Topic: [CRYPTOSTOCKS] Vircurex [VCX] - Going public - page 6. (Read 15449 times)

The chain of arguments is getting too complicated, lets me "streamline it":
I am forming a company (Vircurex Ltx?) which will acquire the current trading platform and its business from its current owner (for 1500BTC). I am offering to sell 30% of the company shares to the public (Face value being sold 3375BTC). 70% I will be holding. For the first one year, I will not be collecting any dividends, all of those go to the 30% shareholders.

As for the valuation 30%/70%/3375BTC:  As with any startup, the valuation of the company depends very much on its the outlook of its future business. And that is something each and every investor needs to judge by himself.


Each exchange is focusing on different services, both quoted exchanges are primarily focusing on BTC trading which of course Vircurex is providing too in addition to the other virtual currencies (currently only Bitcoin deviates, but I am also looking into Lindens) which in its depth is unique on the market.


On the asset side we have:
 - Domain name
 - License for the platform
 - 4700 registered users, 2020 who have logged on in the last 3 months, 1060 who have logged on in the last 4 weeks, 880 who have a BTC balance on their account.

Let me reiterate, the vision is to create a fully transparent community driven exchange supporting Bitcoins, the Alts and possibly other virtual currencies. I'll be publishing all details of the monthly expenses and revenues on the Vircurex's page.

But like with any other investment, don't invest what you can't afford to loose.  If you are not planning to invest (yet) then support the continuous Alt-Chain exchange platform buying a share or two.

he already did?!

It seems like you want other people to come up with 100% of the funds and you take 70% for free.

Are you putting in any money at all ?

Also, where are the historical accounts?  Your post makes reference to current growth - but you appear to have forgotten to add the link to the records demonstrating that growth.

I assume the current assets/liabilities are also detailed at the link you forgot to add.

Quite.

If the 1500 BTC is to buy the licences/software/right to run the exchange etc - then what are your 70% of shares in return for?  70% of profits AND equity seems a lot for a management fee.

The only thing that's not either common or ever heard of is for the seller to then use the proceeds of his sale to buy the company presents.

Either it's a sale by the owner, in which case the resulting 45k x 0.25 x .3 = 3,375 BTC is yours to keep and does not get piped back into Vircurex, or it's a mutual subscription thing, in which case however many shares sell constitute 100% of the company and if you want 70% you'd better bring 7,875 BTC - in cash. In this latter case the share sale proceeds, whatever they may be, are to be used by Vircurex and only by Vircurex.

The Global Scam Exchange reference is due to the apparent confusion between those two distinct and immiscible modes of operation. On GLBSE people did a blend of both, resulting in such splendor as DMC etc.

In any event, the only point that still needs addressing is, to quote the link before,


So, short sweet and to the point: why do you think you can compete with MtGox and Bitcoin-central on an ongoing basis? Note that you wanting to compete is not a good enough reason, and neither is competition being in general a good thing much of a reason - this is business. Absent an excellent answer to that question, it would probably be wiser to close the thing now while it's relatively painless to do rather than close it in six to sixteen months and leave behind a shitstorm. No matter how attractive a coupla k BTC may seem in the present tense.

Some clarifications on the questions:

1500BTC license / business transfer:
The onetime fee/investment of the business to acquire a license to use Vircurex as well as handover the platform with all data, and yes, Vircurex is currently privtely owned by myself. This listing is about transforming this venture to the next level.

30% /  70%  Share Ownership:
I am selling 30% of the shares to the public, thus 70% remain my property which I intend to keep. Not sure what the reference to GLBSE is about, but this is a common approach for many startups, you issue shares for a fraction of your enterprise, while retaining control by holding the majority of the shares. With myself being a major shareholder, I will naturally take all decisions in the best interest of the company.

Costs:
The states costs of 1575BTC over 3 years is the upper limit I foresee, assuming that the Exchange develops within the foreseen parameters. Should it go beyond our expectations then the increased revenue will be managed to pay for the increase hosting costs. A large scale of the costs are fixed costs (server hosting, yearly fee for up-keeping a legal entity, SSL certificates, eMail service, remote site backup service, etc.).  The calculations were made based on a BTC price of 20USD.

Business development:
Obviously the 11BTC will not suffice to run a full blown legal entity, hence various plans are in the working:
a) Incorporating Vircurex: We cannot deal with payment processors (e.g. BitInstant) as of today because their prerequisite is a legal entity.
b) Expanding funding options beyond our current options (e.g. Liberty Reserve, BitInstant, etc.)
c) Marketing /Ads, thus the budget for that
d) Expanding the supported currencies, again here a) is important
These are just to name a few.

As stated, a breakeven is at ~170 BTC trading volume per day, I believe that to be a reachable target long before the 3 years.

Interesting stuff!


Is that current owner you or some other arrangement?


What happens to the other 70%?

I think you may be confusing things. Are you doing an MPEx style IPO where the owner sells some of his own shares (in which case you're not required to say what you'll do with your own money, and also it's not natural or sensible to spend it on the company)? As it is phrased this sounds a lot like the GLBSE style IPO.


What happens if fixed costs increase significantly during that 3 year timeframe?


So tentatively 0.1% return per month, if indeed operation was costless. If operation costs 1,575 BTC over 3 years that comes to ~45 BTC a month, which would mean this is currently bleeding. Along those lines, much more detailed discussion of how you plan to turn around the enterprise may be a good idea (or why you even think there's any chance of such, for that matter).

Note:
This listing will only become effective if at least 10,000 shares are sold. If the 10,000 shares are not sold by 28th February 2013 then all shares will be purchased back at the face value of 0.25 BTC per share and this contract will be null and void.

Overview
Vircurex is a privately owned trading platform for virtual currencies, it supports buying and selling of Bitcoins and many of its derivatives. The platform offers:
 - trading (buying/selling)
 - underwriting options
 - coupons
 - full trading API

Virtual currencies can be purchased using Euro or USD. Additional currencies are planned.

Objectives of the listing
To facilitate the further development of the platform, ensure ongoing operation as well as constantly enhance the functionality we decided to raise capital by selling 30% of our equity.

Some plans - but not limited to - are:
 - incorporation of Vircurex,
 - integrating other payment processors
 - advertisement campaigns
 - infrastructure upgrades

The Listing
A total of 45,000 shares at a face value of 0.25BTC each will be issued. 30% of these will be made publicly available.
If all shares are sold, 3,375 BTC will be divided into
   1,500 BTC onetime payment to license the platform and transfer the ownership of the complete infrastructure from its current owner
        300 BTC for advertisement costs over the next 3 years
   1,575 BTC to cover all operational costs over the next 3 years

Investment / Assets / Licenses
The listed security (and subsequently the legally incorporated entity) will
- own the source code, its customer base as well as wallet balances
- own the domain name

Operation costs / Revenue / Profit
Current monthly revenue from trading activities as well as advertisements is ~11 BTC.
The security listings proceedings will cover all operational expenses for the period of 3 years, hence all revenues will be net profit and paid out as dividends during that period.

Dividend
The monthly net profit will be paid out as dividend, typically in the first week of the month. All issued shares are entitled to the dividend payment.

Currency Exchange Risks
All expenses are paid in USD, thus to limit the possible risk of currency fluctuations, all proceedings from the listing will be converted to USD immediately. The funds will be held in a bank account and will not be used for anything other than paying the operational costs of the platform.

Share Buyback
The security issuer has the right to buy back the shares at 25% above the 30 day average trading price.

Special conditions
The security issuer will not be entitled to dividends for a period of 12 months after the listing.

Forward Looking Statement
Next 12 Months
Assuming a current 11 BTC monthly revenue and a quarter on quarter growth rate of 10% then the security will offer a 4% to 5% dividend yield. We believe a 10% growth quarter on quarter is a conservative number, in addition, most operational costs are fixed costs, hence any further growth will reflect in an over proportional increase of the dividend yield.

After 3 years
The trading platform will have to generate sufficient revenue to for it to continue its operation beyond 3 years. With the average monthly operations costs of 50BTC and the current trading fee of 0.5%, the exchange will require a daily trading volume of ~170BTC to break even.

Communication and Publications
All important announcements will be made on
 - the exchange that Vircurex will be listed on
 - bitcointalk.org

The list is subject to change depending on the development of the various forums.

Risks
You must consider this investment a high risk investment with a high probability that the expected returns will not materialize or even a total loss if the investment. Operating a virtual currency trading platform incurs the risks of:
- double spend attacks on weak virtual currencies
- security breaches (e.g. 0 Day vulnerabilities)
- legal actions by governments against our service offering
- availability of key personnel to operate the platform
- continuation of the virtual currency networks (blockchains)

Each potential investor need to consult with their financial advisor as to whether or not this investment is suitable for their specific risk profile.

Link to the listing on Cryptostocks.com:  https://cryptostocks.com/securities/34