the highly unlikely event that we are not able to do procure leasees, the funds would be returned to the unit holders since they would not be able to be used for other activities.

Havelockinvestments.com requires proof of usage from the management company for any withdrawal of funds from the Fund. We will provide Havelockinvestments.com with the contract, pre-payment fees invoice & proof of pre-payment payment from the leasee (trackable by them on the blockchain and verified against the contract and invoice provided by Ignite Financing), as well as the invoice from the manufacturer. Havelockinvestments.com can release the funds directly to the manufacturer invoice BTC address from the Fund (all BitcoinATM manufacturers invoice directly in BTC). There is no reason for these funds to ever touch the management company's Bitcoin wallet.


3.  From resultant lease payments, you (Terry Woltman, CEO; Mike Snyder, COO; Eddy Travia, advisor) will draw a salary for yourselves (Fund Management), totaling 25% of gross revenue.

IF: The management fee on this Fund is not enough to cover the expenses directly involved in managing the fund, hence we raised a small private equity round to cover our internal business expenses (salaries, rent, back-office systems, travel, support, contract management, etc) while we grow Ignite Financing and our Fund -> Lease model, as well as additional internal initiatives, such as smart contracts (leases directly on the blockchain) and other interesting applications of the Bitcoin technology within the business.

Ignite Financing is subsidizing the Fund's management and administration expenses since the method is new to the space, and we have to prove this method to investors through good returns in order to raise additional funds to back ever more machines (this raise purchases around 12 machines against our current outstanding orders of over 80).


4.  The Fund reserves the right to "release further BTM units, or [and] raise additional funds on   
Havelockinvestments.com or [and] other methods at   it’s [sic] discretion" (dilute shares).*

IF: You are equating the unit holders of the inventory to shareholders in a company, which is an inaccurate classification of the nature of the units being offered. In the case of investment into shares a company, you are correct that such an action would dilute existing shares for the additional investment in the hopes that the funds raised would be put into further development to grow the business eventually, however this is not the model that the Fund is being raised as.

The units in this Fund are fractional ownership of inventory for immediate leasing to operators, which ties the units directly to their revenue center. For example, any additional raise of this Fund has a direct relationship to a matching increase in revenue, therefore there is no dilution taken by existing unit holders. In actuality, for any additional raise, we realize greater revenue per unit based on increased volume discounting as we become a larger and larger customer of each manufacturer, reducing the cost of each purchase and increasing returns. The Fund realizes additional revenue and security through further economies of scale and risk mitigation from a larger lease base.

Before any additional raise, we will weigh benefit/cost to unit holders to determine if it is better to raise internal to the existing Fund, or launch a new Fund (say, BTM2). There is no benefit to the management company via either method, so we will obviously act to maximize the return on investment for current unit holders as it is in the best interest of all involved.

This wording also allows us to raise future funds directly on the blockchain for leases when smart contracts and property are at a point to power a more direct investment model in leased BitcoinATMs. We imagine a point where we can post the lease, have it backed by funders, paid by leasee, BitcoinATM registers the payment for another month's service, and distribute returns to backers, all on the blockchain and without much interaction. Lease payments could even be automated on the BitcoinATM through smart property, without the need of the operator to even initiate the payment transaction themselves. I can go further into what we envision for smart property and contracts i the future.


5.  The remaining 75%, less undisclosed Fund expenses, shall be distributed through quarterly dividend payments to the "unitholders."

IF: This is correct. This includes capital repayment and dividends on profit.


*See Special NOTE regarding reinvestment, http://ignitefinancing.com/BTM_prospectus.pdf  Since no reinvestment is planned, the issuance of further "units" is simple share dilution.

IF: Since there are no re-investment provisions in the Fund, people are free to re-invest in additional Ignite Financing sponsored Funds in the future for their own re-investment if they so wish. Therefore, the Fund functions more like a loan with a variable return rate, backed by the BitcoinATMs, rather than a standard equity style of security. This allows investors to manage their own investment/re-investment based on the Fund's ability to meet it's objectives.

The units are fractional ownership of the Bitcoin ATM Inventory (the Fund). The units holders are compensated via the lease payments from the leasees. Ignite Financing manages the inventory (ensuring it is out working) and the leases (ensuring that payments are being received), and distributing the capital returns and the gain to the unit holders proportionally to their investment.

Ok, so you buy the ATM with investor's capital.  The investor however doesn't own the machine.  Instead, you give them a portion of the lease.  The lease runs for X months (10?) and then it expires.  The investor's investment is now 0.  It is worthless.

IF: Leases can run for 18 months or more. Most common is 36 months, with some operators requesting leases of up to 5 years. The Fund is for fractional ownership of a pool of BitcoinATMs that will be leased to qualifying operators.

So, during those 10 months, you have to effectively pay back the entire amount that I would have invested, plus profit.  You say that can go to about 25% of the initial investment.  Though I've seen no numbers that explain how that is supposed to work.  What do you charge for a lease?  What percentage of that then goes to the investor?  Over a 10 month period, how much is the investor looking to actually get back if the machine is leased for that 10 month period?  I don't think the numbers work.

IF: 25% per annum above and beyond the capital repayment and Fund fees. Over the course of the lease, the machine is paid back via the lease payments from the operators (which is capital repayment plus mark-up). Leasing is not made to operators at cost. Leasing is a mature business model used by HP, Xerox, General Motors, Dell, and many, many more to great success.

Where as, you get to renew the lease and keep the rest of the lease profits for yourselves.  It's not like the machine will just explode.  You're saying we can reinvest in a new lease, now that our first investment is worthless, we can buy in at full price to purchase another lease.  But nobody is really going to do this unless you can prove it's profitable to do so.  I think a lot of people will be pissed that their investment is suddenly worth nothing because the lease expired.

IF: The revenue from the machines owned on behalf of the Fund unit holders go towards dividend/capital payments to the Fund unit holders per the disbursement policy in the prospectus. If the lease is renewed, it doesn't change the Fund's ownership of the machine, and the Fund unit holders will continue to realize revenue. Same with an end of lease sale, or a break of the lease fee, or a mid-lease sale of a unit. Any revenue tied directly to the machine is classified as Fund revenue.
If you have not done so, I would recommend reading over the prospectus (http://ignitefinancing.com/BTM_prospectus.pdf) which explains Fund revenue.

If the person you vet decides to break out of the lease, or steals the hardware, you say there is a fine.  But what recourse is there for investors here?  They eat the cost of the machine and only receive a fraction of the initial lease.  I imagine you are going to insure these machines when you install them.  Do investors get the insurance money back if the device is stolen or struck by lightning?

IF: In certain cases we will require collateral, a co-signer, or other guarantee of the lease payments, such as a bond. Specific scenarios will call for different insurances depending on the qualification of the operator. In the event a leasee fails to meet a payment, we are the titled owner of the machine and can remotely disable it, as well as lock the leasee out of any cash and/or Bitcoin on the machine (depending on the mfg). If required, we will procure a court order and repossess the machine, as well as work with collections agencies when required. When the Fund backed machines are not making money, we aren't making money either.

Thank you for the comments and private messages here, e-mails, and those that joined us during our Open Office Hours. Wanted to add in some further Q&A based on questions we've received:

Q: Why don't you raise money from angels, venture capital, or traditional lending?
A: We have raised Angel funds from private investors for Ignite Financing direct business operations and expenses. Our BTM Fund model allows Havelockinvestment.com qualified investors to participate in “fractional ownership” of many BitcoinATMs, increasing returns and reducing individual risk. This model is similar to purchasing Hash Shares from an organization like PetaMine (PETA), where you own a percentage of their hash capability, rather than buying an ASIC miner individually.

Q: Can you give more specifics on how the Fund works?
A: Basically, it is "fractional ownership" of the pool of equipment lease inventory, meaning that the Fund is backed by the actual equipment that is purchased and leased to our qualifying operators globally.
Since there are no re-investment provisions in the Fund, people are free to re-invest in additional Ignite Financing sponsored Funds in the future for their own re-investment if they so wish. Therefore, the Fund functions more like a loan with a variable return rate, backed by the BitcoinATMs, rather than a standard equity style of security. This allows investors to manage their own investment/re-investment based on the Fund's ability to meet it's objectives.

Q: What is Seedcoin's involvement now?
A: Ignite Financing is part of the Seedcoin Incubator program, along with a lot of other great companies. Seedcoin made a decision to restructure SF2, but we wanted to start fulfilling orders as soon as possible due to our current orders and further interest from additional operators. After discussing with Seedcoin, Havelockinvestments, and our advisors and Investors, we made the decision to raise independently, and specifically, for the Inventory of equipment.
For specifics on Seedcoin Fund 2 (SF2), please contact Seedcoin.

Q: How do the leases work?
A: Leasee Operators are required to pass pre-qualification and a credit check, as the the lease will be a debt to the operator. Once an operator is approved for the lease, Ignite Financing will collect a pre-payment charge and will order the machine from the manufacturer if we don't have one in stock. When the machines is delivered, the lease payments will start (everything is invoiced in BTC). The lease terms are very similar to other high value equipment leases.
During the lease, operators can choose to: upgrade to newer equipment, break the lease (there is a fee for this), or purchase the equipment.
At the end of the lease, operators can choose to: renew the lease, upgrade to a newer BitcoinATM purchase the machine, or return the equipment.

Q: Saw your Tweet regarding the "Safe Harbor" program, can you explain?
A: Basic information is here: http://ignitefinancing.com/2014/08/safe-harbor-program/
This is a new program for operators that have purchased a BitcoinATM, but for various reasons are no longer able to operate it. Ignite Financing can lease the machine to another operator (same qualification required as any of our other leases) and the owner can continue to receive a return for a machine that they would otherwise have to sell.

Q: How quickly will the investment be deployed to leasees?
A: We have open orders for over 80 BitcoinATMs. We believe we can deploy the entire inventory within 2-3 months and be generating revenue returns based on manufacturer lead times.

We still have open office hour blocks available to meet the Ignite Financing Founders: http://ohours.org/officehours/112053

Happy to discuss the BTM Fund on Havelockinvestments.com, or BTM leasing and services.

Meet the Ignite Financing team!

In order to connect with any potential unit purchasers and answer any questions, we have set aside 3 hours (11am-2pm central) tomorrow in 15 minute blocks for anyone that would like to talk to us directly.

If you have questions about the BTM Fund on Havelockinvestments.com or would like to talk to us about our Bitcoin ATM leasing and services, please feel free to schedule a block, and we can chat via Skype.

To schedule a block, please see: http://ohours.org/officehours/112053

This is an excellent option offered by BitLendingClub and BTCPoint for an operator to get a BTM, though this is only offered for BTCPoint machines at this point. I do hope they add many more manufacturers if this model is successful for them. More options for the greater proliferation of BTMs globally are good for the entire ecosystem.

There are many reasons a business may choose to lease rather than finance their purchase. See our previous post above for a sample of these reasons: https://bitcointalk.org/index.php?topic=725585.msg8198667#msg8198667.

There are pros and cons to each method, and which method is best depends highly on the operator's individual needs, much as some businesses decide to purchase or finance their work vehicles, and some prefer to lease them.

Regarding returns: As part Havelockinvestments.com due diligence, we provided guidance on unit holder returns. Per the current model, and given the current market information, we are expecting to pay dividends of greater than 25% per annum (after fund expenses and management fees) to unit holders above and beyond the capital repayment.

The Fund begins collecting revenue before the first leased machine is even sent (through prepayment of a portion of the lease up-front), meaning we will be able to move to dividend/capital disbursements very quickly.

We have a direct lease to revenue model that has been historically proven extremely successful (HP/Xerox Printer leasing, GM Financial leasing of vehicles, Dell/HP Server leasing, and so on).

The BTM fund is separate from the management company. We raised a very small amount for the management company, therefore 100% of the lease inventory is being made available to the investors on Havelockinvestments.com (there is no pre-dilution of the BTM Fund).

My co-founder and I are US Citizens, though we both live internationally.

Q: Why lease a Bitcoin ATM and not buy?
A: There are many reasons a business may choose to lease rather than purchase. Here are just a few:
1) Operational Expense vs. Capital Expense: By leasing equipment a company can take advantage of the payments of a lease as a business expense for taxation purposes, rather than as a capital purchase.
2) Risk Management: In recent news we have seen increased regulation (NYC Bit License), bans (Ecuador), and the inability to secure bank accounts (New Zealand). In the event a BTM Operator is no longer able to operate their BTM, they can break the lease for small fee and Ignite Financing will find a new home for the machine, rather than the Operator needing to sell a used unit on the international market.
3) Upgraded Equipment: Leases afford Operators an easy upgrade path, allowing Operators access to the latest and greatest equipment on the market. We are easily able to relocated used machines to other areas, allowing further BTM proliferation.
4) Lower cost of entry: An Operator can expend far less capital to start or expand their existing business. This lower cost of entry allows the Operator to deploy more locations, better capitalize their operations, better liquidity, larger marketing budgets, and more.
*Other benefits can be: testing business models, cash flow optimization (directly matching expenses to revenue), preservation of credit lines, expense consolidation, and access to Ignite Financing’s further product and service lines.

Q: I am interested in leasing a Bitcoin ATM, what should I do?
A: Please e-mail terry@ignitefinancing.com and we can discuss your needs and see if leasing is the best option for your specific goals, and how Ignite Financing can empower your business. We have flexible lease terms on par with other technology related business leases, and a full suite of services to help you operate and grow your business successfully. Even if you already have Bitcoin ATMs deployed, we are currently investigating methods of moving existing machines onto leases through a cash buy-out and lease-back program. We would love to hear from you.

Q: How does Ignite Financing use Bitcoin?
A: We raise funds in Bitcoin, the vast majority of our supply chain uses Bitcoin, we invoice in Bitcoin, we pay dividends in Bitcoin, and we hold our profit in Bitcoin. We only convert Bitcoin to Fiat when absolutely necessary.

Ignite Financing (ignitefinancing.com) is raising 270BTC via Havelockinvestments.com to purchase Bitcoin ATM (BTM) inventory for leasing to Operators and Exchanges globally. Ignite Financing currently has active orders for leasing on more than 80 units in 4 countries, with an additional 50 units on a waiting list for available lease units.

Havelockinvestments.com will open the Fund under the ticker of “BTM” on Tuesday, 12 August 2014 at 11:00 EST. Feel free to follow us on Twitter for up to date announcements: @IgniteFin

https://www.havelockinvestments.com/fund.php?symbol=BTM

250BTC will be used directly to purchase new BTM units from manufacturers for delivery to our existing waiting clients, with the balance going to Havelockinvestments.com and Ignite Financing for expenses incurred to date for fund set-up and management.

BTM Fund unit holders are entitled to receive dividends quarterly indirectly from the Fund's leases, less fund specific expenses and Ignite Financing management and administration fees. Ignite Financing collects fees monthly on behalf of BTM, and will place all pending dividend funds into a pool, to be dispersed quarterly through each disbursement period as determined by fund management (management will attempt to average distributions across each quarterly payment within each projected revenue period).

Dividend per unit of BTM is computed as:
Approved disbursement / # outstanding share = dividend per unit.
* See the Prospectus for further details.

If anything in the following FAQ differs from the prospectus, the prospectus will be considered as the actual case. Please read the prospectus and understand the risks involved. Neither Ignite Financing, nor Havelock Investments, are making an offer to sell these virtual units in any jurisdiction where the offer or sale is not permitted.


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Q: Why should I trust you?
A: I am Terry Woltman, all relevant contact information is provided in the prospectus. I have been verified via Havelock Investments and Seedcoin, and am active in the Bitcoin community in Mexico City and the US.
Find me on LinkedIn at: http://linkedin.com/in/terrywoltman
As well, Mike Snyder has recently joined the company and brings extensive technology related sales and operations experience.

Q: What manufacturer relationships do you have?
A: Ignite Financing has working relationships with Robocoin, Genesis Coin, BitAccess, bitXatm, and Lamassu. We are constantly working to bring additional manufacturers on-board.
edited to add: Diamond Circle, who we are just adding today.

Q: Are you qualified of running the BTM Fund?
A: Terry’s background is in network engineering and operations for national telcom providers in the US. Roles included 24x7 Network Operations leadership, Vendor management and negotiation, budgeting, project management, and stakeholder reporting.  As well, I have extensive experience overseeing financial back-office projects, B2B sales, consulting, and entrepreneurship. Finally, we have some excellent advisers to fill in any missing pieces.

Q: Why don't you raise money from angels, venture capital, or traditional lending?
A: We have raised Angel funds from private investors for Ignite Financing direct business operations. Our BTM Fund model allows Havelockinvestment.com qualified investors to participate in “fractional ownership” of many Bitcoin ATMs, increasing returns and reducing individual risk. This model is similar to purchasing Hash Shares from an organization like PetaMine (PETA), where you own a percentage of their hash capability, rather than buying an ASIC miner individually.

Q: How many BTM units will the initial raise fund?
A: We expect we will be able to purchase a minimum of 12 machines, but this depends on several variables, such as: manufacturer and options ordered. Depending on volume discounts from manufacturers, we could end up with more units in inventory.

Q: What reinvestment provisions does the Fund have?
A: The Fund does not reserve any revenue back for reinvestment, meaning that the total asset value of the fund will slowly draw down until all leases have been completed and the remaining assets liquidated. In the method the Fund acts as a loan with a variable rate dividend until completed. Investors are free to reinvest their returns in future releases or funds.

Q: What are the benefits to fractional ownership in the inventory?
A: The Fund expects healthy quarterly returns, so we believe that BTM would be an excellent to any investor’s portfolio, especially with the recent stability in Bitcoin price. Bitcoin ATMs allow immediate and physical access, so you will be helping to increase direct access to Bitcoin globally through BTM proliferation.

Q: What is your fundraising target? How do you decide whether this funding succeeds or not?
A: The target raise is 270 BTC. However, we would like to raise more (200-500 BTC) to fill even more of our outstanding orders. We could opt to continue raising via this fund, or via additional separate funds.

Q: So you will sell additional shares at some time?
A: That is the plan. Any additional shares released to the public beyond this initial raise will be for additional inventory for additional revenue streams, and will not detract from per share dividends over the course of the fund.

Q: Why don't you use Ignite Finance for your ticker?
A: Ignite Financing is separate from the BTM Fund, and is only providing management of the inventory for the fund in this case.  


Further information available at:
http://www.ignitefinancing.com/investors


Havelock Investments official discussion and Q&A
   (for registered users of Havelock Investment):
https://support.havelockinvestments.com/support/discussions/topics/1000034642

https://www.havelockinvestments.com/fund.php?symbol=BTM