Important Announcement as posted at https://bitcointalk.org/index.php?topic=1033773.msg11450787#msg11450787.
B&C Exchange has so far been unable to procure the minimum $200,000 required to develop a functioning exchange. In some ways continued delays reduce the chances of a successful outcome because the availability of the core team (Jordan, sigmike, erasmospunk and tomjoad) cannot be be assured in the future. These individuals need to pursue other opportunities if B&C Exchange is not prepared to pay them for their work now. So, in this sense it is imperative that funding be procured now so work can begin immediately. On the other hand, time brings with it greater opportunities to expose new potential investors to B&C. It means the funding opportunities increase with time but the probability of employing our proven team diminishes. This implies that a strategy that permits work to start now and funds to be raised later is optimal.
We have not taken this route because we feel it is inappropriate to spend peopleās investment funds on a project that is clearly not yet funded to a degree that will permit the delivery of a functioning product that can bring a return on investment. Investment in such a scenario would be extremely risky, and we donāt want to risk our reputation by taking such a high risk of not bringing a return on investment to a broad set of investors from our community. However, very high risk ventures are suitable for a limited group of people such as venture capitalists with ample funds whose lifestyle will not be adversely effected by a failure of the venture. They routinely take very high risks for a chance of a very high rate of return. This is the sort of opportunity a partially funded B&C Exchange represents.
$80,000 has been procured from a small set of individuals who are certainly in a position to bear a total loss without any adverse consequences to their lifestyle, retirement, etc. These seed investors need to be rewarded for their high level of risk. Therefore, they will be given additional equity. They are purchasing 20% of the BKS for sale. Previously, giving half of the equity to BKS purchasers and half to NuShare holders was planned. This new plan will leave subsequent BKS purchasers unaffected, but it will reduce the equity of NuShare holders to 40% of initial total equity. This 10% of the total equity will be given to the seed investors, so they receive a total of 20% equity for their $80,000. This approach of using seed investment funds at the highest-risk beginning stages was proven to be successful in the development of Nu.
These funds will permit Jordan, erasmospunk, sigmike and tomjoad to begin work immediately. They will fund development for at least two months and perhaps three. The hope is that in that time interval the additional $120,000 needed to bring the project to a complete and workable state will be pledged and collected. Those investors will have considerably less risk because their funds will only be accepted if enough is pledged to complete the project. A marketing campaign will be conducted during the initial development phase to increase the chances of raising the needed additional $120,000. If the secondary funding drive fails and the project runs out of funding and is not completed, we wonāt have poisoned our relationships and reputation with a broad collection of investors because funds were only accepted from a tiny group well prepared to take extraordinary risk.
While we seek comment from the community and wish to gather the broadest support for the project by making any reasonable adjustments that may be suggested by the public, we wish to note moving forward only requires the approval of the seed investors. NuShare holders are involved because they will receive 40% equity, but they are being given that free of obligation, so their permission is not needed. We are not asking anything of NuShare holders, just as we are not asking anything of Bitcoin holders being given equity, although we believe the inclusion of these communities will bring tremendous benefit to B&C Exchange and we are indebted to these two communities for the gift of the code base we will fork as we begin development.
To summarize, initial equity will be now divided as follows:
Note that the funds pledged by second-round BlockShares purchasers will only be collected if $120,000 in pledges are reached. In combination with the $80,000 in committed capital from the seed investors, this would bring us to our goal of at least $200,000. Also note that the $55,310 already raised for second-round BlockShares purchases comes from the previous fundraising update totals.
For second-round BlockShare purchasers, here is the new sales schedule:
The current price is $4.08. Make a purchase by emailing bkssale@vistomail.com or sending a BitMessage to BM-2cTihATJ5FwJ7vWBwZmJjr55eFPFWBCmCQ. Please ensure you provide us with the information requested in the main announcement post.
Going into more detail, the cost of a given percentage of equity of second round BlockShare purchasers will not change in this updated plan. In order to maintain consistency in that regard, the number of BlockShares will need to be raised and their individual cost lowered. This is because the quantity of BlockShares given to NuShareholders is fixed: it was ~85,000 in the previous plan and will continue to be ~85,000 with this new proposal. However, the new plan reduces their equity percent to 40% from 50%. This requires the number of BlockShares given to seed investors, second round investors and Bitcoin holders be increased as shown above. Individuals who have already pledged funds will be eligible for the same percentage of BKS at the same price, but the quantity of BKS will be increased and the price per share lowered.