Peer lending and crowdfunding are making their way into the Bitcoin ecosystem/economy and people are starting to take notice.
I have gotten to know alot of great people in the Bitcoin (BTC) ecosystem so far including England's own Jamie Cressey, despite the fact he's not an Arsenal fan like I am. Jamie is the creator of the newest and most user friendly Equity Crowdfunding platform in the market today called Coinsortium.
While my focus is on peer lending and crowdfunding from the borrowing side of things, it's important to see what is happening on the equity side and how we can take advantage of it for our investing benefit and the benefit of the companies that list there.
This platform allows for companies in the BTC economy to raise funds for equity and/or dividends to be paid in BTC to investors.
Registration: Is It Legal?
Coinsortium is registered as a UK entity. This makes sense on a few levels including how on all things crowdfunding in the UK is ahead of the US in terms of having sensible laws in place. As US investors, unless we are accredited, we have limitations on where we can invest, which I describe in more detail in my old post about Why I Can Lend with Lending Club but Not With Circleback Lending. The US accreditation differences don't apply in the UK as long as there is full disclosure of the potential risks involved.
Jamie's goal is to make this a fully functioning peer to peer stock exchange eventually with SEC compliance (doesn't have yet) and FSA compliance in the UK (which he does have).
US companies and US controlled companies cannot list here so far due to the lack of SEC compliance mentioned above but please doublecheck that with your own legal counsel. US investors that invest in one of more of these listings should consult their CPA and attorney to be sure you are in compliance, both legal and tax.
Verification and Security
Jamie told me he is using a great new service called Ardeva, provided by another investment group member that is a 'brilliant platform offering potential project owners a variety of ways to increase their verification score, however nothing compares to [your own] due diligence. Whilst we encourage all investors to carry out their own checks, listings are regularly screened and irregularities are discussed in private first to clarify.'
For security, aside from standard 2 factor authorization, Coinsortium is working with MultiSigPlus as wallet partner. This means that multiple people have to sign off on withdrawals from this wallet as well as decentralizing information in a way that makes hacking and theft more difficult as the wallets are not stored on site.
Cost and Service
For a listing fee of 0.5 BTC (currently around $295), a company can list their company or project on the platform. This is what a screenshot looks like for the BTC Diverse Investing Fund listing:
This is an investment fund listing seeking investors looking to capitalize on growth opportunities in the BTC market. This is not a solicitation to sell this offering to any investors US or otherwise :).
When we own company stock, it means we get to vote on numerous items including the election of the board of directors. Coinsortium allows for voting as project owners are able to request votes from their shareholders, all of which are accessible via their public ledger. Upon the vote’s expiration date all votes are calculated and the result, plus swing percentage is displayed for all to view. Individual user votes are not disclosed to maintain personal privacy.
How To Get a Listing
When a non-US based someone wants to list on Coinsortium, it's really easy. The simple streamlined nature of the site and its excellent user interface are a couple of the reasons why I think this will become the leading platform in a very short time.
Per Jamie, 'The actual process of listing a security is a one page task. Approx 5 inputs in a HTML form. The more time consuming part comes from verifying yourself, which is where Ardeva really pays off. Verify your details once with Ardeva and use them wherever Ardeva is supported.'
That's it. Fill out a simple HTML form, provide verification information about who you and your company/project are with Ardeva and then you are on your way. Lack of verification or other negative due diligence information means no listing for them and a little more peace of mind for those that get listed and those looking at investing in the listings. It also means that Coinsortium is out to build a good honest platform and not just maximize the listing fees they could earn.
Other additional features including bond listings to fund projects are something they are considering down the road. For now it's one thing, BTC based project and equity funding and they are doing it very well.
If you prefer to own a piece of a project rather than lend to it then crowdfunded equity sites are something you should be looking at. If you are also interested in Bitcoin as well as equity, then Coinsortium is something you need to check out.