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Author Topic: Raising BTC for a BTC generating business / project  (Read 931 times)
Hunterbunter
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June 19, 2011, 03:09:35 AM
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Lets say I'm looking for funding for a project I'm already working on, and there are people with BTC that are interested in investing for a share of the pie. Are there any mechanisms that would make this possible, and appropriately accountable?

I guess I'm talking about something similar to a company; raising capital for this venture, so I can spread the risk and give the opportunity for reward and growth to others, but in BTC.

I would draw a salary in BTC, as well as have my own share of the project, and pay for whatever needs to be done externally to complete the project via btc (if possible), with a business plan and proper accounting in place.

The only reason I'm thinking of BTCs are because I believe in the ideals behind this economy, and for it to work, it needs people to start creating reasons to own BTC.

The project will develop a product that can / will be sold via BTC, which then gets split up by the investors on a monthly basis or something.

If a company is a bad idea, it might be better to make it a once off collaborative project, with a manifesto describing the project, what it wants to achieve, the start and end points, and the payoff from such.

Any ideas? Anyone have experience in this sort of thing that can help me? Obviously the most interested in this would be those who actually believe in the economy, and its future as one.
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June 19, 2011, 03:49:37 AM
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good luck with your business/project
Hunterbunter
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June 19, 2011, 04:24:42 AM
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Thanks, but any thoughts on the model?
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June 19, 2011, 05:43:29 AM
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write up a business plan. offer shares on the bitcoin stock exchange. If it is good, you will find interested investors. If not, you won't.
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June 19, 2011, 07:12:46 AM
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I have a lot of business and marketing experience.

You need to think how you can help others.

Who needs help and is not getting it? Where eventually a product or service that you create could help them? Can you bring two parties closer together who need help? Can you educate? Could it be software that helps them?

And why the need to raise funds? Sounds like you have an obsession with the framework but no idea for the business. That's the wrong way to think about things. Could be that you need only work alone on this.
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June 19, 2011, 08:34:56 AM
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oic, well I was just after a general idea before I dove into what my project actually was, but I suppose I could add more info;

I'm an indie game programmer, working towards a space shooter set in the near future, soon after we've colonised Mars. I've been developing the game for around 5 months so far, part time, and I've realised that I need to start spending more time on it if I want to get it finished within the next 12-18 months. Since I have bills to pay / family to support, I figured I can either go the minecraft route of pre-selling the game and keeping all the income (which is currently my first option), a traditional route of finding a publisher (and getting royally screwed on income), or by finding investors and splitting the income there (which I'll consider if it helps the BTC economy gain a little resilience). This thread was just about garnering the viability of the third option.

The game is aimed as a full release indie, and if I kept it out of the BTC network my goal was to try and release it via steam, as I believe there is room in the market for the game I'm making, and it will turn a profit.

http://www.blisteringdevelopers.com/blog/ has a few videos etc where you can see work in progress, if you're interested. Battalion Genesis is a working title that'll probably change before release.

The game will sell units, if via the BTC route then maybe BTC only (eg 0.1-2 BTC per sale, depending on its value at time of release), and the idea is for investors to simply profit from its sale. 1000 BTC in a savings account doesn't really do much except gain/lose against others, and if people are willing to take the obvious risks involved, the reward would be more BTC. Risk includes things like the game selling poorly, BTC market not being large enough, game not being fun, game taking too long to finish (and reducing viable sales price) etc.

Hmm I've just realized one of the problems with BTC. The longer it takes to start generating income after investment, the more difficult it will be to recoup that (since BTCs are harder to mine). Could this be a serious problem?

@lemonginnger: Cool bitcoin stock exchange you say. What's the best way to show the completed business plan? A simple thread on this forum with all the info on it? or separate website etc? I only have a wordpress blog atm, and I could probably find help with making a better website from within the BTC economy.

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June 19, 2011, 08:37:52 AM
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A Wordpress blog is fine. Wordpress is a fully blown CMS these days. Changing your CMS won't improve anything, especially if its already well up to the task anyway.
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June 19, 2011, 10:38:27 AM
 #8

http://glbse.com/ is the BTC stock exchange.

I could be interested in this project, but I would need to be convinced that it provides something unique and interesting over other games. For example braid, minecraft, super meat boy, are the obvious success stories. I do believe there is a gap in the indie game market for a space shooter if it provides something new and innovative as well.

Cool, thanks for the link.

I agree, a gap exists and just needs that innovation to bring players back in.

What do you think of the development time as an investor problem (against exponentially rising currency)? I've been thinking, and it could be a real problem.

Back of the envelope calcs for side by side versions of the same project (btc economy vs $ economy):

BTC in ->BTC out
Raised: 20k BTC (approx $400k)
USD/BTC over 18 months: 20->200
Steam games: $20
Game price: 0.1BTC (competitive price in USD)
Spent: 10k BTC (costs reduced over time due to exchange)
Breakeven: 10k BTC, or 100,000 unit sales

instead,
$ in -> $ out
Raised: $400k
USD/BTC over 18 months: 20->200
Steam games: $20
Game price: $20
Spent: $250k (costs increased slightly over time due to inflation)
Breakeven: $250k, or 12,500 unit sales!

The breakeven in $->$ is reached in much fewer sales than BTC->BTC, and if somehow exactly the same number of games would have been sold if either was the currency, it gets interesting. If it was a smashing success with 500k units sold, its 50kBTC vs $10M (exactly the same amount of revenue), except a 1000BTC investor would get back 3000BTC ($600k over $20k investment), and a $20k investor would get back $507.5k. Rough figures, of course, and I guess the difference is due to the reducing cost over the life of the BTC project vs rising cost of $ version.

The risk is the big gap that needs to be covered by break-even point. If the venture is a flop, and only 10k units are sold, $->$ investors get back around 87% of their investment, and BTC suffer only 55% of their coin coming back.

I suppose BTC->BTC investors could see it as investing in the currency, as that's essentially where the currency has gone -> intangible value of the BTC), but how many people would do that? The other thing is that if its a BTC only game, it means there's more demand for the currency, helping its price up, which I haven't accounted for.

If it was targeting purely BTC owners (increasing the trade of BTCs), then the price might be set by supply/demand of coins; 1btc per copy only needs 10,000 sales to break even, but only to the early adopters with loads of coin...everyone else probably may not think 1BTC (the equivalent of $200/game) is worth the "usd" price. It'll seem as though the game's really expensive, when really it's just trying to recoup a lot of coin investment. Of course if the game still sells 100,000 copies @ 1btc, that's a tremendous return for investors.

So the question I have now, is how many people with BTC are willing to part with their coin, knowing that there's an inherently greater risk in getting all of their money back, but the reward is potentially higher? How many people with BTC stored are going to spend the equivalent of $200 on a game? the rising price could destroy it Sad
Hunterbunter
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June 29, 2011, 02:59:41 PM
 #9

K so bit of a bump for this thread, as I've written my business plan and I'd love some more advice.

I've submitted the plan to the Bitcoin Venture Capital site (http://www.btcvc.com/), but didn't hear as much as a peep regarding that it was received, anyone vaguely interested, anyone even knew it existed at all, etc, so I'm going to give the glbse some thought, and possibly a listing.

Who do I talk to about figuring out the listing part? I setup the command version to access it, but I still need some practice in using it, which I can do, and had a quick look at the web version. Nefario?

It looks like I'm also trying to raise quite a lot more funding than most of the other projects on there (around 25k BTC), as I'm creating what will be a professional product earning in BTCs only, and I have to account for the currency's volatility a little. Is it too soon to be after that sort of funding? Or is it simply a question of put it up and see?

I'm happy for people interested in investing to have a look through the business plan I've created, but I don't particularly want everyone to have easy access to my details. What would be the best course of action there? or is there really no hope in a public listing?
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