https://btct.co/security/BTCIBitcoin Investments - Mining stocks Investment fund
To use the proceeds of the IPO to buy shares in mainly in bitcoin based mining stocks with a strong organic growth plan. To focus on the soon to be five listed mining stocks on the exchange. We will also look into other bitcoin securities with a strong growth plan also on other exchanges. We will try to avoid bonds. 47.5% of the profits made will be reinvested into buying more shares and increasing our market capitalisation as well as increasing dividends. It could be decided by motion to increase this amount but not decrease it until our market capitalisation is too large or the fund staff can earn a full time living wage by working for the fund. Another 47.5% will be paid out in dividends. With 5% being paid to the fund operators. The funds operators will receive 1% of all shares created. 25,000 shares will be created and issued at 0.01BTC. Any future share issues will be decided by motion. Any major shareholder can ask for a motion and any group of small shareholders can ask for a motion. The only motions not allowed unless agreed to by the fund operators are on decreasing the growth fund, on closing the fund down or replacing the chief operator (Matthew Holt).
Accounts Spreadsheet -
https://docs.google.com/spreadsheet/ccc?key=0Ap02rO_j4NLvdGtoZlhpNHZiOXNIMldIU2xsUHkxLVE A few issues (mainly minor) that hopefully you can fix before unlocking the assets for mods to vote on :
1. You say you'll invest mainly in securities that have a "strong organic growth plan". Could you please explain the difference between this and a "strongth growth plan" and how your fund works out whether growth is organic rather than inorganic? i.e. is "organic" just a buzzword you threw in or does it have some significant meaning?
2. You say "The funds operators will receive 1% of all shares created". Do you actually mean this - or do you mean 1% of all shares sold? As written you'd start off with 250 shares - meaning you'd own 100% of the fund , 50% after 250 shares were sold etc.
3. You need a close-down plan.
4. As it claims to be a fund, how is liquidity being provided? Will some means be provided for investors to sell back their shares at near to NAV/U? This is of particular concern since the initial tranches of shares being sold is fairly large (more than your lTC fund has sold in the 3 months+ it has been running) so there'll be a price ceiling but no floor is being set.
5. Is the price of the first 25000 share going to stay fixed at 1.0 even if NAV/U significantly changes? If so then that prevents any growth in price if NAV/U rises - and means investors have no way to realise any value from increased NAV/U until the whole 25000 have sold out. It also means if NAV/U falls you have to continue selling units at 1.0 - even when it's become unrealistic/unattractive- making it very hard to sell any more (as happened with your LTC fund for a few months).
6. What is the policy on the price of extra shares issued after the first 25000?
7. What is the fund's policy on buying back shares on the market (linked a bit, but not entirely, to point 4)? Are managerial shares returned in ratio if this happens? Is there any restriction on whether the manager can sell the shares he is given (obviously relates to previous sentence)?
8. Do you have any policy on spreading risk / limiting risk per asset and /or per issuer (where one person issues multiple assets)?
9. Will you only invest in BTC-denominated assets or will you also invest in ones denominated in other crypto-currencies (presently that would be mainly LTC - but obviously that could change over time)?
9. There should be a statement in the contract that you won't invest in any other asset managed by yourself (it's banned under BTC.CO rules anyway - but should be explicitly stated).
On point 8 you need to make sure you understand the (exchange's) restrictions on long-term investment companies -as your LTC fund is in breach of them. Main ones are no investing in other stuff you manage and no investing in other long-term investment funds (the 2nd one is what your LTC fund has broken - by holding DMF). To explain why that rule exists (from my recollection of discussion at the time) any investor in your fund is paying THREE management fees on dividends from assets invested in by DMF's - the asset's own fees, DMF's management fee and then yours on top. Plus you're charging a fee to manage the fund, then delegating responsibility for investment decisions on a portion of the fund to DMF's management but still taking a fee on the proceeds from that. Plus your fund's exposure to risk per asset/ asset issuer is no longer entirely in your hands (as you gain/lose exposure when DMF changes its investments). Plus if you can invest in DMF then DMF could invest in you - then we'd have a feedback situation where both of your prices could move together in an unrealistic manner due entirely to changes in one feeding back to the other and then repeatedly going through the same cycle.
I'm not trying to put you off running the fund - just want to make sure everything's clear before you start.
