We are planning on launching a project that (hopefully) will have enough hashing power to bring in over $1m per month. We're in the final stages but are running low on cash, we are considering an IPO. My questions are the following:
1) What would a "fair" valuation of a company that is pulling in $1m/mo. One of the problems I have with finding value is the volatility of the coin prices. Our mining will be strictly alt-coin, which is considerably more unstable than bitcoin.
2) What is a fair ROI for investors?
3) Considering the lack of trust in the securities exchanges, would a direct-share offering deter investors from buying shares?
Any and all feedback would be very appreciative.
P.S. I am moderating this thread because it seems some people troll particularly HARD on this forum.
Just to clarify - do you mean you're in the final stages of getting the farm running, or in the final stages of preparing a 25 page PDF?
The reason I ask is that I have a fairly large scope of experience and knowledge when it comes to altcoin mining. I have mined altcoins "professionally", if such a term could be applied, since the beginning of 2012, and I have a LOT of historical data (earnings, exchange data from now-defunct exchanges, difficulty changes, pump-and-dumps, etc.)
Based on that I can tell you that $10k worth of equipment will net $600 - $2000 in a month before electricity if you are particularly clever at guessing which altcoins to preemptively mine and have written the tools to segment and route portions of your farm. Electricity on that is a pretty static $400 if you aren't in the US (or if you are in the US and have negotiated with your power company). Overheads (replacements, salaries, rent, etc.) are about $100 on top of that. That means that a GPU mining operation can make, pretty statically, $100 - $1500. The good months are few and far between, so we can average that out to $700 profit a month over a year (again, assuming you're particularly good at tooling up by writing your own python or whatever to switch segments over to profitable coins, bearing in mind that profit is a product of trade value more than a product of difficulty and available hashrate) and a gross revenue of ~$1300 a month.
Those amounts are all averaged out for auto-switching between different altcoins, holding and trading on necessity only, and for rapidly changing difficulty / block rewards.
Thus on a proposed gross revenue of $1 million monthly your electricity cost will be ~$308 000, which is the amount of electricity a factory uses. Your capex to meet that revenue will be around $7.7 million. If your claimed amount of "$1 million a month" is net profit...well...then the capex you're looking to spend is $14.3 million.
You should not be asking about fair value, it's the wrong question. You should be proving yourself to investors
first, and then saying "this is how we want to raise funds" to get input from them.