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Offline CLains

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VC DAC
« on: February 05, 2014, 12:30:08 PM »

How does one create a Venture Capitalist (VC) DAC?

A VC DAC will get money as input and intelligently spend them as output. In this way, people can put money into the VC DAC and easily get a return on their investment. VC DAC is the DAC of all DACs.

How to make the VC DAC intelligent? One way is to construct the VC DAC in such a way that the people who process the input most intelligently are incentivized to work for the VC DAC. Call these people optimal VCs.

It may be sufficient incentive for the optimal VCs to work within the VC DAC that they are given more purchasing power by the people who put money into the VC DAC. In this case, the people who invest increase the intelligence of their money, and the optimal VCs get more money to invest.

I assume here that it's better for an optimal VC to have 100 bitcoins that they get 50% return on investment from, than it is to have 50 bitcoins with 100% return. Is this true, or true enough?
« Last Edit: February 06, 2014, 09:50:11 AM by CLains »
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Offline fuzzy

Re: VC DAC
« Reply #1 on: February 05, 2014, 09:25:02 PM »
Can you explain what you mean by VC?  I would like to hear more :)
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Offline CLains

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Re: VC DAC
« Reply #2 on: February 06, 2014, 09:52:46 AM »
Venture Capitalist (VC): An investor who either provides capital to startup ventures or supports small companies that wish to expand but do not have access to public funding.

The idea I am aiming at is having a DAC work like an optimal VC, i.e. a VC that maximizes profit by intelligently investing in the right startup DACs in the right way.
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Offline JakeThePanda

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Re: VC DAC
« Reply #3 on: February 06, 2014, 01:09:17 PM »
I'm confused.  How do you make an autonomous corporation that will be able to figure out how to allocate investment funding?

Offline CLains

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Re: VC DAC
« Reply #4 on: February 06, 2014, 02:36:15 PM »
I have no idea, but my suggestion so far is the following: Build a DAC that allows people, say John, to invest in stocks while allowing other people to invest in John.

John will be one of several VCs with a following. Why do people invest in John? Because they trust Johns judgement more than their own, or don't have time/skills to go into details on each investment. Why does John help people invest? To get more capital on each investment.
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Offline JakeThePanda

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Re: VC DAC
« Reply #5 on: February 06, 2014, 02:49:15 PM »
I have no idea, but my suggestion so far is the following: Build a DAC that allows people, say John, to invest in stocks while allowing other people to invest in John.

John will be one of several VCs with a following. Why do people invest in John? Because they trust Johns judgement more than their own, or don't have time/skills to go into details on each investment. Why does John help people invest? To get more capital on each investment.

Got it, thanks.

Offline cloudcoiner

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Re: VC DAC
« Reply #6 on: February 08, 2014, 05:15:57 AM »
I've seen stock market games where users are allocated a given number of points they can buy imaginary shares with. Then they see which users guessed the best stocks by looking at how much money they would have earned in the real world if they had invest a dollar for each point. Over time some users clearly rise to the top and prove they have a track record of successfully predicting the best stocks. Then, they consider giving the top ranked players REAL money to invest, of which they split the profit.

Now this is an interesting idea but there are two main things that can go wrong.
1. The top ranked users may have merely won by luck, and would not likely repeat the success.
2. The investor is a bad person and purposely takes the real money and 'loses' it by sending it to a bad investment which the investor alone profits from (embezzlement).

To solve the first problem, the number of successful predictions should be great enough that it is unlikely to be by chance alone. To solve the second problem, the investor may have to pass a background check and have some disclosure, and the group as a whole would have to determine if something is a good investment or not.

I think if you had a class of successful investors you can eliminate a lot of risk by having one that nominates an investment to be separate from those that vote on the investment. If the investment idea passes, then the group can determine how much to allocate.

Think of it like the (US) government and how it secures the public through the checks and balances of the three branches. Separation of the powers ensures a safer outcome.

In our case, everyone would work together to maximize share price, earnings, and dividends.

I'm new to protoshare but really excited about it. Please send tips:

Protoshare:   Pfd7yVHojcWvcLeDCSmKPo77QD3EgZ3r8F
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Offline CLains

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Re: VC DAC
« Reply #7 on: February 10, 2014, 12:42:56 PM »
Excellent points cloudcoiner!

This is quickly becoming the coolest DAC on the block.  8)
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Offline bungeebones

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Re: VC DAC
« Reply #8 on: February 10, 2014, 02:49:12 PM »
I've got an idea (and a website already functioning) where the venture capital is web traffic. The options for a website to monetize their web traffic today are somewhat limited and those that exist are designed to convert the web traffic into currency (stress on currently realized income). The idea is to invest your site's web traffic for both long term returns as well as into short term currency  and to encourage others to invest their web traffic into the DAC also. As each website joins and adds traffic each site also functions as a sales kiosk/shopping cart to market the aggregate web traffic. Every web site they market the web traffic to is, of course, also a prime candidate to invest their own web traffic in the DAC.

The return on investment for this web traffic DAC would be in the form(s) of web traffic for the investor's site and/or in Bitcoin (their choice). Some may want to invest their own web traffic in the DAC in order to receive an even greater amount back. This is nothing more than the time tested method of Internet traffic building known as a link exchange. But because payment can be received as Bitcoin it provides an incentive for high traffic producing sites to remain despite the fact they contribute much higher amounts than other sites in the exchange. In other words, it is a link exchange with the additional feature of a built in price discovery mechanism and market.

How do I go about starting a DAC around the idea?

Offline CLains

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Re: VC DAC
« Reply #9 on: February 10, 2014, 07:26:00 PM »
In other words, it is a link exchange with the additional feature of a built in price discovery mechanism and market.

I'm a bit on the slow side here. Let me see if I understand what you are saying.

The incentive for Startups (with little traffic) is to get VClike nodes (with large amounts of traffic) to invest traffic in the startups, so that they can build up their network. In return, the VClike nodes get a share of all future traffic that these startups get. If the VClike nodes do not need more traffic, they can cash out their returns (Traffic) in Bitcoins instead.

The DAC would do several things, 1) Track the traffic of different sites. 2) price the Traffic in some unit 3) allow people to trade Traffic with bitcoin and 4) allow VClike entities to invest Traffic in startups, and allow startups to buy Traffic for a stake in their future traffic.

Is this right, or am I going off the rails here? I think you need to break down your idea further. In particular, if this is right, start by explaining how each of these points could be implemented by a DAC, or DAC in combination with a website or something else.

How do I go about starting a DAC around the idea?

I suggest you write out your idea and business-model in a whitepaper and either present it to the community here or, if you want to keep it secret for now, send it to Invictus for review. Invictus are very much encouraging people to create their own DACs, so you're here at the right time.

One of the main purposes of Invictus, although it's not entirely clear yet, is to help people create their own DACs. If you join in on honoring AGS/PTS you can get:

•A stipend to work in one of our incubators for a period of time.
•The legal fees to set up your company in its chosen favorable jurisdiction.
•Fully equipped office space at one of our incubator sites.
•Forum and web site support while you build you own base of supporters.
•Crypto-savvy legal, accounting, financial and tax support.
•Use of our trusted escrow services while you are building your own reputation.
•Consulting with Dan “bytemaster” Larimer and our team of innovators.
•Help with finding opportunities to speak at a major conference.
•Promotional support integrated with our own global marketing campaign

See the Invictus February newsletter page 8-10 for more information.
« Last Edit: February 10, 2014, 07:32:55 PM by CLains »
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Offline bungeebones

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Re: VC DAC
« Reply #10 on: February 10, 2014, 10:23:08 PM »
Quote
The incentive for Startups (with little traffic) is to get VClike nodes (with large amounts of traffic) to invest traffic in the startups, so that they can build up their network. In return, the VClike nodes get a share of all future traffic that these startups get. If the VClike nodes do not need more traffic, they can cash out their returns (Traffic) in Bitcoins instead.

The DAC would do several things, 1) Track the traffic of different sites. 2) price the Traffic in some unit 3) allow people to trade Traffic with bitcoin and 4) allow VClike entities to invest Traffic in startups, and allow startups to buy Traffic for a stake in their future traffic.

Is this right, or am I going off the rails here? I think you need to break down your idea further. In particular, if this is right, start by explaining how each of these points could be implemented by a DAC, or DAC in combination with a website or something else.

How do I go about starting a DAC around the idea?

Quote
I suggest you write out your idea and business-model in a whitepaper and either present it to the community here or, if you want to keep it secret for now, send it to Invictus for review. Invictus are very much encouraging people to create their own DACs, so you're here at the right time.

Yes, I agree about the white paper but because of Bitcoin and now Invictus it seems like I have a lot more tools available for me to utilize. I've been involved with Bitcoin for over a year and have some background with that but am totally new with Bitshares and want/need to explore it's possibilities and applications in the idea. I have no problem putting the idea out to the community so, if it is all right,  I'll test the waters of what could be on a white paper here in the forums. One particular issue as the current business model is centralised and I want to use DACs to decentralise as much of it as I can.

Since this is a post about venture capital I'll keep the perspective on the idea of web traffic as capital.

Quote
The incentive for Startups (with little traffic) is to get VClike nodes (with large amounts of traffic) to invest traffic in the startups, so that they can build up their network.
The incentive for Startups (with little traffic) would be mostly to get to use the web traffic of the network themselves but they can still use their little bit of traffic they get to market the traffic of the network, too, for income. In addition to their network traffic as a sales tool they also have their customer base and all the other social networks they are involved in. Any one of their acquaintences is a prospective customer and downline. In other words, they don't have web traffic capital but can still invest the little they have and can also invest their "sweat equity" and market the traffic of the larger sites.

Quote
so that they can build up their network.
When the network is built up every node (high traffic, low traffic etc) benefit because by cooperating they are actually creating a product that didn't previously exist (at least not in such a marketable form). So by "their network" I would say yes, everybody's network. A start up site usually has a long row to hoe before their web site ever has enough traffic to make it worthwhile to market it themselves. Some sites (such as small businesses like barber shops, bakeries, mechanics etc) will never get enough traffic to bother marketing it. This simple script on their site (which I would anticipate web designers will want to install for them) is a free, no maintenance way to capture that capital (i.e. web traffic) that would otherwise just be going to waste. And someone like a barber, who is meeting people all day long, has a perfect opportunity to find other website owners who are probably looking for more traffic to their site.

Quote
the VClike nodes get a share of all future traffic that these startups get.
Every site (hi or low traffic) are VC so what we want to look at is how they will get a return on their investment. One way is direct sales of the networks web traffic. It would stand to reason that sites with more traffic would be able to sell more traffic and earn more Bitcoin. The second way they earn Bitcoin arises because every site that registers to advertise is also a very likely prospect to recruit to become a node themselves. That prospect is what made me decide to make the commission policy multi-level. So web sites with more traffic will likely recruit more websites and earn more residual income on their downline than the smaller sites would. And both those income streams are long term meaning they continue to earn return each time a buyer pays for advertising.

Quote
In return, the VClike nodes get a share of all future traffic that these startups get. If the VClike nodes do not need more traffic, they can cash out their returns (Traffic) in Bitcoins instead.
In return, the VC like nodes get a share of the earnings of the startups nodes advertising sales and everyone in the network gets a share of the web traffic they contribute. In theory a visitor could go to your website, visit the web directory there and happen to pick one of your downlines and go there and register. Inversely, a visitor could go to their site and follow the directory to your site and register there. You would still get long term earnings either way but if the downline actually made the sale they would get a larger share. Web traffic cannot be stored, it can only be diverted or more precisely coaxed into a direction to follow. So the idea is to convert that web traffic into purchased advertising (i.e. Bitcoin) and get it credited and to the earners as quickly as possible.
 

Quote
One of the main purposes of Invictus, although it's not entirely clear yet, is to help people create their own DACs. If you join in on honoring AGS/PTS you can get:

•A stipend to work in one of our incubators for a period of time.
•The legal fees to set up your company in its chosen favorable jurisdiction.
•Fully equipped office space at one of our incubator sites.
•Forum and web site support while you build you own base of supporters.
•Crypto-savvy legal, accounting, financial and tax support.
•Use of our trusted escrow services while you are building your own reputation.
•Consulting with Dan “bytemaster” Larimer and our team of innovators.
•Help with finding opportunities to speak at a major conference.
•Promotional support integrated with our own global marketing campaign

See the Invictus February newsletter page 8-10 for more information.

All of the above is sorely needed by me but what do you mean by "If you join in on honoring AGS/PTS you can get: ..."?

I really appreciate all your help.

Offline Stan

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Re: VC DAC
« Reply #11 on: February 10, 2014, 11:15:18 PM »
In other words, it is a link exchange with the additional feature of a built in price discovery mechanism and market.

I'm a bit on the slow side here. Let me see if I understand what you are saying.

The incentive for Startups (with little traffic) is to get VClike nodes (with large amounts of traffic) to invest traffic in the startups, so that they can build up their network. In return, the VClike nodes get a share of all future traffic that these startups get. If the VClike nodes do not need more traffic, they can cash out their returns (Traffic) in Bitcoins instead.

The DAC would do several things, 1) Track the traffic of different sites. 2) price the Traffic in some unit 3) allow people to trade Traffic with bitcoin and 4) allow VClike entities to invest Traffic in startups, and allow startups to buy Traffic for a stake in their future traffic.

Is this right, or am I going off the rails here? I think you need to break down your idea further. In particular, if this is right, start by explaining how each of these points could be implemented by a DAC, or DAC in combination with a website or something else.

How do I go about starting a DAC around the idea?

I suggest you write out your idea and business-model in a whitepaper and either present it to the community here or, if you want to keep it secret for now, send it to Invictus for review. Invictus are very much encouraging people to create their own DACs, so you're here at the right time.

One of the main purposes of Invictus, although it's not entirely clear yet, is to help people create their own DACs. If you join in on honoring AGS/PTS you can get:

•A stipend to work in one of our incubators for a period of time.
•The legal fees to set up your company in its chosen favorable jurisdiction.
•Fully equipped office space at one of our incubator sites.
•Forum and web site support while you build you own base of supporters.
•Crypto-savvy legal, accounting, financial and tax support.
•Use of our trusted escrow services while you are building your own reputation.
•Consulting with Dan “bytemaster” Larimer and our team of innovators.
•Help with finding opportunities to speak at a major conference.
•Promotional support integrated with our own global marketing campaign

See the Invictus February newsletter page 8-10 for more information.

Yes, and note that this includes help with forming your own company to develop and support your long product line of DACs!   :)
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline CLains

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Re: VC DAC
« Reply #12 on: February 11, 2014, 12:18:43 AM »
All of the above is sorely needed by me but what do you mean by "If you join in on honoring AGS/PTS you can get: ..."?

When you create a DAC with Bitshares you have 100% of the shares to allocate to the potential users. If you promise to allocate 20% of these shares, 10% to AGS (AngelShares) and 10% to PTS (ProtoShares) you get the services listed, plus a lot of support from the community.

AGS and PTS are shares that anyone can buy on equal terms, and everything will go towards DACs that honor the 20% rule. This is why Invictus themselves are also giving 20% of all shares in their future DACs to people who hold AGS and PTS. Initially, the AGS/PTS will go toward funding the DACs that Invictus creates, but as more people honor the 20%, Invictus and the AGS/PTS stakeholders will use the money to help them succeed, as it raises the value of AGS/PTS.

With 20% given to AGS/PTS you have 80% that you can use to have a giveaway or take it as profit or whatever best serves your business model. If your business model is good, and you honor AGS/PTS, Invictus will help you with promotion and help set up your own AngelShares auction to attract investors that will help gather more funding for your business as well!
« Last Edit: February 11, 2014, 12:28:07 AM by CLains »
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Offline bungeebones

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Re: VC DAC
« Reply #13 on: February 11, 2014, 02:12:26 PM »
Quote
When you create a DAC with Bitshares you have 100% of the shares to allocate to the potential users. If you promise to allocate 20% of these shares, 10% to AGS (AngelShares) and 10% to PTS (ProtoShares) you get the services listed, plus a lot of support from the community.

When does the promise have to be made? Do I wait to allocate the 20% until such time as I am ready for the services?

Offline CLains

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Re: VC DAC
« Reply #14 on: February 11, 2014, 03:11:46 PM »
Quote
When you create a DAC with Bitshares you have 100% of the shares to allocate to the potential users. If you promise to allocate 20% of these shares, 10% to AGS (AngelShares) and 10% to PTS (ProtoShares) you get the services listed, plus a lot of support from the community.

When does the promise have to be made? Do I wait to allocate the 20% until such time as I am ready for the services?

You want the promise to be made when the community inspects your proposal, i.e. when all eyes are on you to determine if your idea is plausible or not. The community will likely inspect your proposal more favorably and closely if you put in bold that you allocate 20% to their AGS/PTS. If the community embraces your idea/business model and it's a good one, Invictus will probably help you directly.

See how bytemaster proposed to fund the backend DAC for this music business here for instance. I suggest you spend the better part of a day or two writing up your idea/proposal/business-model and create a new thread in the alternative DACs subsection of the forum, and call the thread something like "AGS/PTS honoring X DAC" where X is the name of your DAC.

Make it clean and easy to understand. Also it doesn't hurt to say a little bit about how you will spend the immediate next few weeks. E.g. interacting with the community, coming into contact with people, refining your plan, writing up a whitepaper etc.
« Last Edit: February 11, 2014, 03:17:00 PM by CLains »
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