(...)
Bottomline is that he DOES own more than 60% - dropping to exactly 60% if/when all 40% of public shares are sold. Reason for that is the ownership the shares owned by AMC. Those are owned by whoever owns AMC. Shareholders do NOT own AMC (that's explicit in the contract) so do not any part of those shares. In practical terms, assuming good faith, the actual effective owned percentage of profits is 50% if all public shares are sold.
Thanks for the analysis Deprived.
As a comparison, ASICMINER has a roughly
41/59% profits split (favoring Bitfountain). I didn't find an explicit reference to the "ownership" of ASICMINER.
Introduction
ASICMINER is a virtual identity totally held by investors of the Bitfountain company. The Bitfountain company's business includes mining with self-built ASIC devices, as well as the sales of them. Currently ASICMINER shareholders holds 163,962 shares, while Bitfountain shareholders holds 236,038 shares. ASICMINER shares have the privilege of getting all net profits till 0.1BTC/share from the day when dividends began to be paid. They also have the exemption of dilution, which means that each ASICMINER share always equals to 1/400,000 of the total profits and voting power of the summed value from both ASICMINER and Bitfountain.
(...)
It has to do with the voting power. 1 ASICminer is entitled to 1/400 000 of the voting power while 1 AMC share isn't entitled to anything except profit.
The number of shares owned by AMC isn't the issue. Investors should be wary about the lack of transparency. If the investors are providing 100 % funding, which seems likely seeing that the amount of hardware bought is proportional to the number of shares sold, in no way should they be entitled to only 1/40 000 000 of the profit per share in the first year or 1/100 000 000 of the profit afterwards. In no way are the founders providing any benefit to AMC.
This is in no way the same as ASICsminer:
How much has Bitfountain already invested, to give it right to 50% of shares?
Thanks for your question. Bitfountain has already invested 10k$ for the labor cost and EDA tools fee of physical design.
We ourselves made the logic-level design, tuning, and optimization so this part is almost free. We also keep another 15k$ or
so as a reserve for unexpected scenarios, but un-spent yet.
Of course the amount invested buy ourselves is much smaller compared to what we want to raise. Therefore it
resembles to the model that we become the 50% shareholder by contribution of mostly actual execution and technology factor.
Pricing of investment in venture business is always hard. Some would say 50% is unfair to the investors, because they
take almost all the risk. While others would say 50% is too high, since many angels provide all money for a startup to
bootstrapping out of it's infancy while only take 10-20%. But the greatest thing about market is that people vote with
their own stake, therefore the market cap of ASICMINER will tell us whether it's under- or over-priced in the next months
to come.
I'm still baffled at the reason for splitting VMC and AMC into two separated entities other than maximizing the profit for the founders while maximizing the risk for early investors.
Stoasis
Edit: added text about ASICminer
