10 Bitcoin Startups to Benefit from Crowdfunding Initiative
Simon Dixon and Max Keiser are joining forces to help launch 10 non-competing bitcoin startups on crowdfunding platform BankToTheFuture.com.
Simon Dixon and Max Keiser are joining forces to help launch 10 non-competing bitcoin startups on the crowdfunding and equity crowdfunding platform BankToTheFuture.com.
The aim, says Dixon, is to help the companies get "investment ready" by aiding them with their tax, legal issues, business plan, financial model, valuation, video pitch and marketing for their equity crowdfunding campaign, and take them through the initial stages of securing funding.
Dixon pioneered the development of equity crowdfunding, consulting the Bank of England, Treasury and Financial Conduct Authority for a change in rules in 2012 with the result that UK tax office HM Revenue and Customs (HMRC) now rewards investors in companies that qualify for the SEIS (Seed Enterprise Investment Scheme) with a 50% tax rebate on their investment from income tax paid.
In addition, HMRC offers further relief from capital gains tax. In the event that the company is successful, there is no capital gains tax to pay, and if it fails, investors can offset losses giving them up to 86% tax relief. The team also changed the rules to enable investors to invest in businesses online through equity crowdfunding.
Dixon says that, in an ideal situation, the total risk for qualifying investors who invest in qualifying businesses is 14% of what they invest.
Dixon's beginning
Dixon got his start at TD Waterhouse as a tea-boy and climbed the ladder to become a Stockbroker, he then worked as a trader for investment bank KBC Peel Hunt on the London Stock Exchange and has a masters degree in economics as well as a short career in corporate finance. He has a passion for the alternative investment market and alternative capital.
One of the spin offs from his previous firms is ‘Positive Money’, a socially oriented group aimed at reforming the Monetary Policy Committee. Founded by Ben Dyson, it is the first national group to bring a conversation to the mainstream media about ending fractional reserve banking in the UK.
Dixon says he believes bitcoin and crowdfunding to be the perfect marriage, warning startups off taking loans from banks. He explained:
As director of the UK Crowdfunding Association who led the charge to get the regulators to change their rules, he said: "In the past it was a criminal offence to pitch your business to someone who wasn’t rich. You could spend seven years in jail for doing so.
"Not only that, but it would have cost you an additional £35,000 to get an FCA authorised firm to verify your business. Now, as a result of the UK Crowdfunding Association’s lobbying, for the first time in history, the UK supports the most democratized investment structures in the world, whereby any investor, no matter what size, can get shares in a company without breaking the law."
Pre- and post-crowdfunding
Dixon goes on to say that, in his opinion, there have been two eras to finance for small businesses, before crowdfunding, and after. He said that the costs associated with starting a business used to be at least £50,000, with the founder being reliant on friends and family to help them out.
This has all changed with Silicon Valley giving us a global distribution network through Twitter, Facebook, YouTube, and Skype. Also, the cost of starting a small business has been reduced to the cost of a laptop, an internet connection and a smart phone.
"The hardest part is raising that first £50,000-100,000, as once you get to the Venture Capital level, raising money is easy," Dixon added.
This is where BankToTheFuture.com and Max Keiser hope to be able to make a significant difference to the lives of fledgling bitcoin businesses – by offering them the benefit of exposure, publicity and investment.
Keiser's addition to the effort is to give publicity to the startups chosen, however he is also launching his own crowdfunding initiative called StartJoin, which is based on rewards rather than equity.
A fierce libertarian and critic of central banks, governments and other monopoly institutions, Keiser started off in Wall Street and has always been a specialist in virtual currency and technology, pioneering the Hollywood Stock Exchange back in the 90s.
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He says equity crowdfunding is unique to the UK, and that London is the world leader in tech.
“Some of the banks are starting to realize if they don’t pay attention to bitcoin they’re going to go the way of the dodo,” he added.