[HAVELOCK] Crypto Financial (CFIG) Official Thread

[Crypto Financial]

CF,

Have you already discussed your planned "MO" with some potential (corporate) clients? How have they reacted?

Bitfair

Edit: And also, how does your offer compare to the Fidor+bitcoin.de or Aqoba+Paymium partnerships?

We have been approached by several corporate clients in regards to our Business plan. Most reactions have been very favorable
as we are open to new ideas. We are looking to be able to offer this service to Many Multinational Corporations that currently deal with various
currencies and a lot of regulations just to move some funds around their accounts throughout Latin America. It takes about 6 months waiting period to move money
out of Venezuela right now. With Bitcoins it would take a few minutes. So we personally see a huge market for our services here in Latin America in trade between
Merchants trying to move goods across borders.

Here is an example of what happens to a Multinational company when it can't move funds in and out of certain countries.

http://blogs.barrons.com/emergingmarketsdaily/2013/02/14/procter-gamble-latest-u-s-company-to-take-venezuela-hit/

I think the Aqoba+Paymium partnership is currently dead in the water, and the Fidor+bitcoin.de partnership is a great start to show that Financial services can be
integrated with Bitcoin.  I don't know enough about their current structure to compare it to ours. But we believe that not so far in the distant future more and more
companies financial and other will integrate Bitcoin into their daily business. It just makes too much sense and it can't be ignored.

[1715654519]

1715654519

[1715654519]

1715654519

[1715654519]

1715654519

[bitfair]

Thanks for the reply, I take it you have a few customers waiting to sign up as soon as your doors open.

Another question, if I may: does the agreement allow future dilution of these shares? If so, to what degree and what are the investors' rights in this respect?

[canth]

<snip>
Let us answer the Valuation question in a better more direct way, without diving to deep into forward looking statements: 
Does anyone out there believe that a company only needs about $100,000 or even $3 million in assets to be able to operate an International Fiduciary Financial Services.
<snip>

I get that needing $3m in capital is a reasonable thing for an operation of this sort. Our issue isn't that you need these funds - it's that the investors are getting such a low ownership stake given the risk we're taking. I think that you've got a great idea and there are many of us that will be willing to give you the funds to see if you can execute.

However, with investors appearing to have more skin in the game than the owners ($3m vs ), the 20% - 80% ratio doesn't sit well with me. I'm sitting on the sidelines for now.

[Duffer1]

Let us answer the Valuation question in a better more direct way, without diving to deep into forward looking statements...

...But our long term potential for growth and profitability is limitless...

Again you didn't actually answer the valuation/risk question with any of the numbers that investors care about.  I'm not trying to give you a hard time. Believe me I'll be in line to sign up for your service on opening day.  This isn't me being a customer, this is me as a potential investor.

Sorry for the wall of text, but please understand that we can't just come on this forum and provide every little detail of our operation...

Refusing, repeatedly, to be specific about your $12mil of the $15mil valuation, and what form that asset (capital) takes (bank loans? stocks, cash, etc..) is not a little detail.  Refusing to be specific about exactly how much capital has been raised and dedicated to this project, pre-IPO, is not a little detail man.  It's a huge factor used by potential investors to gauge risk vs reward.  You're offering 20% of the company for 3mil, but investors want to know precisely how much of the company that capital is paying for (is that 3mil 75% of initially risked assets?).  

...With a 20% stake of our company, our shareholders through Havelock Investments will receive about $760,000 which translates to a 25% ROI via dividends per share based on our IPO price of 0.15 BTC...

25% roi is more than double your prospectus' two year projection.  How long before you reach these projected numbers?  Five years?  I'm not saying that's a bad return if we were dealing with fiat, but this is a whole new game here.  One year is a lifetime in this space, and you don't project any returns at all in that time frame.  My biggest hang up with your offer is your valuation, but THIS is probably the biggest hang up for most other investors.

Here's what happens in the coming year:  Your tranches sell out at .15, the value of Bitcoin appreciates 50%, your stock value plummets as a result since the units are now massively overvalued.  It doesn't matter if the appreciation takes weeks or months, the depreciation of your stock value will happen in lock step with the appreciation of BTC (dividends are the only way to mitigate this).  Your initial investors are now screwed in every sense of the word (unless you split and keep splitting).  Mining companies mitigate that risk by literally printing the money that their offering is denominated in (BTC, plus it's very easy for investors to project a return).  Gambling sites mitigate that risk by offering very valuable, regularly reliable, dividends.  You're competing against both of those models for investments from people who understand just how plausible this scenario is.

Supporting you appears to be exceptionally risky because the financial reward is non existent in any time frame that matters (on top of the fact that you're already (probably) way overvalued).  Your offer is really only a 'good deal' for investors who believe the price of BTC will fall over the coming years.  (Ironically, your company will be helping to make sure that that doesn't happen).

[Duffer1]

Now that I've typed that out and thought about it a bit more I'd like to speculate some more about the generally expected value appreciation of Bitcoin, and how that relates to this IPO.  

If I was a group of banking and financial experts I might want to capitalize on my knowledge and build a Bitcoin related financial services company.  I'd write a plan, acquire funding, hire people, and profit.  We received all the funding we needed to get off the ground and cover the first couple years of operation so there's no need to take the company public to acquire growth capital.

If I was an unscrupulous group of financial experts intimately familiar with Bitcoin I might think to myselfs: "hey we've got this valuable asset now, but it's not generating revenue yet."  "This venture is kind of risky due to uncertain regulations so how can we use it now to generate some cash flow to recoup our outlays in case this all goes wrong?"  Asks one unscrupulous expert.  Another unscrupulous expert says: "I have an idea."

Maybe we could "offer" it as a "stock" on one of the Bitcoin exchanges.  We could quadruple the value (how would they know any different?).  We could offer the business plan, edited and redacted, in such a way that gives the impression that we bring $12million in total assets to the offer then ask for a further $3million from the community.  Voila!  We've made our initial outlay back in a matter of weeks!  "But wait!" says one expert, "why would anyone invest in us without proven dividends, or even a working prototype, at a time when BTC is likely to appreciate?"  "They likely wouldn't if they were thinking more than one month ahead, but people are dumb and will do what I tell them, I'll just dodge a minor question here and there..  pff there likely won't even be any awkward questions."

A year passes and our $3million worth of BTC is now worth $3.9 million (conservative 30% appreciation) our company has now started to turn a profit also.   At this point we could start paying out dividends to our investors based on our absurd valuation, but we're really unscrupulous experts now.  We've already gotten suckers to cover most (or all) of our initial risk.  Why don't we take this scam one step further.  

Instead of paying out actual company profits lets start paying out "dividends," but ONLY out of the realized profit from the appreciation we scammed out of our "investors" ("if they were dumb enough to buy into our offer in the first place they don't deserve to have real profits anyways" !DOUCHEBAGHIGHFIVE!).  This way we could keep the dividend payouts to a rate far less then they'd actually be entitled to if we were paying them out of real profits and we'd get to keep 100% of company profits, and our own BTC holdings would continue to appreciate.  How would they ever find out?  

[nubbins]

$3m vs

This. A thousand times, this.

People reading this thread now have to dig through 8 pages of posts, trying to find out what "" equals, and they won't find an answer. They'll just find 8 pages of other people trying to find out the value of "" and 8 pages of CFIG dancing around the answer.

It just looks like "$3m vs our totally sweet idea" at this point, and we all know the value of ideas.

When a company wants to list with Havelock, the basics are we review the business plan and confirm the identities of the operator(s).  Keep in mind we are not guaranteeing any listing on Havelock will be a successful enterprise and that everyone should invest.  It's up to each person to do their own due diligence as well, and if you are not comfortable then do not invest.

Nobody's expecting a guarantee of success, but we also don't want to see "Warning: Havelock does not remove likely scams" at the top of every asset page.

What did you guys see that everyone else missed? What's worth $12m besides their fabulous ideas?

[havelock]

When a company wants to list with Havelock, the basics are we review the business plan and confirm the identities of the operator(s).  Keep in mind we are not guaranteeing any listing on Havelock will be a successful enterprise and that everyone should invest.  It's up to each person to do their own due diligence as well, and if you are not comfortable then do not invest.

Nobody's expecting a guarantee of success, but we also don't want to see "Warning: Havelock does not remove likely scams" at the top of every asset page.

What did you guys see that everyone else missed? What's worth $12m besides their fabulous ideas?

I think you are misunderstanding.  Havelock does not make business decisions for the companies we list, determine what the valuation of a company should be or perform accounting audits.  We do our best to verify that a business will legitimately follow through on what they say they will do by vetting their business plan and verifying identifications.  We offer guidance and advice, but ultimately it is up to each company listing to structure their business in the way they feel will help them succeed.

Also, it's important to realize the difference between venture funding/crowdfunding and traditional IPOs and how each applies to the bitcoin securities world as it is now.  Venture funding at its heart is investing in people and their ideas and does not involve investing in established businesses (as with IPOs).   Right now, the bitcoin securities world is a hybrid of the two. Some companies list when they have revenue or will have revenue in the short term and are looking to expand (you could look at them as IPOs) while other companies list when they have a plan in place but won't be operating immediately and are looking to get started (you could look at them as venture funding examples).  So with that view, I understand why people would have questions looking at CFIG as a traditional IPO but if viewed as early stage venture funding, CFIC appears in a different light.  Again, Havelock isn't saying you should pick up some units in any of our listings, but we are giving people the opportunity if they so desire.

Hope that clarifies things.  Cheers.

[Crypto Financial]

Let us answer the Valuation question in a better more direct way, without diving to deep into forward looking statements...

...But our long term potential for growth and profitability is limitless...

Again you didn't actually answer the valuation/risk question with any of the numbers that investors care about.  I'm not trying to give you a hard time. Believe me I'll be in line to sign up for your service on opening day.  This isn't me being a customer, this is me as a potential investor.

Sorry for the wall of text, but please understand that we can't just come on this forum and provide every little detail of our operation...

Refusing, repeatedly, to be specific about your $12mil of the $15mil valuation, and what form that asset (capital) takes (bank loans? stocks, cash, etc..) is not a little detail.  Refusing to be specific about exactly how much capital has been raised and dedicated to this project, pre-IPO, is not a little detail man.  It's a huge factor used by potential investors to gauge risk vs reward.  You're offering 20% of the company for 3mil, but investors want to know precisely how much of the company that capital is paying for (is that 3mil 75% of initially risked assets?).  

...With a 20% stake of our company, our shareholders through Havelock Investments will receive about $760,000 which translates to a 25% ROI via dividends per share based on our IPO price of 0.15 BTC...

25% roi is more than double your prospectus' two year projection.  How long before you reach these projected numbers?  Five years?  I'm not saying that's a bad return if we were dealing with fiat, but this is a whole new game here.  One year is a lifetime in this space, and you don't project any returns at all in that time frame.  My biggest hang up with your offer is your valuation, but THIS is probably the biggest hang up for most other investors.

Here's what happens in the coming year:  Your tranches sell out at .15, the value of Bitcoin appreciates 50%, your stock value plummets as a result since the units are now massively overvalued.  It doesn't matter if the appreciation takes weeks or months, the depreciation of your stock value will happen in lock step with the appreciation of BTC (dividends are the only way to mitigate this).  Your initial investors are now screwed in every sense of the word (unless you split and keep splitting).  Mining companies mitigate that risk by literally printing the money that their offering is denominated in (BTC, plus it's very easy for investors to project a return).  Gambling sites mitigate that risk by offering very valuable, regularly reliable, dividends.  You're competing against both of those models for investments from people who understand just how plausible this scenario is.

Supporting you appears to be exceptionally risky because the financial reward is non existent in any time frame that matters (on top of the fact that you're already (probably) way overvalued).  Your offer is really only a 'good deal' for investors who believe the price of BTC will fall over the coming years.  (Ironically, your company will be helping to make sure that that doesn't happen).

Dear Duffer1,

Our Prospectus does not contain any forward looking statement on profit or loss, but only provides information on what our company will offer as far as the IPO is concerned in shares outstanding and product and services offered to the Crypto Currency customer.

In our Business Plan we did go over Financial Plans that show that on The "Operational Side of the Business" we project an ROI of ~12%. This projection if does not include however any
revenue generated and distributed to our shareholders from "Profit Sharing Agreement" signed with Exchange Platforms that will offer their services to our customers. We separated these two revenue streams as to show that our operating expenses could be recovered rather quickly within a year. And that the real growth and potential of the Company would not be derived from the wire In and Out exchange fees charged by our company, which we would like to keep as low as possible, but the true engine for growth for our company would be derived from Profit gained through the conversion of Crypto to Fiat and vice versa, Which we project to return on its own an expected ROI of ~25% annually based on IPO share price of
0.15 BTC.

We thank you for your interest in our company and are always open for suggestions on how to improve the way we do business.

[Crypto Financial]

<snip>
Let us answer the Valuation question in a better more direct way, without diving to deep into forward looking statements: 
Does anyone out there believe that a company only needs about $100,000 or even $3 million in assets to be able to operate an International Fiduciary Financial Services.
<snip>

I get that needing $3m in capital is a reasonable thing for an operation of this sort. Our issue isn't that you need these funds - it's that the investors are getting such a low ownership stake given the risk we're taking. I think that you've got a great idea and there are many of us that will be willing to give you the funds to see if you can execute.

However, with investors appearing to have more skin in the game than the owners ($3m vs ), the 20% - 80% ratio doesn't sit well with me. I'm sitting on the sidelines for now.

Dear canth,

In order to operate internationally as a fiduciary financial services company we are required to maintain a minimum amount of capital in the amount of at least $10 Million (Backed by US, not raised by this IPO). The $3 Million dollar value is the amount used for the start up operation of the company, during its first year. We are not looking to start the company on a shoestring budget and hope to grow from there, instead we are looking to be financially secure and build a strong company to face the head-winds of the Bitcoin world. The $3 Million offer was put in place to offer anyone interested the opportunity to get in "On The Ground Floor" before our company lunches. Please remember that Financial Companies are not only just in the Business of Money, but are also in the Business of Trade. We personally believe that once adopted by Corporations world wide the valuation of Bitcoin would sky rocket, as they see it as a way to first and foremost cut cost of moving funds around borders.

Crypto Financial is offering the Bitcoin community an opportunity to be a part of our growth potential. If Bitcoin or another Crypto Currency is truly the future of money, we together with you would like to be a part of it.

[Crypto Financial]

Thanks for the reply, I take it you have a few customers waiting to sign up as soon as your doors open.

Another question, if I may: does the agreement allow future dilution of these shares? If so, to what degree and what are the investors' rights in this respect?

Bitfair,

Future shares would not be diluted.

[nubbins]

If I'm following correctly, one of your main services is offering bank accounts with freely interchangeable USD/BTC balances, with a floating exchange rate at the time of sale/withdrawal based on the order books from partner exchanges/trade aggregators.



This looks great, but the big $10m "" surrounding CFIG's square is the key to this whole thing being real or being nothing.

A couple of reasonably intelligent people could whip together a business plan like this in two weeks, but unless the "" is real, you're just selling an idea for $3m.

Does Havelock at least know the name of the bank you're partnered with?

[Crypto Financial]

If I'm following correctly, one of your main services is offering bank accounts with freely interchangeable USD/BTC balances, with a floating exchange rate at the time of sale/withdrawal based on the order books from partner exchanges/trade aggregators.



This looks great, but the big $10m "" surrounding CFIG's square is the key to this whole thing being real or being nothing.

A couple of reasonably intelligent people could whip together a business plan like this in two weeks, but unless the "" is real, you're just selling an idea for $3m.

Does Havelock at least know the name of the bank you're partnered with?

Havelock does have the name of the Bank we are backed by.
And I like the drawing on the Napkin   Pretty much sums it up.

[felente]

i'm glad that latest communication is a little more constructive here.
trying to be optimistic but still ending being realistic until now. hm...

Havelock does have the name of the Bank we are backed by.

@Havelock

confirmation? 
THE question (maybe i have missed this already, but hey):

*) is there a panamian bank really backing these guys @ ~$10 mio?
=> if that's not explicitly verifiable, then is that at least plausible to you (Havelock)?

just yes/no style answer would suffice for me now...

this answer could change my mind about the 20/80 problem here in some degree. |
well there are other questions regarding, but this one is right one at the moment.

[nubbins]

Kinda surprised this wasn't addressed 7 pages ago

[bitfair]

Kinda surprised this wasn't addressed 7 pages ago

I assumed it was part of the statement: "Full Company and Personal Credentials have been provided to Havelock Investments" that Havelock has confirmed the affiliation with the bank in question...

[Duffer1]

In our Business Plan we did go over Financial Plans that show that on The "Operational Side of the Business" we project an ROI of ~12%. This projection if does not include however any
revenue generated and distributed to our shareholders from "Profit Sharing Agreement" signed with Exchange Platforms that will offer their services to our customers. We separated these two revenue streams as to show that our operating expenses could be recovered rather quickly within a year. And that the real growth and potential of the Company would not be derived from the wire In and Out exchange fees charged by our company, which we would like to keep as low as possible, but the true engine for growth for our company would be derived from Profit gained through the conversion of Crypto to Fiat and vice versa, Which we project to return on its own an expected ROI of ~25% annually based on IPO share price of
0.15 BTC.

So your break even projection (one year) is based on all revenue streams?  Sorry I had missed that.  Separation of revenue streams reminded me of something I read in the prospectus so I went back to look.  Regarding your dividend policy I'd like clarification: "On a quarterly basis Crypto Financial will offer dividends on net profits per share for all net income derived for the exchange of fiat currency to crypto currency and vice versa based on our profit sharing agreement with open exchange platforms.

The dividend policy appears to state that shares are only entitled to one revenue stream (your profit sharing agreements with other exchanges).  This is pretty important since your business plan (pg31) shows a REDACTED revenue stream with a projected $1.4mil valuation, but then says: "The above revenue stream does not take into account the commission that we will collect in fees as part of our profit sharing agreement with the exchanges."  Are shareholders entitled to this mystery revenue stream?

What exactly is a shareholder entitled to?  20% of all revenue?  20% of one specific revenue stream?  I understand there's a language barrier, I have to tell you that your dividend policy in you prospectus is rather ambiguously worded.

In order to operate internationally as a fiduciary financial services company we are required to maintain a minimum amount of capital in the amount of at least $10 Million (Backed by US, not raised by this IPO).

But how is that capital at risk?  You've managed to get $10mil in assets pooled to show you're serious, but that money isn't spent, or at risk in any way, am I right?  If the venture doesn't succeed you still have that $10mil.  0% risk.

The $3 Million dollar value is the amount used for the start up operation of the company, during its first year.

Your financial plan says you have $1.5mil cash on hand, and you're asking for $3mil more.  In terms of risk you're putting up 33%, asking for the community to cover the remaining 66%, and you're only offering 20% of the company for the privilege.

What happens to your company if this first tranche fails to sell out?

[MonkeyBear68]

The Crypto Financial website was up earlier today informing potential customers of what is planned:

http://www.cryptofinancial.io/

The link above is from the main page on Havelock under the "What's New" listing for CFIG. When I viewed the website earlier, I thought there was a reference to Belize in the website. I cannot confirm as the website is not up now. Is the partner bank in Panama or Belize?

[DeathAndTaxes]

THE question (maybe i have missed this already, but hey):

*) is there a panamian bank really backing these guys @ ~$10 mio?

I think you are assuming to much.  The issuer hasn't said that any bank is "backing" them to the tune of $10M.  It just has been a lot of double speak.  The company has never outlined what assets it has if any.  They simply value their company (pre-IPO) at $12M and a lot of vague statements about how a bank would require them to have significant assets without stating the company has those assets.  Sure you can try to read between the line and make some assumptions but that is kinda the whole point.  The issuer isn't liable for any losses you suffer for making assumptions.  If you assume they have been "backed" by a bank to the tune of $10M and they haven't well that is just poor due diligence on the part of the investor.  

The company should provide details in black and white.  Making statements about what a bank may require is double speak.  Does the company have $10M in tangible assets? What is the break down of those assets?  We are talking about a (in theory) $15M deal here.  Has the company had their balance sheet audited.  Is a CPA willing to (under penalty of law) certify the balance sheet of the company (pre-IPO)?  How much working capital (this is unecumbered, cash and liquid short term assets) does the company have ON HAND.  .  Remember in a balance sheet ANYTHING the company owns is an asset.  Asset doesn't mean only cash in the bank.  For example the company could value their idea at $12M and they have "$12M in assets".  They aren't a public company, they aren't required to have any outside auditing of their valuation.

I think you are taking the two statements (paraphrased):
a) "founder value company @ $12M"
b) "the company is backed by a bank" (note this term used loosely could mean anything from a business partner to the company has an account with the bank)

and making a leap to ASSUME that:
c) "the company has been backed by a bank to the tune of $10M/$12M"

a & b have been said but c hasn't.  If your assumption is incorrect well that will be massively expensive.  My guess it the company had an idea and maybe some business contacts as well as an interested banking partner.  The investors are putting up all the cash and getting 20% of the company.  The $12M is based on self evaluation and nothing that would stand up to a third party (CPA) scrutiny.


Remember we aren't talking about a $50,000 mining bond here.  Venture Capitalist tend to require more verifiable disclosure for smaller sums of money.  This lack of transparency wouldn't get $100K in seed funding much less $3M equity stake.

[felente]

THE question (maybe i have missed this already, but hey):

*) is there a panamian bank really backing these guys @ ~$10 mio?

I think you are assuming to much.  The issuer hasn't said that any bank is "backing" them to the tune of $10M [1].
It just has been a lot of double speak [2].
...
If you assume they have been "backed" by a bank to the tune of $10M and they haven't well that is just poor due diligence on the part of the investor [3].
...
The company should provide details in black and white [4].
...
Remember we aren't talking about a $50,000 mining bond here [5].
...

sorry for shorting of wall of text
i personally DO NOT assume something yet. i'm just neutral due lack of information.
because of that there was stated by me:

...
=> if that's not explicitly verifiable, then is that at least plausible to you (Havelock)?
...

presumably i trust Havelock and his opinion would be worth a consideration for me.

further:
[1] CF stated it here and thus my particular assumption-question :

Havelock does have the name of the Bank we are backed by.

[2] Yes
[3] I do not assume
[4] Yes
[5] Yes. => Even if this were a mining bond, some more informativeness is demanded.

[Korbman]

Havelock does have the name of the Bank we are backed by.

@Havelock

confirmation? 
THE question (maybe i have missed this already, but hey):

Havelock was provided all details (full plans, identities, etc) of Crypto in order for them to get listed, but since I don't work for Havelock I'll leave it up to Lightbox / Havelock to say "Yes".

Kinda surprised this wasn't addressed 7 pages ago

Crypto is slowwwwlllyyy learning that people don't just throw down $3m in Bitcoins because an interesting idea is at stake. Investors (on these forums or elsewhere around the world) require substantial evidence before taking such risks.
This isn't a mining bond, group buy, or whatever...this is a real venture. Convince potential investors as such.

The company should provide details in black and white.

If only, but doing that puts peoples lives at risk.