Whether or not raising $4M is needed, I don't know. My first thought was, "OK, they need money for R&D that doesn't include preorders...cool...but then what the hell was the Angel Seed Funding used for, especially to warrant a 30% stake?"
Hi Korbman, we wanted to address this question specifically. The Angel's Seed funding has gotten the company to this point - a working, low-power, Scrypt mining chip. It takes significant time and R&D funds to get to this point.
The $3.6 Million will be used to manufacture the chips and manufacture/source the remainder of the Alchemist's necessary components. The $400,000 remaining (listed as R&D on the prospectus) will be used for rent, staff costs, accommodations for business partners, and any other incidental R&D costs or costs otherwise. Basically, operating funds needed to get everything prepared for shipping in July.
1. Can you be more specific about the VC funding received so far? How much money has been invested by VC's?
My fear/impression is that the VC's got their shares much cheaper than IPO investors. To my understanding, developing a chip up to the mask is not that expensive and surely does not cost $4 Mio (that would be >20-40 man years in salary!!!). There are many ASIC companies that develop a working prototype up to the mask using only 30% of the pre-order money (e.g. Alpha-tech).
2. What salary was/is paid to the founders and head of development? Surely they should be working for a low salary given their high profit share (30%)?
I see the risk that AlcheMiner ends up not profitable, not only because of market risk and extreme competition, but also because certain key figures earn a very high fixed salary. Who would control/prevent this?
3. How do you expect to compete time-wise? When did you start with the ASIC verification etc.? KnC passed the RTL stage, Fibonacci is also starting tape out later this quarter.