My guidelines for Investment/Involvement

[Deprived]

If you wouldn't PM me for advice/investment then ignore this as it isn't directed to you.  This post is aimed at all the people who think "I want to be the next ASICMINER" or "I want to be the next S.DICE" but lack money and ability so think PMing people with both can somehow make them useful.  People with a real plan already know what they're doing.  Those running blatant ponzis/scams know better than to ask anyway.  It's those in between that I'm addressing here.

I get a bunch of PMs that fall into one of the following categories:

1.  What do you think of X?
2.  I want to IPO X will you help write the prospectus and/or market it?

Here's the absolute basics you need to meet for me to answer "yes" or even "I want more details" to either:

1.  If you're asking for X BTC then I want proof (NOT your word) that you already have X/4 BTC either as your own capital or as investment from private investors.  If you want to raise 10k BTC that means you need 2.5k BTC yourself or from friends/family/acquaintances.  This requirement is simply because if you don't already have (or have access to) capital then there's a reason for it - and normally that reason is that you should NOT have such access.

2.  I want something pretty solid proving that anyone who invests will end up with more than they started with.  That's in whatever currency you're listing in.  If it's a USD investment then a profit in USD is fine.  If it's a BTC denominated investment then that profit has to be in BTC.  If you're mining BTC and selling shares priced in BTC then you fail this criteria - right now there's no hardware for sale that can safely be assumed to mine more BTC than it costs (if you're mining alt-coins then you CAN meet the criteria if your power costs are low enough).

3. If your 'investment' relies on customer volume then you need some evidence (e.g. surveys) to establish you'll get that trade volume.  I have zero interest in yet another gambling site which will do well if it gets 50% market share but has no evidence to suggest it'll even get 1%.

Now that 99% of you have been excluded the other 1% can feel free to PM me.  If you're in the 99% and PM me don't be offended if you don't receive a reply - I stopped replying to begging PMs a while back (and if you don't have any money or any plan you ARE begging as you're asking for my time which is worth something to reply to your 'IPO' which is worth nothing).

I have no interest whatsoever in your plan to borrow 5 BTC to list a security so you can raise 10K BTC to make ASICs.  I have just as little interest in your plan to sell shares to buy 10K BTC worth of ASICs, give half the mined income to investors and keep the other half yourself.  I have even less interest (were it possible) in the fact that you held some shares for a few weeks, made some profit so now want to run an investment fund worth 100 times your total worldly wealth.

I expect that most other people who actually HAVE BTC and knowledge/ability feel the same way.  It's not our job to give you a chance.  It's your job to prove you deserve one.  Don't waste our time when you're just an unproven beggar.

[ThickAsThieves]

Co-signed.

[DrGregMulhauser]

Here's another approach, which I've sometimes used in various forms in the past (prior to launching the BTC Growth fund) and which is currently posted on the BTC Growth website:

Are You Seeking Investment?

The gist of it is that rather than asking people to interpret my guidelines in advance and to try and decide how they apply to their own cases -- and thereby inevitably creating debates about interpretations and exceptions -- I simply require an up-front fee to cover my time spent reading, evaluating, and providing meaningful feedback.

Those who have received feedback from me know that I take the process seriously, and I give it to them straight and sometimes in great detail. Those who understand what I'm about, and who understand what their own business proposal is about, tend to value that kind of thing pretty highly. And those who either 1) don't understand what I'm about, 2) don't understand what their own business proposal is about, or 3) for any other reason just don't place a high value on the feedback shouldn't be asking for it in the first place.

Call it a market-inspired approach to allocating the limited resource of time. It works.

[EskimoBob]

Deprived makes valid points. Guess what, I get similar PM in my mailbox.

DrGregMulhauser, I stopped reading your article at "...seven figures or more in dollar terms..."
Why? Because I believe that time is ripe for different way of thinking. Governments (big businesses) have done pretty much everything they can to keep small businesses small and small investors away form awesome opportunities.
This is why we have all those "nice" laws that help rich fat fuckers to get even more fatter and richer and "protect" small investors form growing. This way of thinking is nothing short of supporting modern slavery. Lets hope, those days are soon gone for good. This modern variant of feudalism has to go and BTC is just one of the battle axes, that will be driven deep in to the scull of greedy scum, who "rules the world" as w know it. This is nothing new in history and  history has a tendency to repeat itself over and over again.

BTC is a awesome opportunity to change that and help small guy to grow. I do not mean only small business but small time investors too.
"Oh, but they might get screwed by scammers..." rhetorics are BS. Bankers and scammers alike are screwing us all day long and every day. Including you, Mr Mulhauser

You are probably a smart guy. So, help this community to grow up and prosper and not strangle it with your greed.
Invest your precious time to this community and at the end, you will receive way more than those 5 BTC fees, you are actually after.

Lets work out a list on minimal requirements for contracts and so called prospectus. There are lots of good ideas to borrow from RL.

PM? me, if you guys are up to it and how we go about it. Possible, it will be total waste of time but if exchanges join us, we can actually do some good. (a please, get over this "this is not exchanges job in RL" notion of yours ).  

[DrGregMulhauser]

DrGregMulhauser, I stopped reading your article at "...seven figures or more in dollar terms..."

Because you stopped reading, I'm afraid you completely missed the point, and your subsequent comments as a result are entirely orthogonal to that point.

Had you read the remainder of the sentence, you might have understood the context:

"Unless you're running an already well established business with revenues well into seven figures or more in dollar terms, you should expect every prospective investor you approach either to offer you significant feedback or to politely shut the door in your face."

I get that you have an axe to grind. But if you cannot read more than 19 words before jumping to a laughably erroneous conclusion, you should grind your axe on your own, without trying to make me your straw man.

Bankers and scammers alike are screwing us all day long and every day. Including you, Mr Mulhauser

I wonder whether you imagine that ad hominem attacks and personal insults will boost your credibility in the eyes of someone out there, or whether you just find it satisfying to degrade the quality of discussion by denigrating other people?

[EskimoBob]

DrGregMulhauser, I stopped reading your article at "...seven figures or more in dollar terms..."

Because you stopped reading, I'm afraid you completely missed the point, and your subsequent comments as a result are entirely orthogonal to that point.

Had you read the remainder of the sentence, you might have understood the context:

"Unless you're running an already well established business with revenues well into seven figures or more in dollar terms, you should expect every prospective investor you approach either to offer you significant feedback or to politely shut the door in your face."

I get that you have an axe to grind. But if you cannot read more than 19 words before jumping to a laughably erroneous conclusion, you should grind your axe on your own, without trying to make me your straw man.

Bankers and scammers alike are screwing us all day long and every day. Including you, Mr Mulhauser

I wonder whether you imagine that ad hominem attacks and personal insults will boost your credibility in the eyes of someone out there, or whether you just find it satisfying to degrade the quality of discussion by denigrating other people?

LOL, of course I did read. This was just a figure of speech to make my point painfully clear.

BTW, where did you see ad hominem attacks? Are you one of those greedy banker scum, who keeps screwing us all day long?
If so, I am happy it hurts you. If it hurts, this means there is still hope for you to changes no a normal caring person.
Obviously you need to climb down form your high horse  and actually understanding what you assholes have done.

If you are not one of them, move on and lets start working on proposed cheat sheet for the BTC investment community.
Just blabbering here will not help anyone.

[Vexual]

Rather than "ad hominem attacks[sic] and personal insults", I think part of the point Bob is making, is that a certain mindset common to those involved in finance was the very catalyst for the invention of bitcoin.
This aspect of bitcoin should not be discounted.
I think you will find many of the most resourceful people involved in bitcoin ask themselves "is this good for bitcoin?" as a first qualifier.

[EskimoBob]

Rather than "ad hominem attacks[sic] and personal insults", I think part of the point Bob is making, is that a certain mindset common to those involved in finance was the very catalyst for the invention of bitcoin.
This aspect of bitcoin should not be discounted.
I think you will find many of the most resourceful people involved in bitcoin ask themselves "is this good for bitcoin?" as a first qualifier.

Thank you Vexual. You are correct.

[DrGregMulhauser]

It astonishes me that I make the observation that small businesses/startups should ***EXPECT TO RECEIVE SIGNIFICANT FEEDBACK*** when they approach someone about investment -- or, alternatively, should expect to have the door shut in their face if their proposal is severely lacking in quality -- and now somehow I am the "greedy banker scum" up on a "high horse" and among the community of "you assholes". WTF? 

Anyone who spends as much time actually reading what I've written as they spend vomiting intellectual bile across innocent bystanders might realise that not everyone is out to get them, and some people -- shock, horror -- might actually share a great many of their views.

[Vexual]

It astonishes me that I make the observation that small businesses/startups should ***EXPECT TO RECEIVE SIGNIFICANT FEEDBACK*** when they approach someone about investment -- or, alternatively, should expect to have the door shut in their face if their proposal is severely lacking in quality -- and now somehow I am the "greedy banker scum" up on a "high horse" and among the community of "you assholes". WTF?  

Anyone who spends as much time actually reading what I've written as they spend vomiting intellectual bile across innocent bystanders might realise that not everyone is out to get them, and some people -- shock, horror -- might actually share a great many of their views.

thanks for the significant feedback. hypocrite
EDIT-italicised the latin.

[DrGregMulhauser]

thanks for the significant feedback. hypocrite
EDIT-italicised the latin.

At a certain point of incoherence, I just have to step back and leave you to it. Now I'm a hypocrite because...what, exactly...because I articulated a particular point of view and subsequently defended it when someone decided to s*** all over me -- you know, the actual person -- rather than engaging in any meaningful way via an actual argument? Or maybe it's because I used the phrase ad hominem? Yeah, that's a good reason to hurl some more insults.

I sure don't know what on Earth I did to invite such self righteousness and holier-than-thou vitriol, but as I say, I leave you to it.

[DrGregMulhauser]

On reflection, I think an apology is in order.

When EskimoBob stopped reading after 19 words, I came upon phrases like his admonition not to "strangle it with your greed" and "Bankers...screwing us...including you..." and took them as yet another example of the kinds of insults I've had before on this forum, from people who wrongly suppose I have anything whatsoever to do with the banking world.

Now that I read more carefully, however, I realise what Vexual was trying to clear up: although EskimoBob probably did mean to insinuate that I am greedy for not giving away free consultation time, he was not claiming that I was a banker (or a scammer, or out to screw people, etc., etc.).

So, EskimoBob, I do apologise for misunderstanding you. And Vexual, although I didn't follow anything you said after your initial clarification, I do apologise for getting your clarification and peace-making wrong too!

[EskimoBob]

On reflection, I think an apology is in order.

When EskimoBob stopped reading after 19 words, I came upon phrases like his admonition not to "strangle it with your greed" and "Bankers...screwing us...including you..." and took them as yet another example of the kinds of insults I've had before on this forum, from people who wrongly suppose I have anything whatsoever to do with the banking world.

Now that I read more carefully, however, I realise what Vexual was trying to clear up: although EskimoBob probably did mean to insinuate that I am greedy for not giving away free consultation time, he was not claiming that I was a banker (or a scammer, or out to screw people, etc., etc.).

So, EskimoBob, I do apologise for misunderstanding you. And Vexual, although I didn't follow anything you said after your initial clarification, I do apologise for getting your clarification and peace-making wrong too!

No problem. Your slight overreaction puzzled me a bit too and I rechecked, what I wrote. I have to agree, me sentence structure can sometimes be a bit off but not that badly. Lets not dwell on that any longer and move on.
Cheers!

[Deprived]

Very interesting read.

3. If your 'investment' relies on customer volume then you need some evidence (e.g. surveys) to establish you'll get that trade volume.  I have zero interest in yet another gambling site which will do well if it gets 50% market share but has no evidence to suggest it'll even get 1%.

How would you provide that kind of evidence? Any more insights on that matter?

With any investment that involves customers (and competes with existing businesses providing the same/similar service) to get any significant volume requires some mix of two things to happen:

• They increase the total pool of customers.
  They take customers away from existing businesses.

It's for whoever is seeking investment to clearly show how they're going to achieve one or both of the above in some significant volume.  If they haven't put serious effort into making their case for that then they're nowhere near ready to seek investment capital.  Some investments which don't, on the face of it, appear to have customers actually DO.  Examples being mining investments and gambling sites where investors get to be the bank - where the investors ARE the customers (this is distinct from my point 2 - of showing profit for investors - as something being profitable isn't sufficient on its own to get investment if similar but more profitable - or better in other ways - alternatives exist).

Precisely how they make a persuasive case depends very much on the specific proposal.  In my OP I gave the example of surveys - but i'm also amenable to cases which rely more on simple logic ("There's already a proven market and we offer clear advantages X, Y and X over those currently in the space without any significant disadvantages").

The important thing is that they DO make a case - and not just rely on some assumption that "if we build it, he will come".

[EskimoBob]

What I (you too?) are actually asking for, is a description of business model, that actually makes sense.
If someone is asking for coin from BTC community, but can not write it up.... forget it.
If so, I have to agree.

(Here is a simple form from my February post)

* Key activities
(you write your stuff here)

* Key partners
(you write your stuff here)

* Your Key resources
(you write your stuff here)

* What your Cost Structure looks like
(you write your stuff here)

* Revenue stream
(you write your stuff here)

* Your Customer Segments
(you write your stuff here)

* Customer Relationships
(you write your stuff here)

* and Channels (communication obviously)
(you write your stuff here)

*  Value proposition
(you write your stuff here)


For more detailed description (trust me, you need it) please read: http://www.slideshare.net/techdude/business-model-generation

[Deprived]

Here's another approach, which I've sometimes used in various forms in the past (prior to launching the BTC Growth fund) and which is currently posted on the BTC Growth website:

Are You Seeking Investment?

The gist of it is that rather than asking people to interpret my guidelines in advance and to try and decide how they apply to their own cases -- and thereby inevitably creating debates about interpretations and exceptions -- I simply require an up-front fee to cover my time spent reading, evaluating, and providing meaningful feedback.

Those who have received feedback from me know that I take the process seriously, and I give it to them straight and sometimes in great detail. Those who understand what I'm about, and who understand what their own business proposal is about, tend to value that kind of thing pretty highly. And those who either 1) don't understand what I'm about, 2) don't understand what their own business proposal is about, or 3) for any other reason just don't place a high value on the feedback shouldn't be asking for it in the first place.

Call it a market-inspired approach to allocating the limited resource of time. It works.

Certainly that's a valid approach - and squarely addresses the misconception some seem to have that advice is/should be free (your point 3).  And I'd agree with your point that those willing to pay tend to be the more worthy ones anyway - nearly all the decent proposals I'm contacted about mention payment to me in their initial PM.

The reason I haven't gone that route myself is because in some instances there actually can be benefit to me in giving free advice - even though that benefit isn't immediately visible or denominated in BTC.

My hope with this thread was mainly to try to get people putting forward proposals to realise that anyone in a position to help them in any significant manner wants to see far more than a vague concept plus a target amount of BTC to raise.  That hope may well be forlorn - as the worst cases likely don't read anything anyway.

I'm also putting on record that requests that want me to do significant work without even raising the issue of payment are likely to be treated with the same amount of respect that making the request shows to me.  i.e. none.  I don't plan at present to try to charge for every comment I make or for quickly looking over a proposal for any gaping holes.  But if someone wants serious work put into rewriting a prospectus, searching for holes in a plan/contract, verifying projections or whatever then that's rarely going to be free.  And if someone wants my feedback then at least have the decency to have something at a stage where it's ready for feedback.

[Deprived]

I see no mention of existing product. Typically, for something like S.DICE, some of the software development should be done before thinking about raising capital, right?

Depends a bit on the scale of development.

For things where initial development is small (only weeks of work -e.g. S.DICE) then there's no excuse for not having it done.  Where the development is larger - and the fund-raising is FOR the development (e.g. S.MG) then obviously the software development won't be done before raising funds.

One type of 'investment' I won't touch is where the development is small AND there's no developer yet.  There's no reason to waste my time on "I want to run a casino and I need $500 to pay someone to write it".  If they can't develop AND they don't have $500 then they aren't bringing anything to the table. 

"I want to do the same as other people already do but don't have the ability to do it or the cash to pay someone else to do it" is not and never has been a plan.  It's begging.