Hello everyone,
New to the forum, fairly new to bitcoin.
I'm hoping to get a few questions answered about the investment section here from those that invest in the various projects offered. Given the way this forum is sectioned off I'm not sure if those that might be able to answer my questions even read here but posting in case they do.
- bitfunder is gone - anything to replace it?
I was ecstatic to see that there was a place for businesses to raise capital via bitcoin then sad to see it was no longer in service. Are there currently any working replacements?
- Any significant interest in standard businesses or mostly Bitcoin related?
- I've looked through quite a few of the posts from those looking to raise capital and while I've seen some "typical" businesses looking to raise funds most of the offers have something to do with bitcoin whether mining, gambling or something else. Just wondering if a standard business looking for investors would interest some or would other sources of capital be a better place to start?
- Are "smaller" businesses welcome or are investors only after the home run?
- I see that a lot of companies / people are trying to raise $100,000 or more. I'm curious if anyone is interested in smaller companies or start-ups or if most favor the larger businesses? For reference, I have one online business that I would like to expand that currently brings in around $20,000 per year. More importantly, I have several start-ups that I would like to raise much smaller amounts on, say $1,000 to $10,000 total, but have been unable to find a good place to seek investors. The crowd funding sites don't allow one to offer "shares" or ownership stakes so I have ignored them for the most part.
- Finally, is non anonymity a must?
- I am fully aware that this may sound shady from the jump but on the established business I'd like to focus on remaining anonymous is a must for several reasons. Is that a deal breaker? I wouldn't be opposed to verification from a trusted third party or something but I would not at any point wish to make my name or the site information public. I am fully aware that this is an added layer of difficulty but is there any chance it would be possible?
In summary, I have at least one business that I think the community here would find interesting, fun and profitable and looking to get a few questions over. I can't even post in that section yet and obviously have no reputation here but in my excitement I had to post in the hopes that this would make a great fit.
Other than that hello everyone and I look forward to learning more about bitcoin and discussing it with all of you.
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Hi,
1) Two sites similar to BitFunder: havelockinvestments.com and cryptostocks.com . Of the two, Havelock has a better reputation and higher trade volume. Many investors avoid Cryptostocks because of problems getting support from customer support, and because of some controversial actions by the owner (he also runs Vircurex and sold shares in it on Cryptostocks; per the contract, the IPO was supposed to be cancelled if less than a certain number of shares were sold, then after they weren't sold, he changed the required number in the contract in order to avoid having to cancel the IPO; later, after Vircurex was supposedly hacked and BTC stolen from the exchange, he started withholding dividends on the Vircurex shares as a way to make up for the loss). There is also a third exchange, MPex. This exchange charges a hefty one-time 30 BTC fee to register with them; you can avoid this fee by accessing MPex through a broker, like CoinBr.com (CoinBr charges something like a 0.019 monthly account management fee).
2) There is no requirement that the business must be Bitcoin related. Nowadays I think many people are attracted to businesses whose income, expenses, etc. are denominated entirely in Bitcoin, because Bitcoin has been rising in value so much lately compared to fiat that it is possible (actually, likely) for a business whose income, etc. is in fiat to make a profit in fiat and make a loss when it is converted back to Bitcoin. Even if a business makes 20% profit in fiat, investors will still come out behind (with less BTC than they started out with) compared to just holding on to their Bitcoins if Bitcoin rises 40% in value compared to fiat during the same period. That said, there are investors who do invest in the non-Bitcoin companies. Some do it as a way to hedge against the possibility of Bitcoin remaining stable or falling in value. Others do it for diversification purposes; some of the non-Bitcoin companies currently out there include precious metals funds, real estate (RentalStarter, former BitFunder asset), and mineral exploration (Kenilworth, former BitFunder asset). Others do it because they want to support Bitcoin, and they believe that for Bitcoin to become more mainstream, more non-Bitcoin companies need to get involved with Bitcoin.
In terms of the question about where the best place to start would be, I can't answer that for you. I can tell you that Bitcoin itself has a lot of ups and downs in value, and is still considered risky for investment purposes. Because of the increased risk, investors tend to expect higher levels of returns than in the fiat world. Also, Bitcoin itself has risen dramatically in value over the last year (from around $10-12 last December to around $1000 now). A number of businesses (and individuals) have gotten a rude surprise when they borrowed BTC a year ago to finance business ventures, and now have to pay back 100 times what they originally borrowed. I know one person who borrowed 2 BTC a year ago to buy a pizza; fortunately, she paid her loan back soon after, because if she had waited until now to pay it back, that pizza would have cost her $2000. If your business has all its income and costs in USD or another fiat currency, if you are able to obtain a conventional loan from the bank (or have a credit card), you may find it more advantageous to avoid the exchange rate risk and just get the loan from the bank or use the credit card. It's true that using a bank loan or a crowdfunding site, you would get the loan, but would not have investors. Then again, you may or may not need investors. Is there any advantage to your business to have investors, other than the money they would provide by purchasing the shares? (because you could get the money through a bank loan or credit card) In theory, having investors might benefit the company because it might work almost like a referral program: some investors, while checking out the company that they just purchased shares in, might visit its website and make a purchase themselves. Others might refer their friends etc. as customers, knowing that they can increase their own profits as investors by increasing the company's profits. But other than using the investment opportunity as a way to generate publicity for the company and traffic/customers for its website, I'm not sure what benefit the investors would provide other than the funds they provide (which could be obtained elsewhere).
3) Bitcoin-based investing and fundraising currently is a little bit like the wild west. I haven't seen any rule posted anywhere that only large businesses can seek to raise funds here (in fact, I have never seen any share offerings from Microsoft, Apple, etc. here). I know some of the companies have sought to raise large amounts of money, given themselves high valuations, etc. A lot of that seems to be exaggeration, optimistic sales growth forecasts, etc., frankly. In your case, you have the advantage that this is an established company that apparently has relatively stable monthly income already coming in. This gives you an advantage in seeking funding over startups that have a lot of ideas, but no actual product, website, or sales yet. In your case, since your company is already established and you don't need funds for startup costs, investors will want to know what their money will be going toward in terms off expansion, etc.
4) In terms of the anonymity, are you referring to anonymity of the company, or your identity? If you are asking investors to invest in the company, most investors will want to know what it is they are investing in before investing their money, visit the company website so they can see how professional the website looks, form their own opinion of how profitable the company is likely to be, etc. If you just ask investors to give you money to be invested in an unspecified company, a few people may buy a couple of shares out of curiosity, but I would not expect you to be able to raise significant amounts of money. I'm guessing that if you try to take out a small business loan, the bank will also want to know about the business. If anonymity of the business is required, then your best bet would probably be just to take out a personal loan, or use your personal credit card to make whatever purchases are required for the business, rather than asking banks to give you business loans or investors to invest in it. If you are worried about investor backlash due to some sort of a controversial business, I can tell you that people on this forum tend to be libertarian types, and are unlikely to jump all over you, whatever the business is, as long as it is legal (see, for example, the many gambling websites accepting investors, and CANNABIT on Cryptostocks). The main thing that tends to be important to investors here is transparency: they want to know what they are investing in, each month they want to know what the company's profits and expenses were, what the dividend per share was, etc.
In terms of your personal anonymity, that is something that has been changing. In the past, it was not so important. But since then, the bull market in BTC equities has ended. Investors now are realizing that they can't just follow the Noah's Ark model of investing and buy one or two shares of everything offered, and expect most of the things they invested in to go up. Also, many people have been burned over the past few months by things like asset issuers either disappearing (CreativeX) or claiming that they were hacked and the BTC stolen (TradeFortress). With BTC rising so much in value these days, investors are starting to realize it may be better for them just to hold on to their BTC rather than trying to 'invest' it in anything these days, especially when counterparty risk is taken into account. Many investors nowadays are no longer willing to turn over their BTC, at least significant amounts of it, to anonymous people... At the same time, some asset issuers don't necessarily want to be putting scans of their government ID etc. all over the internet to try to prove who they are either. One compromise solution that I think has been used by some asset issuers has been to provide their identity information to a reputable forum member (such as Deprived), or to the exchange that they get their asset listed on. In this case, the investors have the security of knowing that your identity has been verified and that you won't be able to scam them anonymously and just disappear, even though they personally don't know who you are.... I should warn you in this case, though, that your identity may be an issue of interest to the investors: since you are seeking investors in a small business apparently run by yourself as a sole proprietor, it is natural for investors to want to know more about you and your previous business experience, academic background, etc. This is especially so in your case, since you have a new forum account, so people here don't really know you very well yet.
To sum up, you are free to ask people to invest, but it will be hard to attract significant investment without telling people what they are investing in, although people may buy a few shares as a gamble just to see if they get lucky. But in this case, it will probably be a lot simpler for you just to get a personal loan from a bank, or use your credit card. If you need a loan in BTC, you could try BTCJam.com.
I hope this helps.
Good luck!
