Crowdfunding the creation of the next version of LFGSS

Most important (can't believe that nobody has brought this up) will we still be allowed to swear on the forum?

Of course, building a machine that builds and hosts forums would in no way mean that I censor you.

More to the point, in terms of running forums it's been far more successful for me to be hands off and let the people within a forum establish their own lines for such things and police it themselves.

If you're in a forum where everyone is cool with swearing, then go ahead. If you're in a forum where people prefer not to, expect to be taken to task by other forumengers.

But... there isn't going to be automated censorship and bleeping.

Not least because there is no technical solution to someone posting C u N t. Especially if they mix in a bit of unicode.

So... heading for £75k voted. Anyone want to bet on £100k potential?

We've debated on what to do here. Due diligence would estimate a half million valuation as being fair and reasonable, so £50k = 10%. If we took more money we'd give out greater equity... but if we did that we would be at risk in the long-term of having brought in extra investment that wasn't needed, when that same equity could have been issued later for a much high number.

That is... if it's feasible that in 12-18 months we could get a Series A round that invested £200k for 10% to allow key hires... then wouldn't we be fools to have issued that 10% today for £50k.

Whilst we could dilute... you lose a lot of faith if you dilute unreasonably. And it is something that is watched closely. There are only typically expected to be 5 rounds maximum... angel, seed, A, B and possibly C. Each issuing 10% at a time (and diluting the prior rounds).

On top of that employee options are typically 5-10% blocks that are allocated in the first 5 years at the rate of one block per year (you aim to exit in that timeframe unless growth is such that you hang on a bit more).

And the founders are expected to hold onto 50%.

All in, if you've followed the math we'd have issued 150%... and with dilution that means in a clean calculation that employees hold a non-voting chunk, investors hold a voting preference third, and founders hold a third (which if you look at Facebook you'll note that Zuck is just below a third).

Whilst that all is fine, it means that % is finite and should be preserved in the company for future investment or employee incentive. In effect... whilst it is wise to raise more than we need because everything always works out more costly, we should also avoid issuing excessively as we'll start killing off future potential.

The short of it: We're likely to limit the investment possible to £50k.

Out of this comes another question. Why not raise the price, so £75k buys 10%. And the answer is due diligence and fair valuation. Just because there is demand to invest £75-100k it does not mean that it's true that the company has suddenly had an increase in value to £750k that would satisfy the due diligence of Seedrs and future investors.

If Seedr approve too quickly I won't be ready...

Seedrs won't, we've been advised by lawyers to wait a few days... details in the post I will write after this.

at some point in the future (years) Microcosm may be a profitable company.
You MAY then receive dividend payments.

It is also possible that a company would want to buy Microcosm at some point and if that were to happen then you would receive some money for your shares - depending on how much it were purchased for would determine how much you got for you shares.

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None of the above is in any way guaranteed to happen

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Another possibilty is that Microcosm would become a publicly traded company - in which case you would also be able to sell your shares

You've described 2 of the 3 types of exit that investors should look for.

The first being M&A (Mergers & Acquisition... or takeover), the second being IPO (Initial Public Offering... or float on stock exchange and sell your shares)... but the third being bankruptcy.

Thankfully SEIS takes care of small investors to minimise the risk of bankruptcy if you are a UK taxpayer or something. It is up to you to read up on this, I cannot advise you in this element... actually, this is beyond what I'm allowed to do.

WHAT?!?!? what's all this may stuff? I fully expect Microcosm to be as big as Microsoft, Apple and Facebook combined within 6 months at the outside. I expect a £1,000,000 dividend each week thereafter.

I'm beginning to wonder how I passed that questionnaire.

Seriously though danb puts it well. No relection on David but be prepared to lose all the money.

Exactly.

And whilst I may have the ambition and dream of a billion dollar company... the reality is that I might end up just accommodating a few cycling forums in the UK and for a couple of organisations.

Thread TL:DR...

Isn't the concept exactly the same as what google wave was?

Hah, yeah... you could view it that way.

Perhaps in 10 years that's where we end up. Was Wave ahead of it's time? Is the time now?

More importantly, if Wave was packaged up to look and feel like something so familiar as a forum... would it have achieved greater traction? If it was targeted at hobbies/pastimes, would it have achieved growth?