Risk Factors – Funds Which Involve Equity Positions

The following risk factors describe a sample of risks inherent to any private fund we may offer that involves equity positions. This list is not intended to be exhaustive, and it should be considered in conjunction with the broader document on general risk factors inherent to any private fund we may offer.

Additional Information

Risks inherent to equities denominated in Bitcoins are a superset of those inherent to equities denominated in fiat currencies. Prospective participants in Bitcoin-denominated equity activities, whether listed or private, should therefore ensure they are fully aware of all relevant risks inherent to fiat-denominated activities in these areas.

Company Specific Risks and Lack of Transparency

No ‘companies’ — in fact, very few are incorporated as companies at all — which are currently available for the fund to invest in offer any significant operating history, any reasonable level of financial transparency, or more than a few nods in the direction of modern standards of corporate governance. At best, companies available for Bitcoin-denominated investment have been involved with Bitcoin for less than four years, while the entire operating histories of most are actually numbered in months. Even the largest cats in this space provide little or no financial transparency, auditing, or shareholder-friendly corporate governance. Many operate anonymously and outside the reach of regulatory frameworks that could provide recourse for shareholders or creditors in the event of disputes, corporate malfeasance or simple incompetence. These factors and more make the evaluation of risk associated with any given investment extremely challenging. Participants should expect that the fund will not always make these evaluations correctly and will be unlikely to foresee all or even any changes in the competitive landscape of individual companies that could alter their risk profiles radically.