Ok, so you buy the ATM with investor's capital. The investor however doesn't own the machine. Instead, you give them a portion of the lease. The lease runs for X months (10?) and then it expires. The investor's investment is now 0. It is worthless.
IF: Leases can run for 18 months or more. Most common is 36 months, with some operators requesting leases of up to 5 years. The Fund is for fractional ownership of a pool of BitcoinATMs that will be leased to qualifying operators.
So, during those 10 months, you have to effectively pay back the entire amount that I would have invested, plus profit. You say that can go to about 25% of the initial investment. Though I've seen no numbers that explain how that is supposed to work. What do you charge for a lease? What percentage of that then goes to the investor? Over a 10 month period, how much is the investor looking to actually get back if the machine is leased for that 10 month period? I don't think the numbers work.
IF: 25% per annum
above and beyond the capital repayment and Fund fees. Over the course of the lease, the machine is paid back via the lease payments from the operators (which is capital repayment plus mark-up). Leasing is not made to operators at cost. Leasing is a mature business model used by HP, Xerox, General Motors, Dell, and many, many more to great success.
Where as, you get to renew the lease and keep the rest of the lease profits for yourselves. It's not like the machine will just explode. You're saying we can reinvest in a new lease, now that our first investment is worthless, we can buy in at full price to purchase another lease. But nobody is really going to do this unless you can prove it's profitable to do so. I think a lot of people will be pissed that their investment is suddenly worth nothing because the lease expired.
IF: The revenue from the machines owned on behalf of the Fund unit holders go towards dividend/capital payments to the Fund unit holders per the disbursement policy in the prospectus. If the lease is renewed, it doesn't change the Fund's ownership of the machine, and the Fund unit holders will continue to realize revenue. Same with an end of lease sale, or a break of the lease fee, or a mid-lease sale of a unit. Any revenue tied directly to the machine is classified as Fund revenue.
If you have not done so, I would recommend reading over the prospectus (
http://ignitefinancing.com/BTM_prospectus.pdf) which explains Fund revenue.
If the person you vet decides to break out of the lease, or steals the hardware, you say there is a fine. But what recourse is there for investors here? They eat the cost of the machine and only receive a fraction of the initial lease. I imagine you are going to insure these machines when you install them. Do investors get the insurance money back if the device is stolen or struck by lightning?
IF: In certain cases we will require collateral, a co-signer, or other guarantee of the lease payments, such as a bond. Specific scenarios will call for different insurances depending on the qualification of the operator. In the event a leasee fails to meet a payment, we are the titled owner of the machine and can remotely disable it, as well as lock the leasee out of any cash and/or Bitcoin on the machine (depending on the mfg). If required, we will procure a court order and repossess the machine, as well as work with collections agencies when required. When the Fund backed machines are not making money, we aren't making money either.