Coinbase - Become an Investor - Good Investment?

[Rob768]

After reading the documents about coinbase on thefundersclub it appears that their valuation for this funding is $5 million.  So they are giving away 5% equity for $250k.  Not positive on this.  Not a securities lawyer

[maxme]

Can someone explain this: https://thefundersclub.com/download/legal/39/ ?

- Convertible note converting to Preferred Stock upon first Qualified Equity Financing at the price per share of the financing round with a maximum pre-money valuation of $10M

- If more favorable terms are offered to subsequent note holders, the fund may elect to receive those terms

-Converts at a $5M pre-money valuation to Series AA Preferred Stock if no Qualified Equity Financing occurs within 2 years of note, w/weighted average anti-dilution and 1x liquidation preference

-Converts at lesser of $5M or fair market value to Preferred Stock if Change of Control or IPO occurs within 2 years of note without a Qualified Equity Financing, or the note may be paid off at fund’s option

[Steve]

In a way, buying bitcoins is an investment in all bitcoin related companies.  You'll stand to benefit if any one or several of them are successful.

So why are you involved with bit-pay? You could have just bought up a bunch of BTC instead. Are you doing charity work for the rest of us? 

I didn't say not to invest in specific companies you might think will be successful...just commenting on the nature of buying and holding bitcoin.  The infrastructure around bitcoin (that individuals and businesses create) will increase the value of bitcoin itself.  Likewise, the increasing value of bitcoin helps those businesses finance themselves (assuming the businesses have themselves invested in bitcoin).  Clearly, if everyone just bought bitcoin and then sat on their ass, bitcoin wouldn't end up being nearly as valuable.  But, just buying and holding bitcoin does help bitcoin businesses.  You are deferring consumption and allocating capital to the bitcoin ecosystem.

[paulie_w]

tell me again why we want to have more hosted wallet sites? it just seems like an incredible target for hacking.

actually, have any exchanges escaped hacking yet?

[dissipate]

In a way, buying bitcoins is an investment in all bitcoin related companies.  You'll stand to benefit if any one or several of them are successful.

So why are you involved with bit-pay? You could have just bought up a bunch of BTC instead. Are you doing charity work for the rest of us? 

I didn't say not to invest in specific companies you might think will be successful...just commenting on the nature of buying and holding bitcoin.  The infrastructure around bitcoin (that individuals and businesses create) will increase the value of bitcoin itself.  Likewise, the increasing value of bitcoin helps those businesses finance themselves (assuming the businesses have themselves invested in bitcoin).  Clearly, if everyone just bought bitcoin and then sat on their ass, bitcoin wouldn't end up being nearly as valuable.  But, just buying and holding bitcoin does help bitcoin businesses.  You are deferring consumption and allocating capital to the bitcoin ecosystem.

A company that has a significant amount of money invested in Bitcoin directly is crazy. Bitcoin can lose half of its value in an hour. That's not something you can build a business on...

[mc_lovin]

Why don't they accept bitcoin donations?

[Rob768]

Bitcoin currently is a bit confusing to those normal internet users who aren't savy with the latest tech news.  I think something like coinbase will help in alleviating that confusion.  Its modeled after paypal but doesn't charge any transaction fees.  Should catch on well. 

[crazy_rabbit]

Bitcoin currently is a bit confusing to those normal internet users who aren't savy with the latest tech news.  I think something like coinbase will help in alleviating that confusion.  Its modeled after paypal but doesn't charge any transaction fees.  Should catch on well. 

"Its modeled after paypal but doesn't charge any transaction fees."

Um, are you describing Coinbase or Bitcoin because all coinbase offers at the moment is another ewallet service. And we don't know how secure it is either.

[Rob768]

Coinbase.  Yes it's a wallet service.  Seems pretty simple though and has silcon valley backers.  I'm sure security is one of their top prioroties

[Steve]

In a way, buying bitcoins is an investment in all bitcoin related companies.  You'll stand to benefit if any one or several of them are successful.

So why are you involved with bit-pay? You could have just bought up a bunch of BTC instead. Are you doing charity work for the rest of us? 

I didn't say not to invest in specific companies you might think will be successful...just commenting on the nature of buying and holding bitcoin.  The infrastructure around bitcoin (that individuals and businesses create) will increase the value of bitcoin itself.  Likewise, the increasing value of bitcoin helps those businesses finance themselves (assuming the businesses have themselves invested in bitcoin).  Clearly, if everyone just bought bitcoin and then sat on their ass, bitcoin wouldn't end up being nearly as valuable.  But, just buying and holding bitcoin does help bitcoin businesses.  You are deferring consumption and allocating capital to the bitcoin ecosystem.

A company that has a significant amount of money invested in Bitcoin directly is crazy. Bitcoin can lose half of its value in an hour. That's not something you can build a business on...

Any Bitcoin business that isn't investing in Bitcoin is crazy, if not schizophrenic.  A Bitcoin business is investing in Bitcoin by definition.  If Bitcoin doesn't succeed, neither will the business.  Now, certainly prudent investing is advisable.  The value of Bitcoin is volatile and risky, so any investment should be regarded as such.

[556j]

I think it's a bad investment.  Some good points in the reddit thread

http://www.reddit.com/r/Bitcoin/comments/z19z8/coinbase_a_paypal_for_bitcoin_is_looking_for_250k/

[Rob768]

Which particular points are you referring to?

[piuk]

I have some shares in coinbase.com available for sale. PM me if interested.

[Rob768]

How many shares?  How did you come by them?  I will pm you now

[provenceday]

nice investment!

anybody still hold their shares?