1
Investor Presentation
July 2014
“Bitcoin represents something fundamental and powerful”
– Fred Wilson, Union Square Vent...
2
Future Capital Bitcoin Fund
$30m Fund
Equity
Investments
Bitcoin and
digital currency
ecosystem
Experienced
investment
m...
3
Overview
1. The Bitcoin Investment Opportunity
2. Price and Takeup
3. Future Capital Bitcoin Fund
Appendix
4
Why Bitcoin?
1. The Bitcoin Investment Opportunity
2. Price and Takeup
3. Future Capital Bitcoin Fund
Appendix
5
What VCs are saying about Bitcoin
Fred Wilson
Union Square Ventures
• “We believe that bitcoin represents something fund...
6
…and they are putting their
money in…
High profile
Bitcoin
investments
from past 18
months
$160M: Total VC funding repor...
7
…and accelerating
$40M
Series B
July 2014
$30M
Series B
March 2014
2014 run rate of US$284m, almost 3x the 2013 total in...
8
Financial Institutions are watching
Type Activity
Investment Bank Report
Investment Bank Report
Investment Bank Report
I...
9
…and thought leaders are
seeing promise
“I’m a big fan of
Bitcoin …
Regulation of
money supply
needs to be
depoliticized...
10
Opportunity Areas
Bitcoin Aiming to Disrupt $457bn+ Total Market Cap
Payment
Processors:
e.g. Visa,
Amex,
Mastercard
$3...
11
… offering large potential
transaction cost savings
Potential annual net savings with Bitcoin based on 2013 volumes
201...
12
13
Opportunity Areas
Bitcoin Companies can be grouped into 6 categories
Payment processors
Mining hardware
Financial servi...
14
Bitcoin Penetration
1. The Bitcoin Investment Opportunity
2. Price and Takeup
3. Future Capital Bitcoin Fund
Appendix
15
As a “currency”, the price has recovered
Source: CoinDesk Bitcoin Price Index daily closing price (taken at 00:00 UTC)
16
… opinions vary on where it could be
Sound economic models developed
by senior bank officials…
“Our current view
implie...
17
While Bitcoin as money is small
2,705
255
8 7
0
500
1,000
1,500
2,000
2,500
3,000
US Australia Guatemala Bitcoin
M1Mone...
18
Its use in commerce is growing
Region Businesses
North America 1,563
Europe 1,478
South Asia / Australia 227
South Amer...
19
Bitcoin advancing on other networks
Bitcoin Western Discover Paypal Discover Amex Union Pay Master Card Visa
AverageDai...
20
Bitcoin access by merchants and
customers is becoming easier
Point of Sale By Internet By Mobile Bitcoin ATMs
21
The Opportunity
1. The Bitcoin Investment Opportunity
2. Price and Takeup
3. Future Capital Bitcoin Fund
Appendix
22
Investment Highlights
$30m Fund
Equity
Investments
Bitcoin and
digital currency
ecosystem
Experienced
investment
manage...
23
Experienced Investment Team
Domenic Carosa
Over 20 years of
experience in Technology,
StartUps, Corporate
Finance and F...
24
Previous Investment Experience
25
Tax Free Returns*
 Pre-registered as an Early Stage Venture Capital Limited
Partnership (ESVCLP) under the Australian ...
26
Fund Investment Allocation
Example of investment allocation amounts over successive funding rounds
Stage
No of
Investme...
27
Sample Opportunities
bitSIM Mobile-to-Mobile transfer of Bitcoin
bitPOS Point of Sale solutions for merchants
CoinJar C...
28
Open for Investment
Information Memorandum
available
Investors welcome globally -
AUD, USD, EUR, Yuan
Investment via bi...
29
Next Steps
Participate in the global Bitcoin phenomenon
Contact:
Domenic Carosa
dom@futurecapital.com.au
+61 411 19 69 ...
30
Overview
1. The Bitcoin Investment Opportunity
2. Price and Takeup
3. Future Capital Bitcoin Fund
Appendix
31
What is Bitcoin?
A quick introduction
Digital
Currency:
• The world’s first decentralised digital currency
Peer-to-Peer...
32
Getting Started
How do I get Bitcoins?
Receive Bitcoins as payment
for goods or services
Purchase Bitcoins at
a Bitcoin...
33
Bitcoin for users
Simple, frictionless transactions
A mobile Bitcoin wallet allows
a user to send and receive
Bitcoins
...
34
Bitcoin for Business
Enabling new markets, reducing admin costs
Bitcoin transactions are secure and irreversible protec...
35
36
Attachments
 BTC Criticism and History
 BTC Mining Explained
37
38
39
Bitcoin Mining
Creating Bitcoins by managing the network
Traditional
mining
Bitcoin
mining
Bitcoin
mining
snapshot:
1. ...
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Future Capital Bitcoin Fund (FCBF) investor presentation

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The Future Capital Bitcoin Fund (FCBF) is an Australian-based $USD30 million fund, launched in May 2014, to make equity investments, globally, into companies facilitating payments, exchanges, trading and smart property rights based around the Bitcoin and other digital currency ecosystem. The fund is conditionally registered as an Early Stage Venture Capital Limited Partnership (ESVCLP) under the Australian Venture Capital Act 2002, providing investors fully tax free returns. Potential investors should always obtain their own independent financial and taxation advice.

Future Capital Bitcoin Fund (FCBF) investor presentation

  1. 1. 1 Investor Presentation July 2014 “Bitcoin represents something fundamental and powerful” – Fred Wilson, Union Square Ventures
  2. 2. 2 Future Capital Bitcoin Fund $30m Fund Equity Investments Bitcoin and digital currency ecosystem Experienced investment management team Registered in Australia Tax Free returns * Accepting investments globally including in Bitcoin Sourcing opportunities globally *The Fund is pre-registered as an Early Stage Venture Capital Limited Partnership (ESVCLP) under the Australian Venture Capital Act. Provides investors fully tax free returns (whether on income or capital account) including dividends. Potential investors should always obtain their own independent financial and taxation advice.
  3. 3. 3 Overview 1. The Bitcoin Investment Opportunity 2. Price and Takeup 3. Future Capital Bitcoin Fund Appendix
  4. 4. 4 Why Bitcoin? 1. The Bitcoin Investment Opportunity 2. Price and Takeup 3. Future Capital Bitcoin Fund Appendix
  5. 5. 5 What VCs are saying about Bitcoin Fred Wilson Union Square Ventures • “We believe that bitcoin represents something fundamental and powerful, an open and distributed peer to peer protocol for transferring purchasing power. “ Tim Draper Draper Fisher Jurvetson • “Bitcoin has the potential to transform the world the way the Internet did … All finance / commerce can be transformed by Bitcoin.” Mark Andressen Andreesen Horowitz • “Personal computers in 1975, the Internet in 1993, and – I believe – Bitcoin in 2014.” Chris Dixon Andressen Horowitz • “Bitcoin is the first plausible proposal for an economic protocol for the Internet.” Jim Breyer Accel Partners • “I’m confident you’ll see major worldwide retailers adopting …Bitcoin.”
  6. 6. 6 …and they are putting their money in… High profile Bitcoin investments from past 18 months $160M: Total VC funding reported in more than 30 Bitcoin deals $50M: Amount invested by Andreessen Horowitz into Bitcoin startups $40M: Investment in Xapo - The largest total investment into a Bitcoin company $30M: Investment in Bitpay – A Richard Branson backed Bitcoin company $25M: Funding of Coinbase – A Sillicon Valley backed Bitcoin company $15M: Liberty City Ventures own “Digital Currency Fund” $11M: Winklevoss Capital investment directly into Bitcoin $2M: Peter Thiel (Paypal) personal contribution to a Bitcoin fund 60 Number of investors in “BitAngels”, a Bitcoin angel investment network Bitcoin startups present a high potential investment option
  7. 7. 7 …and accelerating $40M Series B July 2014 $30M Series B March 2014 2014 run rate of US$284m, almost 3x the 2013 total investment of $99.5m Q1 $64.5m 2013 Total $99.5m Note: *Includes first sequence venture deals but excludes late-stage 1995 internet investments ($257.6m). For additional disclosure on methodology see http://www.coindesk.com/following-money- trends-bitcoin-venture-capital-investment/
  8. 8. 8 Financial Institutions are watching Type Activity Investment Bank Report Investment Bank Report Investment Bank Report Investment Bank Report Ratings Agency Report Asset Management Investment Consultancy Report “We believe Bitcoin can become a major means of payment for e-commerce and may emerge as a serious competitor to traditional money transfer options.” David Wood Bank of America/Merrill Lynch
  9. 9. 9 …and thought leaders are seeing promise “I’m a big fan of Bitcoin … Regulation of money supply needs to be depoliticized” Al Gore Former US Vice President “Bitcoin may hold long-term promise” Ben Bernanke Former US Fed Reserve Chairman “Bitcoin is a technological tour de force” Bill Gates Microsoft Co-founder “We have elected to put our money and faith in a mathematical framework that is free of politics and human error” Tyler Winklevoss Entrepreneur
  10. 10. 10 Opportunity Areas Bitcoin Aiming to Disrupt $457bn+ Total Market Cap Payment Processors: e.g. Visa, Amex, Mastercard $381BN Payment Hardware: e.g. NCR, Micros, Verifone $25BN Money Transfer / ATM Outsourcing: e.g. Western Union, Money Gram $14BN Bank Software: e.g. Fidelity, Fiserv $37BN Total $457BN+ Source: CoinDesk, Wedbush Securities – As at 8 April 2014
  11. 11. 11 … offering large potential transaction cost savings Potential annual net savings with Bitcoin based on 2013 volumes 2013 Market Size ($bn) Retail Ecommerce Remittances $ volume by market 10,383 609 549 Prevailing average pricing 2.5% 2.9% 8.9% Bitcoin pricing 1.0% 1.0% 1.0% Prevailing transaction fees 259.6 17.8 48.9 Bitcoin transaction fees 103.8 6.1 5.5 Potential Savings with Bitcoin ($bn) 155.7 11.8 43.4 Source: Goldman Sachs Global Investment Research
  12. 12. 12
  13. 13. 13 Opportunity Areas Bitcoin Companies can be grouped into 6 categories Payment processors Mining hardware Financial services Exchange Wallets Universal Exchange
  14. 14. 14 Bitcoin Penetration 1. The Bitcoin Investment Opportunity 2. Price and Takeup 3. Future Capital Bitcoin Fund Appendix
  15. 15. 15 As a “currency”, the price has recovered Source: CoinDesk Bitcoin Price Index daily closing price (taken at 00:00 UTC)
  16. 16. 16 … opinions vary on where it could be Sound economic models developed by senior bank officials… “Our current view implies a maximum fair value of bitcoin = US$1,300” David Wood Bank of America/Merrill Lynch …To those that are “true believers” “We believe Bitcoin could reach $US $10,000” Tyler Winklevoss High profile Bitcoin advocate/Facebook
  17. 17. 17 While Bitcoin as money is small 2,705 255 8 7 0 500 1,000 1,500 2,000 2,500 3,000 US Australia Guatemala Bitcoin M1MoneySupply(US$BN) Rank Country Money Supply ($BN) 90 Bitcoin 6.15 91 Afghanistan 5.92 92 Sudan 5.85 93 Macau 5.84 94 Uzbekistan 5.84 95 Serbia 5.79 96 Ghana 5.77 97 Uruguay 5.32 98 Papua New Guinea 5.30 99 Malta 5.27 100 Yemen 5.14 Bitcoin is small compared to US, Australian currencies … but there are 100 countries that have a smaller currency supply than Bitcoin
  18. 18. 18 Its use in commerce is growing Region Businesses North America 1,563 Europe 1,478 South Asia / Australia 227 South America 167 India 94 Africa 24 Approx. 60,000 merchants accept Bitcoin ... mostly online Physical businesses accepting Bitcoin
  19. 19. 19 Bitcoin advancing on other networks Bitcoin Western Discover Paypal Discover Amex Union Pay Master Card Visa AverageDailyTransactionVolume(US$) (Pulse) $100M $1BN $10BN $20BN $41M $216M $299M $397M $438M $2.4BN $7.5BN $9.8BN $16.5BN Source: Coinometrics.com, 30 April 2014
  20. 20. 20 Bitcoin access by merchants and customers is becoming easier Point of Sale By Internet By Mobile Bitcoin ATMs
  21. 21. 21 The Opportunity 1. The Bitcoin Investment Opportunity 2. Price and Takeup 3. Future Capital Bitcoin Fund Appendix
  22. 22. 22 Investment Highlights $30m Fund Equity Investments Bitcoin and digital currency ecosystem Experienced investment management team Registered in Australia Tax Free returns * Accepting investments globally including in Bitcoin Sourcing opportunities globally *The Fund is pre-registered as an Early Stage Venture Capital Limited Partnership (ESVCLP) under the Australian Venture Capital Act. Provides investors fully tax free returns (whether on income or capital account) including dividends. Potential investors should always obtain their own independent financial and taxation advice.
  23. 23. 23 Experienced Investment Team Domenic Carosa Over 20 years of experience in Technology, StartUps, Corporate Finance and Funds Management ASX listed companies incl growing destra to revenues of over $100M Tony Stephen 25 years PwC. Fellow Tax Institute Australia. Dealt with major corporations, billion dollar transactions and high growth tech companies Leon-Gerard Vandenberg Deep technology and commercialisation experience in defence, authentication, mobile and card payment systems incl CTO for US Navy smartcard Company Remco Marcelis CFO/COO for technology/cleantech businesses for 10 years, preceded by 4 years in venture capital. Raised and invested nearly $40 million Holger Arians Holger last worked in the German Defence Industry. He is an Alumni from Harvard Business School and did an Executive MBA in Germany and France.
  24. 24. 24 Previous Investment Experience
  25. 25. 25 Tax Free Returns*  Pre-registered as an Early Stage Venture Capital Limited Partnership (ESVCLP) under the Australian Venture Capital Act 2002.  Provides investors fully tax free returns (whether on income or capital account) including dividends. * Potential investors should always obtain their own independent financial and taxation advice. Refer: http://www.ausindustry.gov.au/programs/venture-capital/esvclp/Pages/default.aspx
  26. 26. 26 Fund Investment Allocation Example of investment allocation amounts over successive funding rounds Stage No of Investments A$ investment per company A$ invested Seed 20 $250k $5M Series A 8 $500k $4M Series B 4 $1.5M $6M Series C 2 $3M $6M Total $21M Note: Series A,B,C represent successive follow-on funding rounds Example based on a $30m raising
  27. 27. 27 Sample Opportunities bitSIM Mobile-to-Mobile transfer of Bitcoin bitPOS Point of Sale solutions for merchants CoinJar Cloud based Wallet Monetas Digital Finance Platform Bitcoincloudmining Cloud-based Bitcoin mining
  28. 28. 28 Open for Investment Information Memorandum available Investors welcome globally - AUD, USD, EUR, Yuan Investment via bitcoin welcome
  29. 29. 29 Next Steps Participate in the global Bitcoin phenomenon Contact: Domenic Carosa dom@futurecapital.com.au +61 411 19 69 79 Holger Arians holger@futurecapital.com.au +61 439 716 110 www.futurecapital.com.au/bitcoinfund
  30. 30. 30 Overview 1. The Bitcoin Investment Opportunity 2. Price and Takeup 3. Future Capital Bitcoin Fund Appendix
  31. 31. 31 What is Bitcoin? A quick introduction Digital Currency: • The world’s first decentralised digital currency Peer-to-Peer: • Can be transferred from person to person through the internet without an intermediate financial institution Open Source: • A secure, consensus-guided payment network that is powered by its users with no central authority or middlemen Fast-growing: • Grown from $0 to $7.7BN market cap in 5 years with millions of dollars transacted daily Bitcoin (BTC)
  32. 32. 32 Getting Started How do I get Bitcoins? Receive Bitcoins as payment for goods or services Purchase Bitcoins at a Bitcoin exchange Exchange Bitcoins with anyone in the world Earn Bitcoins through competitive ‘mining’
  33. 33. 33 Bitcoin for users Simple, frictionless transactions A mobile Bitcoin wallet allows a user to send and receive Bitcoins Send and receive any amount of money, instantly anywhere in the world, at any time No merchant account needed Bitcoin payments are easier to make than debit or credit card purchases Payments can be made via unique ID, QR code or tapping phones Private with no customer personal information at risk Convenient, low cost, instant
  34. 34. 34 Bitcoin for Business Enabling new markets, reducing admin costs Bitcoin transactions are secure and irreversible protecting merchants from fraudulent chargebacks Bitcoin eWallets and terminals are encrypted and do not expose sensitive or personal information Merchants can use Bitcoin payment where either credit cards are not available or costs unacceptably high Higher trust is created as unwanted or unnoticed charges can’t be made as can happen with other payment methods No volatility if the merchant decides to retain funds in Bitcoin
  35. 35. 35
  36. 36. 36 Attachments  BTC Criticism and History  BTC Mining Explained
  37. 37. 37
  38. 38. 38
  39. 39. 39 Bitcoin Mining Creating Bitcoins by managing the network Traditional mining Bitcoin mining Bitcoin mining snapshot: 1. The process of co-managing the network by processing transactions, providing encryption and synchronising the system 2. ‘Miners’ operate in all countries and no individual has control over the network 3. This secures the entire network and ‘miners’ receive Bitcoins in exchange 5. New coins are created annually until 21M coins are in circulation 6. Once all coins are in circulation the miners are supported by transaction fees

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