Updates will be posted in due course over at the main thread:
https://bitcointalksearch.org/topic/btc-tc-btc-growth-capital-growth-via-hedge-fund-style-investing-266828
Topic: [BTC-TC] IPO Details for BTC-GROWTH (Read 6457 times)
How's it going DrGreg?
Doubled our money yet
Doubled our money yet
As of a few minutes ago, the final shares from the initial tranche have been allocated. It took around 30 hours for the 20,000 shares to go.
Because only a relatively very small proportion of that activity took place during today's business day (UK time), however, I believe the initial demand for the fund has been adequately met, and therefore we won't plan to release any further tranches at this time. As described in the fund's listing documents, however, we may do so in future, should the fund begin to trade at a premium to the most recently published NAV.
Many thanks to all who participated!
Because only a relatively very small proportion of that activity took place during today's business day (UK time), however, I believe the initial demand for the fund has been adequately met, and therefore we won't plan to release any further tranches at this time. As described in the fund's listing documents, however, we may do so in future, should the fund begin to trade at a premium to the most recently published NAV.
Many thanks to all who participated!
So this means we instantly lose 2% of our investment?
No, this means the fund instantly loses 0.2% -- not 2% -- from capital received. The exchange does not conduct transactions for free; that means it is not possible to issue shares and receive exactly the same amount as participants pay for them.
As indicated in the fund's listing documents, potential participants should ensure that they are familiar with the rules of the exchange; this includes being aware that the exchange levies charges on transactions.
Note that we are talking about a sum total of 3.6 BTC out of 1800 BTC (1800 times 0.002 = 3.6).
The value of each share is determined by the value of the fund...
Also are you paying yourself a wage from the fund? Meaning that if the fund maintains its base value we will lose value due to your wages...
Also are you paying yourself a wage from the fund? Meaning that if the fund maintains its base value we will lose value due to your wages...
Please see the listing documents for full details. Please do not participate in the fund without reading the listing documents.
For more discussion on the basics of the fund, you're very welcome to stop by the main discussion thread for the fund (linked from the OP); this thread is intended to be about the mechanics of the initial offering.
During the first 24 hours of the initial offering which began Thursday at 1 pm, the BTC Growth fund reached around 1800 BTC in capitalisation.
It looks like the initial tranche of shares is sufficient to satisfy demand, as the capitalisation is now creeping upward only a little at a time. If any shares remain in the initial offering tranche as of Saturday morning (UK time), I'll plan to cancel that open ask order so as to enable any current participants who wish to exit their position to do so without that lingering ask in place.
To clarify, the NAV per share of the fund immediately subsequent to the initial offering is .1 BTC minus the .2% fee which the exchange charges to distribute them, or .0998 BTC. That NAV per share will not be affected by any further distribution of shares from the initial tranche, since each new share taken up would add exactly the same amount of capital to the fund.
It looks like the initial tranche of shares is sufficient to satisfy demand, as the capitalisation is now creeping upward only a little at a time. If any shares remain in the initial offering tranche as of Saturday morning (UK time), I'll plan to cancel that open ask order so as to enable any current participants who wish to exit their position to do so without that lingering ask in place.
To clarify, the NAV per share of the fund immediately subsequent to the initial offering is .1 BTC minus the .2% fee which the exchange charges to distribute them, or .0998 BTC. That NAV per share will not be affected by any further distribution of shares from the initial tranche, since each new share taken up would add exactly the same amount of capital to the fund.
So this means we instantly lose 2% of our investment?
The value of each share is determined by the value of the fund. How will you update the current value? Via the website perhaps?
This essentially gives you 100% control over the share value. If you say each share is now worth 0.5 then who are the shareholders to argue.
How long until the fund will increase enough to cover this instant 2% loss. Also are you paying yourself a wage from the fund? Meaning that if the fund maintains its base value we will lose value due to your wages?
Thanks for clarifying.
During the first 24 hours of the initial offering which began Thursday at 1 pm, the BTC Growth fund reached around 1800 BTC in capitalisation.
It looks like the initial tranche of shares is sufficient to satisfy demand, as the capitalisation is now creeping upward only a little at a time. If any shares remain in the initial offering tranche as of Saturday morning (UK time), I'll plan to cancel that open ask order so as to enable any current participants who wish to exit their position to do so without that lingering ask in place.
To clarify, the NAV per share of the fund immediately subsequent to the initial offering is .1 BTC minus the .2% fee which the exchange charges to distribute them, or .0998 BTC. That NAV per share will not be affected by any further distribution of shares from the initial tranche, since each new share taken up would add exactly the same amount of capital to the fund.
It looks like the initial tranche of shares is sufficient to satisfy demand, as the capitalisation is now creeping upward only a little at a time. If any shares remain in the initial offering tranche as of Saturday morning (UK time), I'll plan to cancel that open ask order so as to enable any current participants who wish to exit their position to do so without that lingering ask in place.
To clarify, the NAV per share of the fund immediately subsequent to the initial offering is .1 BTC minus the .2% fee which the exchange charges to distribute them, or .0998 BTC. That NAV per share will not be affected by any further distribution of shares from the initial tranche, since each new share taken up would add exactly the same amount of capital to the fund.
I believe it is self-evident that it will be divided by outstanding shares as it is not a sale of rights to profit in a company but a fund.
Edit: Apparently there simply isn't any dividends.
Edit: Apparently there simply isn't any dividends.
Yes, the fund focuses on capital growth, not current income. (For folks especially interested in this, there's a brief note in the fund's main discussion thread about fixating on dividends at the cost of total return: it is, after all, trivially easy to pay a large dividend simply by destroying book value.)
The point about shares outstanding is important -- even if we're not talking specifically about dividends. As per the section headed "Capital Structure and Voting Rights", it's the number of shares outstanding that matters for calculation of net asset value per share.
Quote
Q: Why won't the fund pay dividends?
A: The objective of the fund is to achieve capital growth denominated in Bitcoins, not current income. Potential participants who require current income rather than capital growth should not participate in the fund. Obviously this does not mean the fund will not invest in other businesses which do pay dividends, since it is the total return of portfolio investments that matters to the fund's NAV.
A: The objective of the fund is to achieve capital growth denominated in Bitcoins, not current income. Potential participants who require current income rather than capital growth should not participate in the fund. Obviously this does not mean the fund will not invest in other businesses which do pay dividends, since it is the total return of portfolio investments that matters to the fund's NAV.
Guess I need to research what this NAV thing means.
Quote
Q: Why won't the fund pay dividends?
A: The objective of the fund is to achieve capital growth denominated in Bitcoins, not current income. Potential participants who require current income rather than capital growth should not participate in the fund. Obviously this does not mean the fund will not invest in other businesses which do pay dividends, since it is the total return of portfolio investments that matters to the fund's NAV.
A: The objective of the fund is to achieve capital growth denominated in Bitcoins, not current income. Potential participants who require current income rather than capital growth should not participate in the fund. Obviously this does not mean the fund will not invest in other businesses which do pay dividends, since it is the total return of portfolio investments that matters to the fund's NAV.
Are the dividends divided by outstanding shares or 1 million?
I believe it is self-evident that it will be divided by outstanding shares as it is not a sale of rights to profit in a company but a fund.
Edit: Apparently there simply isn't any dividends.
Are the dividends divided by outstanding shares or 1 million?
I really dont seem to see it, can you say exactly how many shares will be issued at .1? You say there are more batches coming yes?
Yes, if necessary I can release further shares at .1 BTC so that folks who would like to participate will have an opportunity to do so. But I cannot say exactly how many shares will be issued at .1 BTC, as I don't know yet know what demand will be. Judging by the activity so far today, I would guess that the initial tranche will be sufficient, although I might wake up tomorrow and see differently.
I certainly didn't mean to make this confusing, so let me take a different stab at clarifying. Since we're not selling equity in an existing business but are instead raising capital that will be invested, the initial number of shares and the initial price per share don't make much difference to anything. Just for the sake of argument, if we had provided 100 shares at a price of 1000 BTC each, the net asset value per share at the end of the exercise would have been approximately 1000 BTC (less .2% for the fees the exchange charges to sell them). If we released another 100 shares at a price of 1000 BTC each, the net asset value per share would still be approximately 1000 BTC. The same holds true regardless of the number of shares and regardless of the price per share: make it a zillion shares at .000001 each, or whatever you like, but however you blend the numbers, the net asset value per share at the end is always going to equal (almost) the original offering price.
Later on, when the net asset value of the shares changes, due to changes in the fund's underlying holdings, it is possible that shares will trade at a premium or a discount to net asset value. As explained in the section on subscriptions and redemptions, if the former happens, we can release additional shares at slightly above NAV to meet demand, and if the latter happens, we can re-absorb shares at a slight discount to NAV to provide additional liquidity for people who would like to exit their position. This keeps future subscriptions and redemptions so they have a neutral to slightly positive effect on NAV per share, ensuring that existing participants' interest is not diluted.
Ha, I had to read it 3 times... Obviously we're not that bright.
If I understand correctly, there is not "limit" of available shares (well, 1.000.000 but @ 0.1BTC they won't be sold in the foreseeable future - and they are not meant to).
There should always be available shares, and once a month DrGregMulhauser would be adjusting the sell price depending on how well (or how bad) the investments went.
As for dividends, he uses the 'two and twenty' structure explained under Management and Performance Fees
I think I more or less understand, but didn't really do my homework as I m not investing (for now) in this IPO.
DrGregMulhauser, could you maybe give us an example? let's say, you were to sell 10.000 shares and get 1000BTC. You would then invest these and get 10% profit in the first month. What would then happen regarding the share prices you are offering? and dividends?
(Sorry if I misunderstood and gave a false explanation. Don't take my word on this)
If I understand correctly, there is not "limit" of available shares (well, 1.000.000 but @ 0.1BTC they won't be sold in the foreseeable future - and they are not meant to).
There should always be available shares, and once a month DrGregMulhauser would be adjusting the sell price depending on how well (or how bad) the investments went.
As for dividends, he uses the 'two and twenty' structure explained under Management and Performance Fees
Quote
Management and Performance Fees
In line with common hedge fund practice designed to incentivize performance, this fund employs the well known 'two and twenty' structure, whereby the fund issuer will receive an annual management fee of 2% of assets under management and participants share 20% of fund profits with the issuer as a performance fee. Fees will be calculated monthly, with the annual management fee applied on a pro-rata basis; effectively, this translates to 0.17% per month.
For illustrative purposes, the two and twenty structure means that if the per unit NAV of the fund increases by 30%, participants will share 6% in absolute terms (20% of 30% in relative terms) with the fund issuer, while retaining 24% in absolute terms (80% of 30% in relative terms) for themselves. This performance fee is constrained by a rolling high-water mark, which will be tallied on a trailing three-month basis. The high-water constraint means that no performance fee will be paid should the fund's NAV before management fees fail to attain at least its previous highest level reached in any of the preceding three months. The high-water mechanism is intended to ensure that the fund issuer does not profit from simply losing value and then regaining that value.
In line with common hedge fund practice designed to incentivize performance, this fund employs the well known 'two and twenty' structure, whereby the fund issuer will receive an annual management fee of 2% of assets under management and participants share 20% of fund profits with the issuer as a performance fee. Fees will be calculated monthly, with the annual management fee applied on a pro-rata basis; effectively, this translates to 0.17% per month.
For illustrative purposes, the two and twenty structure means that if the per unit NAV of the fund increases by 30%, participants will share 6% in absolute terms (20% of 30% in relative terms) with the fund issuer, while retaining 24% in absolute terms (80% of 30% in relative terms) for themselves. This performance fee is constrained by a rolling high-water mark, which will be tallied on a trailing three-month basis. The high-water constraint means that no performance fee will be paid should the fund's NAV before management fees fail to attain at least its previous highest level reached in any of the preceding three months. The high-water mechanism is intended to ensure that the fund issuer does not profit from simply losing value and then regaining that value.
I think I more or less understand, but didn't really do my homework as I m not investing (for now) in this IPO.
DrGregMulhauser, could you maybe give us an example? let's say, you were to sell 10.000 shares and get 1000BTC. You would then invest these and get 10% profit in the first month. What would then happen regarding the share prices you are offering? and dividends?
(Sorry if I misunderstood and gave a false explanation. Don't take my word on this)
I really dont seem to see it, can you say exactly how many shares will be issued at .1? You say there are more batches coming yes?
I read the details on your IPO, and its very well written. So well written that alot of it goes over my head.
I read the details on your IPO, and its very well written. So well written that alot of it goes over my head.
Wondering the same!
I really dont seem to see it, can you say exactly how many shares will be issued at .1? You say there are more batches coming yes?
I read the details on your IPO, and its very well written. So well written that alot of it goes over my head.
I read the details on your IPO, and its very well written. So well written that alot of it goes over my head.
I understand that some folks don't trust the woman who runs Ciphermine to have been diligent in her verification of my identity on BTC-TC -- she is easily verified as the moderator who left the note to that effect at the top of the listing documents -- but they would trust an indication on Mulhauser.net that BTCGrowth.com is run by the same person. I have now updated the front page of Mulhauser.net to include a link to BTCGrowth.com.
If anyone believes that I am not in control of my own server -- for example, that a web admin of some sort is posing as me without my knowledge -- please check the site CodedMemes.com for historical posts about when the server was originally set up, by me.
If anyone believes that I am not in control of my own server -- for example, that a web admin of some sort is posing as me without my knowledge -- please check the site CodedMemes.com for historical posts about when the server was originally set up, by me.
BTCT.co moderators are in no way official/trusted by the exchange. They are merely shareholders of the exchange.
The host IP being the same for btcgrowth.com as the other websites is the best proof of identity available currently, as far as I'm concerned.
The host IP being the same for btcgrowth.com as the other websites is the best proof of identity available currently, as far as I'm concerned.
My point about demonstrating my identity to the exchange or to forum admins was merely that I do not wish to respond to a potential mass of up to 130,000 separate requests from every user on the forum who wants to know whether it's really me because they don't want to take anyone else's word for it. I'm happy to do it a few times as required to establish that it's really me here on the forum, or really me on the exchange, but ad hoc arrangements for each individual who asks? Definitely not.
You can ask John K. as far as trust goes he's the most trusted person IMO.
https://bitcointalksearch.org/user/john-john-k-31288
He does escrow for us but I'd trust him to verify your identity.
You have to understand that there is too much con-artists borrowing the identity of respectable persons to conduct scams. It's fine if you don't wish to provide your ID, but having a forum/exchange mod confirm it would be necessary.
Look at the "Moderator Votes" section at https://btct.co/security/BTC-GROWTH
The only barrier to entry in becoming a moderator is capital. The moderators have not been chosen because they are any more trustworthy than any other individuals. It's a bought position, and this should be kept in mind whenever someone attempts to use moderator status to lend legitimacy to any 'proof' they raise. Namworld's investigation to find that the BTCGrowth website is hosted on the same IP and utilizes the same service providers is more proof of identity than the word of an exchange moderator. Now, if it was the exchange administrator , burnside, who had instead verified his identity, then I'd have accepted this, or some confirmation posting on the long-standing blog for the man instead of a newly created website.
BTCT.co moderators are in no way official/trusted by the exchange. They are merely shareholders of the exchange.
The host IP being the same for btcgrowth.com as the other websites is the best proof of identity available currently, as far as I'm concerned.
The host IP being the same for btcgrowth.com as the other websites is the best proof of identity available currently, as far as I'm concerned.
My point about demonstrating my identity to the exchange or to forum admins was merely that I do not wish to respond to a potential mass of up to 130,000 separate requests from every user on the forum who wants to know whether it's really me because they don't want to take anyone else's word for it. I'm happy to do it a few times as required to establish that it's really me here on the forum, or really me on the exchange, but ad hoc arrangements for each individual who asks? Definitely not.
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