Author Topic: Crowdfunding a business?  (Read 4751 times)

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38PTSWarrior

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It was correctly pointed out to me that my lack of business experience will be a hindrance to convincing people to purchase the UIA.

But I'm having trouble detaching myself from this idea. It just feels right.

Is there anybody reading this who has ran a business before, with interest in cannabis, who would be willing, in exchange for some of the initial distribution of the UIA, to work with me on this in an advisory role, willing to step in when necessary with quality leadership advice grounded in experience?
Bump. I am interested to work with you somehow.

I think it's a non-starter. Most of the lawyers I've tried to contact have either not responded, aren't interested in the double risk of both the crowdfund and marijuana dispensary, or don't feel I have the experience necessary to run a business (which is the reason for that last post).

You ever ran a business before Martin?
No, never, only one time my camping for 1 dollar a night in Cambodia.

That was cool, I paid an employee really good and I felt so free.


unreadPostsSinceLastVisit

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It was correctly pointed out to me that my lack of business experience will be a hindrance to convincing people to purchase the UIA.

But I'm having trouble detaching myself from this idea. It just feels right.

Is there anybody reading this who has ran a business before, with interest in cannabis, who would be willing, in exchange for some of the initial distribution of the UIA, to work with me on this in an advisory role, willing to step in when necessary with quality leadership advice grounded in experience?
Bump. I am interested to work with you somehow.

I think it's a non-starter. Most of the lawyers I've tried to contact have either not responded, aren't interested in the double risk of both the crowdfund and marijuana dispensary, or don't feel I have the experience necessary to run a business (which is the reason for that last post).

You ever ran a business before Martin?

38PTSWarrior

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It was correctly pointed out to me that my lack of business experience will be a hindrance to convincing people to purchase the UIA.

But I'm having trouble detaching myself from this idea. It just feels right.

Is there anybody reading this who has ran a business before, with interest in cannabis, who would be willing, in exchange for some of the initial distribution of the UIA, to work with me on this in an advisory role, willing to step in when necessary with quality leadership advice grounded in experience?
Bump. I am interested to work with you somehow.

unreadPostsSinceLastVisit

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It was correctly pointed out to me that my lack of business experience will be a hindrance to convincing people to purchase the UIA.

But I'm having trouble detaching myself from this idea. It just feels right.

Is there anybody reading this who has ran a business before, with interest in cannabis, who would be willing, in exchange for some of the initial distribution of the UIA, to work with me on this in an advisory role, willing to step in when necessary with quality leadership advice grounded in experience?

Offline namjar

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Last year I created a project that named " WEAGG", and I discuss with fuzzy, it is possible to operate in China, but the least fund amount must be more than 5,000,000 RMB ( US$ 786,500 or so ) for register a Equity Crowdfunding Platform.

Anybody interest in this project?


Offline BunkerChainLabs-DataSecurityNode

DSN, I just sent you more details about what I have in mind.

If anybody else wants to read let me know, I'm just not ready to post about it publicly yet.

Got it.. replied. :)
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unreadPostsSinceLastVisit

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Double check my logic here.

How would crowd funding a completely new business from the ground up work using only the bitshares platform?

You'd pay an issuance fee for a new UIA. Create it, and determine the amount that's going to exist.

The value is initially zero. You hold, let's say, 100,000 of this new asset.

Then you create a business plan (a meticulously thought out business plan, covering every possible concern and aspect after consulting a lawyer), spread it around, and get people interested.

Then on launch day, put up a sell order for however many shares you want to sell, lets say, 100,000, and set a price. This is where I'm a bit iffy. If you want to use the proceeds to establish the business, then that might work against you if the people who buy the initial 100,000 sell before you do, right? Is it possible to lock them in the system so that yours is the only sell order? Or do you basically have to hold them, use a website to track who all donate, then distribute when you're ready for them to be traded?

Anyway, say you determine (and I'm pulling a number out of my ass here just for the example, in practice the number would be the exact amount necessary based on research into the expenses) that you need $200,000 to start the business and keep it running long enough to start turning profit. So you set the initial offering at 2 dollars per share. Sell them all, and agree to use... lets say 50% of the businesses future profits to buy back shares every month, at whatever price they may be selling for (presumably, nobody would want to sell unless for more than they purchased for), until they're all bought back. You would give detailed monthly updates on how the business is doing until they're all bought back.

I'm thinking about starting work on a brick and mortar business plan. Does the above sound like a viable way to go about it? Am I missing anything? Is this a terrible idea? What are you thoughts, community?
I would be happy to jump on a call with you to explain what I have been working on, and how I foresee the process from different angles.

Okay, I'll send you a PM.

Offline Murderistic

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Double check my logic here.

How would crowd funding a completely new business from the ground up work using only the bitshares platform?

You'd pay an issuance fee for a new UIA. Create it, and determine the amount that's going to exist.

The value is initially zero. You hold, let's say, 100,000 of this new asset.

Then you create a business plan (a meticulously thought out business plan, covering every possible concern and aspect after consulting a lawyer), spread it around, and get people interested.

Then on launch day, put up a sell order for however many shares you want to sell, lets say, 100,000, and set a price. This is where I'm a bit iffy. If you want to use the proceeds to establish the business, then that might work against you if the people who buy the initial 100,000 sell before you do, right? Is it possible to lock them in the system so that yours is the only sell order? Or do you basically have to hold them, use a website to track who all donate, then distribute when you're ready for them to be traded?

Anyway, say you determine (and I'm pulling a number out of my ass here just for the example, in practice the number would be the exact amount necessary based on research into the expenses) that you need $200,000 to start the business and keep it running long enough to start turning profit. So you set the initial offering at 2 dollars per share. Sell them all, and agree to use... lets say 50% of the businesses future profits to buy back shares every month, at whatever price they may be selling for (presumably, nobody would want to sell unless for more than they purchased for), until they're all bought back. You would give detailed monthly updates on how the business is doing until they're all bought back.

I'm thinking about starting work on a brick and mortar business plan. Does the above sound like a viable way to go about it? Am I missing anything? Is this a terrible idea? What are you thoughts, community?
I would be happy to jump on a call with you to explain what I have been working on, and how I foresee the process from different angles.

38PTSWarrior

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Interesting thread, for me the business plan is a tough one.

unreadPostsSinceLastVisit

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DSN, I just sent you more details about what I have in mind.

If anybody else wants to read let me know, I'm just not ready to post about it publicly yet.

unreadPostsSinceLastVisit

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Well.. some research online can help you  get started with what potential legal issues you may face. It really depends where you live though. Are you in the US?

Yes. Ohio

Offline BunkerChainLabs-DataSecurityNode

Well.. some research online can help you  get started with what potential legal issues you may face. It really depends where you live though. Are you in the US?
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unreadPostsSinceLastVisit

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Why so? If you put a sell order at $1/share and people buy into it .. why would they sell it for less? (unless they want to leave a sinking ship)

According to DSN it happened to Moonstone. People are flaky.


What you are describing is using it as a debt vehicle. You are crowdfunding a loan. Tonyk already mentioned the legal issues that often surround these things, so I would be careful in that regard. You may recall how AGS was a 'donation' and how nothing was promised.. or with brownies how BM keeps saying they hold no promise value.. this is because the moment you promise something, you are turning those tokens into agreements, and depending on how that goes, whatever regulations may go with that will apply.

I am concerned about the legal issues. I don't think I'd really be able to afford to retain a lawyer until I've gone ahead and started the project. So I'm thinking about putting it off until I can either save up enough to do that, or I can convince an attorney to be interested enough in the project to do it for a percentage of the UIA. I know that AGS were a donation, but could I really call what I'm wanting to do a donation if they're getting a UIA in return? I definitely need a lawyer.

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Crowdfunding is a fickle beast that I have first hand experience with. I would not recommend it to anyone unless they have the opportunity to work with someone who has run a few campaigns successfully. That said, there are some pretty good ebooks/courses out there that could be useful too.


I would follow up on any recommendations you were to drop on the subject.

Quote

One thing I can tell you is that it will be HARD WORK. You don't just launch and it sells. You will work full-time both before, during, and after the crowdfund sale in attempting to make it successful. If you don't, it will fail.


I'm not a stranger to hard work. A full time job trying to establish something like this sounds so very much better than juggling three part time jobs like I'm currently doing.

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Secondly.. if it is a failure.. it will be a public one. Some people have trouble handling that. In some instances, it can also damage your capability to access other capital sources in the future because some investors might take that as a 'signal' from the market that your product is not a seller.

I have no capability to access other capital sources anyway. In fact, I'd probably be listing myself as a risk factor in the business plan. I would be trying to dig myself out of a hole. But I'd at least own up to it. That's why if I did this I'd come to the table with an incredibly thorough plan. And I'm not saying I'm going to do it yet, but I've been thinking about it for a few weeks.

Quote
Do you planning.. put together you business canvas model, and then look at the picture and decide if you still think it is a viable option.

I won't know for sure if its a viable option until next month. But all the other planning I'm going to try to do within the next few weeks.

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Not trying to discourage you... BitShares UIA is a perfect vehicle for this... just be sure you do your homework beforehand.

I am not at all discouraged by your input, you guys are a hell of a lot nicer than the free advice forums. The most discouraging thing is the need for an attorney BEFORE issuing the asset. I'm not sure how (or if) I'm going to be able to handle that yet. Otherwise I'm pretty sure I can make this work if the cards fall right. I don't want to waste time because what I'm thinking about doing can leverage first-mover advantage. It also includes first-mover risk.

Quote

Let me know if there is anything I can do to help out.

Good luck.

Thank you! Any and all input on dumb, small details would be welcome. Example: how much of the businesses profit would it be appropriate to use to buy back issued shares?

Offline BunkerChainLabs-DataSecurityNode

If we assume you have solved all the legal issues. (big if I know), you plan is exactly what the system is meant to do for you.

Only one small note:

. This is where I'm a bit iffy. If you want to use the proceeds to establish the business, then that might work against you if the people who buy the initial 100,000 sell before you do, right? Is it possible to lock them in the system so that yours is the only sell order? Or do you basically have to hold them, use a website to track who all donate, then distribute when you're ready for them to be traded?

Your proceeds from the sell are in BTS (bitUSD). So you should not care for what price the people are selling after your IPO. So you issue 110k IOUs in your business "MerockStar and Moon Ventures", sell 100K for your expenses @ 1 bitUSD a peace.

My concern is that I'd only get half of them sold at the asking price I'd need to establish the business, then people would start dumping the price down.

Unless the shares could be locked.

I don't have the technical skill to do my own AGS, the way LottoShares appears to be doing. But I do have the technical skill to issue a UIA, and I am more than qualified to create the kind of business I'm thinking about trying to start up... I know I share a lot of high hopes on these forums, but THIS is something I am fully capable of handling. I'm sure of it, and I'm sure I can convince others of that too.

UPDATE: I see here that they can be locked from being traded. Perfect!

As you discovered.. you can set it so that your shares are not on the market. Your concern with others preselling during your crowdfund is exactly what happened to Moonstone where people started to buy and sell from under them while they were still trying to crowdfund.

What you are describing is using it as a debt vehicle. You are crowdfunding a loan. Tonyk already mentioned the legal issues that often surround these things, so I would be careful in that regard. You may recall how AGS was a 'donation' and how nothing was promised.. or with brownies how BM keeps saying they hold no promise value.. this is because the moment you promise something, you are turning those tokens into agreements, and depending on how that goes, whatever regulations may go with that will apply.

Crowdfunding is a fickle beast that I have first hand experience with. I would not recommend it to anyone unless they have the opportunity to work with someone who has run a few campaigns successfully. That said, there are some pretty good ebooks/courses out there that could be useful too.

One thing I can tell you is that it will be HARD WORK. You don't just launch and it sells. You will work full-time both before, during, and after the crowdfund sale in attempting to make it successful. If you don't, it will fail.

Secondly.. if it is a failure.. it will be a public one. Some people have trouble handling that. In some instances, it can also damage your capability to access other capital sources in the future because some investors might take that as a 'signal' from the market that your product is not a seller.

Do you planning.. put together you business canvas model, and then look at the picture and decide if you still think it is a viable option.

Not trying to discourage you... BitShares UIA is a perfect vehicle for this... just be sure you do your homework beforehand.

Let me know if there is anything I can do to help out.

Good luck.
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Offline xeroc

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My concern is that I'd only get half of them sold at the asking price I'd need to establish the business, then people would start dumping the price down.
Why so? If you put a sell order at $1/share and people buy into it .. why would they sell it for less? (unless they want to leave a sinking ship)