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Offline matt608

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IPO in a box - questions
« on: March 20, 2015, 05:09:27 PM »

The soon to arrive UIA features will allow whitelisting and recall of UIAs which will allow companies to legally IPO on BitShares saving them huge costs associated with traditional IPOs.  This feature could be more useful than BitAssets, which this stage are limited by low liquidity and lack of gateways.  IPO in a box is an in demand service and its birth may call for a change of marketing strategy. 

Questions (some are quite specific, others open for general discussion):

1.  To buy shares in an IPO people need their identity verified.  Who will do the identify verification?  (itnom from moonstone mentioned on mumble they are looking being an identity verifier, is that for IPO whitelisting purposes and what's the ETA?).
2.  In the US do you need to be an 'accredited investor' or can anyone buy in providing they are verified?
2.  Is an animated explainer video for the IPO feature (directed at businesses) of more value than an animated explainer for BitAssets?
3.  Should IPOs on BitShares be the focus of marketing, moving BitShares into a B2B service, away from targeting the consumer with BitAssets?
4.  How do investors buy issued shares directly with fiat?  Will this feature also be limited by onramps?  (the income from the IPO is from the short-name UIA registration fee, so buying directly with fiat by passing BitAssets is ok, the DAC still makes a profit).
5.  As shares will only be able to be purchased by verified buyers, after purchase can the shares only be re-sold to other verified buyers or can the verified buyers sell them to anyone? 
6.  Is it the share that is whitelisted after selling to a verified buyer (giving freedom to be re-sold to anyone) or the buyers account that is whitelisted? (allowing transfers only to other whitelisted accounts).
7.  DACx is functioning as an identity verification service for China, could it expand to allow identity verification from the US + elsewhere? 
8.  How does this work internationally?  If a UK company wanted to IPO in BitShares, who will do their investor identity verification?  The more countries the investor pool can be drawn from the better (more IPOs will happen on BitShares if more investors can take part, due to the proposition then being more attractive to businesses).
8.  Aren't dividends a required feature for this to be useful at all?  When will that be implemented?
10.  Who will consult with the business clients? 
11.  The whole process needs to be streamlined and intuitive for businesses doing an IPO and for investors.  Is there a IPO primer document for businesses?
12.  What else needs to be ready for IPO's on BitShares be ready to be marketed (B2B)? (e.g. gateways, identity verification services, dividends feature, web-wallet market activation, primer doc?)
13.  Which other cryptos can do this?

Edit:  Adding another:
14.  Should actual IPOs have a separate (and higher) UIA fee?  There is an identity verification cost with the service provided to them which is not present in other UIAs, so perhaps the other short letter UIA issuers should be charged less and a new fee introduced for those that do official IPOs with compliance features?
« Last Edit: March 20, 2015, 09:50:01 PM by matt608 »

Offline xeroc

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Re: IPO in a box - questions
« Reply #1 on: March 20, 2015, 05:26:42 PM »
14. Will I be able to pay tx fee in that asste? Or how wouls ypu implememt tx fees such that holders of the IPO asset do not need to buy into BTS to sell their stake again?
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Offline btswildpig

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Re: IPO in a box - questions
« Reply #2 on: March 20, 2015, 05:28:40 PM »
whoever can provide you with 100% correct answer may want to charge you with 500USD / hour   :P :P
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Offline Pheonike

Re: IPO in a box - questions
« Reply #3 on: March 20, 2015, 05:35:01 PM »
Just in general I don't you can do this in the US without being an accredited investor yet. At least in a stock type scenario. I think it would have to modeled initially like a  KickStarter style crowd fund. Of course  I am not an expert.

Offline Pheonike

Re: IPO in a box - questions
« Reply #4 on: March 20, 2015, 05:43:25 PM »
I just of this, but wouldn't BitShares be a perfect tool for  Political Action Committees here in the US.?? It can used to track donations to campaigns!

http://en.wikipedia.org/wiki/Political_action_committee

Offline BunkerChain Labs

Re: IPO in a box - questions
« Reply #5 on: March 20, 2015, 07:26:00 PM »
The soon to arrive UIA features will allow whitelisting and recall of UIAs which will allow companies to legally IPO on BitShares saving them huge costs associated with traditional IPOs.  This feature could be more useful than BitAssets, which this stage are limited by low liquidity and lack of gateways.  IPO in a box is an in demand service and its birth may call for a change of marketing strategy. 

Questions (some are quite specific, others open for general discussion):

1.  To buy shares in an IPO people need their identity verified.  Who will do the identify verification?  (itnom from moonstone mentioned on mumble they are looking being an identity verifier, is that for IPO whitelisting purposes and what's the ETA?).
2.  In the US do you need to be an 'accredited investor' or can anyone buy in providing they are verified?
2.  Is an animated explainer video for the IPO feature (directed at businesses) of more value than an animated explainer for BitAssets?
3.  Should IPOs on BitShares be the focus of marketing, moving BitShares into a B2B service, away from targeting the consumer with BitAssets?
4.  How do investors buy issued shares directly with fiat?  Will this feature also be limited by onramps?  (the income from the IPO is from the short-name UIA registration fee, so buying directly with fiat by passing BitAssets is ok, the DAC still makes a profit).
5.  As shares will only be able to be purchased by verified buyers, after purchase can the shares only be re-sold to other verified buyers or can the verified buyers sell them to anyone? 
6.  Is it the share that is whitelisted after selling to a verified buyer (giving freedom to be re-sold to anyone) or the buyers account that is whitelisted? (allowing transfers only to other whitelisted accounts).
7.  DACx is functioning as an identity verification service for China, could it expand to allow identity verification from the US + elsewhere? 
8.  How does this work internationally?  If a UK company wanted to IPO in BitShares, who will do their investor identity verification?  The more countries the investor pool can be drawn from the better (more IPOs will happen on BitShares if more investors can take part, due to the proposition then being more attractive to businesses).
8.  Aren't dividends a required feature for this to be useful at all?  When will that be implemented?
10.  Who will consult with the business clients? 
11.  The whole process needs to be streamlined and intuitive for businesses doing an IPO and for investors.  Is there a IPO primer document for businesses?
12.  What else needs to be ready for IPO's on BitShares be ready to be marketed (B2B)? (e.g. gateways, identity verification services, dividends feature, web-wallet market activation, primer doc?)
13.  Which other cryptos can do this?

You are venturing into an area that I have spent months deciphering on my own for BunkerShares.

To give you the short general answer.. it doesn't matter if it's decentralized.. a security is a security.. and if you are going to sell securities, TO Americans or as an American.. you need to be registered with the SEC. That registration process costs tens of thousands of dollars.. there have been several cases of people who used bitcoin in similar manner and are now paying the price. Not even just big operations either, they have gone after small outfits just the same.

This isn't just about the US either.. pretty much any western country with trading/financial laws will have similar standards.

The UIAs and those management features while they are wide open now, are meant for big companies to utilize for that purpose.

Regarding your dividen question.. this is usually done only by mature older companies, not new startups.. therefore not really a necessity as we are not likely to have the likes of Nike and IBM using Bitshares UIA anytime soon. :)

So with all that said.. I would say UIAs in the upcoming version are really going to pose some interesting questions for everyone in terms of how they are used in a 'safe' way.

For this reason.. I have choosen not to treat UIAs as a security, but rather as a type of token.. kinda like what Chucky Cheese Pizza has done for many years already..



By creating this internal currency you can do some interesting things depending on your offering.

I am nearly ready to run with BunkerShares.. when it's all over I hope to put together a sort of case study for UIA and what kinds of things are needed, what challenges I faced and all that fun stuff. After that I might be better suited to answer more of your questions. These are just some of what I have found so far..
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Offline cube

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Re: IPO in a box - questions
« Reply #6 on: March 21, 2015, 05:04:38 AM »
The soon to arrive UIA features will allow whitelisting and recall of UIAs which will allow companies to legally IPO on BitShares saving them huge costs associated with traditional IPOs.  This feature could be more useful than BitAssets, which this stage are limited by low liquidity and lack of gateways.  IPO in a box is an in demand service and its birth may call for a change of marketing strategy. 

Questions (some are quite specific, others open for general discussion):

1.  To buy shares in an IPO people need their identity verified.  Who will do the identify verification?  (itnom from moonstone mentioned on mumble they are looking being an identity verifier, is that for IPO whitelisting purposes and what's the ETA?).
2.  In the US do you need to be an 'accredited investor' or can anyone buy in providing they are verified?
2.  Is an animated explainer video for the IPO feature (directed at businesses) of more value than an animated explainer for BitAssets?
3.  Should IPOs on BitShares be the focus of marketing, moving BitShares into a B2B service, away from targeting the consumer with BitAssets?
4.  How do investors buy issued shares directly with fiat?  Will this feature also be limited by onramps?  (the income from the IPO is from the short-name UIA registration fee, so buying directly with fiat by passing BitAssets is ok, the DAC still makes a profit).
5.  As shares will only be able to be purchased by verified buyers, after purchase can the shares only be re-sold to other verified buyers or can the verified buyers sell them to anyone? 
6.  Is it the share that is whitelisted after selling to a verified buyer (giving freedom to be re-sold to anyone) or the buyers account that is whitelisted? (allowing transfers only to other whitelisted accounts).
7.  DACx is functioning as an identity verification service for China, could it expand to allow identity verification from the US + elsewhere? 
8.  How does this work internationally?  If a UK company wanted to IPO in BitShares, who will do their investor identity verification?  The more countries the investor pool can be drawn from the better (more IPOs will happen on BitShares if more investors can take part, due to the proposition then being more attractive to businesses).
8.  Aren't dividends a required feature for this to be useful at all?  When will that be implemented?
10.  Who will consult with the business clients? 
11.  The whole process needs to be streamlined and intuitive for businesses doing an IPO and for investors.  Is there a IPO primer document for businesses?
12.  What else needs to be ready for IPO's on BitShares be ready to be marketed (B2B)? (e.g. gateways, identity verification services, dividends feature, web-wallet market activation, primer doc?)
13.  Which other cryptos can do this?

You are venturing into an area that I have spent months deciphering on my own for BunkerShares.

To give you the short general answer.. it doesn't matter if it's decentralized.. a security is a security.. and if you are going to sell securities, TO Americans or as an American.. you need to be registered with the SEC. That registration process costs tens of thousands of dollars.. there have been several cases of people who used bitcoin in similar manner and are now paying the price. Not even just big operations either, they have gone after small outfits just the same.

This isn't just about the US either.. pretty much any western country with trading/financial laws will have similar standards.


Very good questions and we have good answers too.  The legal hurdles are well described in USA and the western countries, and they are for a good purpose - to protect their citizens from fraudulent securities issuers.  Having said that, we may look into other not-so-well developed countries that do not have such legal requirements.  Perhaps some Asian countries with a good legal structure but do not have such requirements.  If you like, we can explore this further.  One thing for sure, there are a lot of ground-work research to be done.

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Offline xiahui135

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Re: IPO in a box - questions
« Reply #7 on: March 21, 2015, 07:30:20 AM »
there are many start-up in the NXT system. I bought a little share of the these companies.
Bitshares' UIA can also do this, if these team want to use it.

Offline Shentist

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Re: IPO in a box - questions
« Reply #8 on: March 21, 2015, 08:26:23 AM »
The soon to arrive UIA features will allow whitelisting and recall of UIAs which will allow companies to legally IPO on BitShares saving them huge costs associated with traditional IPOs.  This feature could be more useful than BitAssets, which this stage are limited by low liquidity and lack of gateways.  IPO in a box is an in demand service and its birth may call for a change of marketing strategy. 

Questions (some are quite specific, others open for general discussion):

1.  To buy shares in an IPO people need their identity verified.  Who will do the identify verification?  (itnom from moonstone mentioned on mumble they are looking being an identity verifier, is that for IPO whitelisting purposes and what's the ETA?).
2.  In the US do you need to be an 'accredited investor' or can anyone buy in providing they are verified?
2.  Is an animated explainer video for the IPO feature (directed at businesses) of more value than an animated explainer for BitAssets?
3.  Should IPOs on BitShares be the focus of marketing, moving BitShares into a B2B service, away from targeting the consumer with BitAssets?
4.  How do investors buy issued shares directly with fiat?  Will this feature also be limited by onramps?  (the income from the IPO is from the short-name UIA registration fee, so buying directly with fiat by passing BitAssets is ok, the DAC still makes a profit).
5.  As shares will only be able to be purchased by verified buyers, after purchase can the shares only be re-sold to other verified buyers or can the verified buyers sell them to anyone? 
6.  Is it the share that is whitelisted after selling to a verified buyer (giving freedom to be re-sold to anyone) or the buyers account that is whitelisted? (allowing transfers only to other whitelisted accounts).
7.  DACx is functioning as an identity verification service for China, could it expand to allow identity verification from the US + elsewhere? 
8.  How does this work internationally?  If a UK company wanted to IPO in BitShares, who will do their investor identity verification?  The more countries the investor pool can be drawn from the better (more IPOs will happen on BitShares if more investors can take part, due to the proposition then being more attractive to businesses).
8.  Aren't dividends a required feature for this to be useful at all?  When will that be implemented?
10.  Who will consult with the business clients? 
11.  The whole process needs to be streamlined and intuitive for businesses doing an IPO and for investors.  Is there a IPO primer document for businesses?
12.  What else needs to be ready for IPO's on BitShares be ready to be marketed (B2B)? (e.g. gateways, identity verification services, dividends feature, web-wallet market activation, primer doc?)
13.  Which other cryptos can do this?

You are venturing into an area that I have spent months deciphering on my own for BunkerShares.

To give you the short general answer.. it doesn't matter if it's decentralized.. a security is a security.. and if you are going to sell securities, TO Americans or as an American.. you need to be registered with the SEC. That registration process costs tens of thousands of dollars.. there have been several cases of people who used bitcoin in similar manner and are now paying the price. Not even just big operations either, they have gone after small outfits just the same.

This isn't just about the US either.. pretty much any western country with trading/financial laws will have similar standards.


Very good questions and we have good answers too.  The legal hurdles are well described in USA and the western countries, and they are for a good purpose - to protect their citizens from fraudulent securities issuers.  Having said that, we may look into other not-so-well developed countries that do not have such legal requirements.  Perhaps some Asian countries with a good legal structure but do not have such requirements.  If you like, we can explore this further.  One thing for sure, there are a lot of ground-work research to be done.

if this would be true - how is kickstarter and indigogo working?

Offline Pheonike

Re: IPO in a box - questions
« Reply #9 on: March 21, 2015, 09:20:48 AM »

You are not investing in a xompany, you pre-ordering a product.

Offline cube

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Re: IPO in a box - questions
« Reply #10 on: March 21, 2015, 09:53:59 AM »

if this would be true - how is kickstarter and indigogo working?

kickstarter is a rewards-based crowdfunding site (not equity-based).  See http://www.entrepreneur.com/article/231085

"The SEC rules only apply to equity crowdfunding, where a company is selling stock or equity from an online crowdfunding site. In fact, Kickstarter has already said it will not participate in equity crowdfunding, and most rewards-based crowdfunding sites will not do so either, primarily because of the extremely high cost of compliance."

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Offline bitsapphire

Re: IPO in a box - questions
« Reply #11 on: March 22, 2015, 10:03:46 PM »
The soon to arrive UIA features will allow whitelisting and recall of UIAs which will allow companies to legally IPO on BitShares saving them huge costs associated with traditional IPOs.  This feature could be more useful than BitAssets, which this stage are limited by low liquidity and lack of gateways.  IPO in a box is an in demand service and its birth may call for a change of marketing strategy. 

Questions (some are quite specific, others open for general discussion):

1.  To buy shares in an IPO people need their identity verified.  Who will do the identify verification?  (itnom from moonstone mentioned on mumble they are looking being an identity verifier, is that for IPO whitelisting purposes and what's the ETA?).
2.  In the US do you need to be an 'accredited investor' or can anyone buy in providing they are verified?
2.  Is an animated explainer video for the IPO feature (directed at businesses) of more value than an animated explainer for BitAssets?
3.  Should IPOs on BitShares be the focus of marketing, moving BitShares into a B2B service, away from targeting the consumer with BitAssets?
4.  How do investors buy issued shares directly with fiat?  Will this feature also be limited by onramps?  (the income from the IPO is from the short-name UIA registration fee, so buying directly with fiat by passing BitAssets is ok, the DAC still makes a profit).
5.  As shares will only be able to be purchased by verified buyers, after purchase can the shares only be re-sold to other verified buyers or can the verified buyers sell them to anyone? 
6.  Is it the share that is whitelisted after selling to a verified buyer (giving freedom to be re-sold to anyone) or the buyers account that is whitelisted? (allowing transfers only to other whitelisted accounts).
7.  DACx is functioning as an identity verification service for China, could it expand to allow identity verification from the US + elsewhere? 
8.  How does this work internationally?  If a UK company wanted to IPO in BitShares, who will do their investor identity verification?  The more countries the investor pool can be drawn from the better (more IPOs will happen on BitShares if more investors can take part, due to the proposition then being more attractive to businesses).
8.  Aren't dividends a required feature for this to be useful at all?  When will that be implemented?
10.  Who will consult with the business clients? 
11.  The whole process needs to be streamlined and intuitive for businesses doing an IPO and for investors.  Is there a IPO primer document for businesses?
12.  What else needs to be ready for IPO's on BitShares be ready to be marketed (B2B)? (e.g. gateways, identity verification services, dividends feature, web-wallet market activation, primer doc?)
13.  Which other cryptos can do this?

Edit:  Adding another:
14.  Should actual IPOs have a separate (and higher) UIA fee?  There is an identity verification cost with the service provided to them which is not present in other UIAs, so perhaps the other short letter UIA issuers should be charged less and a new fee introduced for those that do official IPOs with compliance features?

1. We're planning to include ID verification by V2 or 3 of Moonstone, meaning in 5-9 Months. There are some data retention issues we need to work out legally with our lawyers first.
2. Until the JOBS Act happens, you definitely need to be an accredited investor in thee US. Gateways will deal with all the legal stuff in each jurisdiction. After talking with companies in various countries I am pretty sure that the initial target market for stocks and bonds via Bitshares won't be the US, rather the emerging and frontier markets. Furthermore, just as the initial liquidity maker for Bitcoin were the dark markets and mining operations shares, so I think for Bitshares we will see a lot of gateway stock issuance happen at first. I would not be surprised if we see at some point dozens of gateway operations happening all at the same time, once the ID verification and market engine setup is done.
3. I think so, yes. To achieve this we also need to modify the trading engine to include Ripple-like offer auto-bridging and market making.
4. Yes, onramps will be hugely important. Most investment most likely will at first happen via BTC and bitUSD, later with gateway USD/fiat.
5.  Only verified and white-listed buyers. This is why gateways in each jurisdiction are so hugely important as in reality you will issue your share on a gateway in a specific jurisdiction.
6. The buyers account for that specific share.
7. [...]
8. This is why we think Moonstone will have such a huge impact. Any potential investor can sign up to any gateway and get verified for trading that gateways assets very fast. The threshold to trading on multiple gateways would be tiny, therefore liquidity huge.
9. True.
10. That is a completely new business opportunity!
11. Another business opportunity!
12. Preferably offer auto bridging just like ripple and pathfinding through market makers (also just like ripple).
13. Ripple could do it, but would require considerable modification. Ethereum probably could do it also, but permanently active contracts might get expensive over time. I think this is the first truly competitive advantage of Bitshares.
14. I think the fees are already either too high or too rigid. We need to charge for activity and blockchain space, rather than arbitrary fees.
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Offline BunkerChain Labs

Re: IPO in a box - questions
« Reply #12 on: March 23, 2015, 12:25:41 AM »
if this would be true - how is kickstarter and indigogo working?

These are pre-sales not equity offerings. There are crowdfund sites out there that do facilitate equity based crowdfunding.. however, the offers that do reach sites like that have all the same disclosures as they would of a regular securities offering.. the crowdfunding site in that instance is just making sure its all compliant before presenting it to their network. There are laws everywhere in regards to this type of crowdfunding that are being updated etc. For Western offerings largely this will just not be an option unless maybe someone decides to make that a business model to use UIAs as the mechanism.. now that sounds like an interesting business.. that crowdfund gateway would then ensure the compliance for those offerings and power it all by UIAs.. very cool.. just need someone who is willing to step up and take that model vs. regular transactions the way they are done today. I hope someone might come up with a business plan that provides enough value with the right marketing to make such a venture workable.

In the mean time.. emerging markets are going to be able to use UIAs without the regulations.. with that will come the high risks as well.. because while regulations in this regard are a PITA.. they ultimately help keep only vested and legitimate offerings from making it vs. rift raft with some clever marketing being able to fool enough people to get some money and run... which I see happening all too often in BTC.
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Offline sudo

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Re: IPO in a box - questions
« Reply #13 on: March 23, 2015, 12:44:49 AM »
can't wait to see
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