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Coinbase announces confidential submission of draft registration statement

182 points by sinak 6y ago

sna1l 6y ago
This is a no-brainer with the huge run up in crypto that in the last boom was a huge profit inducer for Coinbase. Growth rates will also look great QoQ and YoY. With the fed balance sheet growing and the current revenue multiples small-mid cap tech stocks are receiving, they should be able to raise substantially more money than previously expected. It'll be interesting to see how much they expect to raise and of course their actual financials.
BryanBeshore 6y ago
I really wish more startups (if you can call them that at this stage) would go public earlier. There are so many companies I'd love to invest in at much earlier in their life. Coinbase is one of them for sure.
- xiphias2 6y ago
  Is there any reason to invest in it instead of jusr buying Bitcoin? I remember the ,,thin protocol vs thick protocol'' comparisions that said that for Internet it was worth investing in the companies over the internet, as with Bitcoin, just buying it can give a better return.
  - sna1l 6y ago
    If another cryptocurrency rises to overtake Bitcoin, or even just grow larger, Coinbase will profit from that (assuming they support it) vs Bitcoin.
    - xiphias2 6y ago
      Bitcoin was made more and more secure over 10 years by disabling every feature that was not necessary to make it a digital store of value (like addition/substraction as they could overflow). If there are new ways to take away even more features from it, I'm not sure why they couldn't be taken away from Bitcoin as well to improve its security. Ethereum is a complementary to Bitcoin that's a more complex and less secure, less scarce store of value, and it's much more about running complex financial contracts. As these protocols have strong network effects that give their value, it's really hard to just ,,overtake'' them.
  - ve55 6y ago
    Coinbase is more about the ecosystem than BTC itself. It's likely that BTC doing well is good for Coinbase, yes, but they stand to benefit from many other things, including other cryptocurrencies, more users adopting it (while the price may not increase), and other areas like custody services, decentralized finance services, and whatever other products they're still working on. Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on.
    - Melting_Harps 6y ago
      > Coinbase is more about the ecosystem And making it worse for people who simply don't know any better and catering to high-net worth people? Amazing business model. > Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on. So, they're a bank? The very incarnation of Bitcoin's persona non grata ever there ever was one. The apologists around here trying to suck off YC and VC money teet may be more complaint, but I hope this new wave of customers goes to Square/CASH (an easier transition since so many already have it on their phones) in order to steer them to companies that do actual meaningful work in this ecosystem, instead of act as a parasite as Armstrong and Coinbase do.
      - xiphias2 6y ago
        We need companies like Coinbase, I think they provide great value, although what they did with the BCH push and trying to centralize Bitcoin was a huge overreach. Bitcoin is stronger than the current financial system, so I'm not afraid of companies that bridge the two systems. Personally I stay with Bitcoin, as it has a monopoly position, unlike Coinbase that has great competitors for all their important products at this point.
        6y ago
  - gruez 6y ago
    > Is there any reason to invest in it instead of just buying Bitcoin? "In a gold rush, sell shovels"
  - kylebenzle 6y ago
    Yes! Bitcoin (the BTC chain) got it's GitHub repo hijacked years ago by corporate interests and the company Blockstream. The whole concept is a dead end and they are actively trying to push people into using their "second layer" solutions to the congestion and problems they have introduced. People like Greg Maxwell and Adam Back were able to kick out the original maintainers and are hell bent on making Bitcoin not work. Bitcoin Cash is the closest thing to "Bitcoin" now but Blockstream employees an army of Twitter and Reddit trolls to block any real discussion. Greg is basically a one-man-army himself at this point.
    - cheaprentalyeti 6y ago
      I just checked... it's about three to four years post-fork, and the size of the "Bitcoin" blockchain (as you call it) is (minus indexes) about 315 Gb. The size of the Bitcoin Cash blockchain is roughly 170Gb. I don't know what it was when they forked, but it should have been the same size. The people you accuse of hijacking Bitcoin seem to have a much higher transaction rate since the fork than the Bitcoin Cash team has achieved.
- ve55 6y ago
  Going public comes with a lot of work, expectations, obligations, and has a high requirement for corporate maturity. It's not easy, not always desirable, and it's definitely not feasible to do early on most of the time. I think what we actually want is the ability for us normal people to invest in private companies more easily, rather than for private companies to become public more easily. This is difficult partially due to the SEC and partially due to historic reasons for how private equity is generally allocated and traded, but I'm hoping it gets better some time. But I share the sentiment, I'm continually disappointed when there's a company I really want to invest in, but I know that I won't get a chance to buy it until 5 years later when it has already 100x'd and then just gets IPO dumped to retail, becoming more of a short-term casino (e.g. see all recent tech IPOs) instead of long-term bet placed intelligently early-on in the race. If I could purchase shares in anything from Stripe to Discord to even Chik-fil-A (not to mention a certain 10 or so certain YC companies...), I would in a heartbeat (and I'd be willing to pay a premium for this too!), but the privilege likely won't be given to me until I no longer desire it.
  - ericd 6y ago
    Are you familiar with EquityZen and Forge? If you're accredited, they can make it feasible to invest in a number of private companies. Companies can make that difficult by exercising their ROFR consistently, but many don't.
    - doanerock 6y ago
      Wait can I really invest in stripe and buy shares before they go public using EquityZen? Is this correct?
      - ericd 6y ago
        AFAICT Stripe is one of those that aggressively ROFRs. I’ve been trying to invest in them for a while, but no luck.
    - ve55 6y ago
      It's an option to note, I haven't used them as I'm not sure I'd have a good chance of being able to get what I want (since obviously there has to be a seller for me to buy), and the fees also seem pretty notable (5%, and/or up to 2% annual), maybe with some other potential issues of distribution/ownership (it seems it's not equivalent to owning the shares, but owning part of another entity that does own the shares). But, it may be a lot nicer than nothing for some, so thanks for reminding me of it.
- jtsiskin 6y ago
  They don't want to. If you think they will still grown, I'm sure the owners do as well. They don't benefit from selling at a lower price than they think they will eventually, unless they need the cash. But if they need the cash, getting it from a single source like a VC comes with many other benefits. The only way it would work out for them is if 'going public' would give them significantly more money per share than a VC would. Which I guess may be possible
- jedberg 6y ago
  They used to go public sooner, before Sarbanes-Oxley (SOX). That law made it so onerous to be a public company that most companies avoid it for as long as possible now. And SOX was born because of Enron. So blame Enron for this trend.
- centimeter 6y ago
  The extreme amount of regulation around becoming a publicly traded company makes this infeasible except for large, mature companies that don't really have much asymmetric upside available anymore. These regulations were created mostly in the name of protecting "mom-and-pop" investors, but the net effect has mostly been to shut "mom and pop" out of the most lucrative investments. This might or might now be a good thing, depending on how valuable you think it is to decrease variance for "unsophisticated" investors.
- ineedasername 6y ago
  You can invest: 1) Indirectly: Find a publicly traded VC firm that owns a piece of the startup(s) you like, and invest in them. You'll benefit from the upside if those startups do well, and be buffered from the downside through the VC firm's diversification. 2) Directly: There's a few ways to invest through secondary markets. Sharepost & EquityZen provide some access in this area, possible others as well. If you're interested in Coinbase in particular, EquityZen has you covered: https://equityzen.com/listings/?q=coinbase https://equityzen.com/listings/?q=coinbase
  - electriclove 6y ago
    Have you done either? What was the experience like?
    - ineedasername 6y ago
      Have you done either Not at all, I just like to follow the industry. It's a fascinating time to be a spectator from the sidelines. I'm perfectly happy with the "aggressive" setting on my retirement fund, paying 0.08% annual fee (that's $0.80 per $1,000) with an average return of 7%-10% over the last 20 years. I'll wind it down to less aggressive as I get older. Apart from that, I have little trust in myself to, on average, make decisions that will outperform the above. My tolerance for risk of that sort is pretty low, and I'm not particularly motivated by money beyond the comfortable lifestyle I have now: It's zero debt, will see college tuition paid for my 3 kids, a reasonable retirement ready in a few more decades, and some assets to leave to my children to make their lives slightly easier when I ultimately pass away. I guess I'd like to have more money, but it's not a burning desire and I don't see a path to it that doesn't risk either quality of life, lots of stress, or both.
  - wp381640 6y ago
    3) get a job at the startup
- tofuahdude 6y ago
  Sounds like you should be a VC!
H8crilA 6y ago
I am really curious as to what their spend looks like. Is it going to be the SV usual "exactly every extra dollar is spent on marketing" type of a deal? They probably don't need to do that.
- doanerock 6y ago
  The s-1 should have all that information.
  - H8crilA 6y ago
    Yup, looking forward to the income statement. And not just the spend, it would be interesting to see how much do they earn from idle cash vs commissions. Taking spread on idle cash vs money markets / fed funds is actually the main source of revenue for many brokerages. Balance sheet may be interesting too. Are they "invested" in any of the cryptos? Also, is the USDC on their balance sheet, and even if not (I'm guessing not) does USDC carry (in any shape or form) Coinbase's credit risk? Finally it would be interesting to see if there are any ongoing regulatory/litigation threats that we haven't heard about yet. And yes, rev growth, yada yada.
JoshTko 6y ago
Argument in investing in Coinbase has seemingly decreased over time. Few users actually care about owning bitcoin in a true bitcoin wallet. Other apps such as Robinhood, and Cash app have easier UI. It's unclear where Coinbase will get long term growth.
- deleted 6y ago
  [deleted]
- Dirlewanger 6y ago
  >It's unclear where Coinbase will get long term growth. By being the easiest cryptocurrency broker to use, by far. By being based in the US, and not in some SEA country (not saying that's inherently bad, but I'd rather keep my money in the US if at all possible). They even have an insurance policy for everything on their platform. Let's see the Binances of the world provide that.
  - astrange 6y ago
    They’re definitely one of the easiest if you actually want to do accounting and tax reporting properly. Decentralized exchanges don’t make it easy to get transactions off of and non-US exchanges have to be reported as foreign bank accounts.
    - Scoundreller 6y ago
      I’ve heard some aggressive interpretations that your personal Bitcoin wallet could be reportable as a foreign asset by saying that Bitcoin is in the cloud, not anyone country. Saying your keys are in the USA is kinda like saying your Swiss bank account’s login and password are in the USA. If that Swiss bank account is still reportable, why not your Bitcoin too? What matters is where the asset is, not where you can control it from.
  - hnracer 6y ago
    The latter is largely due to regulatory capture, US customers being banned from Asian exchanges due to US regulations. Almost nobody outside the US actually prefers Coinbase, the fees and liquidity is just much worse. The volumes on Binance speak for itself.
deleted 6y ago
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doanerock 6y ago
Is this just me or is this an oxymoron having a public announcement for a confidential submission.
- riffraff 6y ago
  that is funny, but I think the point is that the contents are confidential, not the fact that it exists. E.g. if I tell you "I know a secret" you still don't know what it is, even if you know it exists.
- throwaway122378 6y ago
  The other oxymoron is a crypto platform issues traditional stock
modeless 6y ago
I wonder if they will be traded exclusively on a traditional exchange like Nasdaq or NYSE. It would be disappointing if they couldn't do some kind of token thing so their shares could be traded with their own technology.
- vmception 6y ago
  Uh... you can't seriously want that? Trading crypto-securities or securities tokens requires completely redundant unnecessary infrastructure, being run by multiple firms registered with various regulators, and then lack liquidity as not only are the custody regulations unclear, FINRA is completely stonewalling any clarity or approvals, while the concept also lacks product market fit because nobody - market makers, investors - gives a crap about it, let alone the limited throughput of any mature enough settlement later. There is no point in doing that when everyone else can just go anonymous and list directly on Uniswap in 30 seconds. It's just utterly silly trying to shoehorn a compliant offering into that mess.
  - modeless 6y ago
    I don't plan to buy Coinbase stock, so in that sense it doesn't matter to me at all. But I'm pretty sure Coinbase's customers care. I doubt anyone would want them to trade exclusively as a token, but maybe they could do some shares on Nasdaq and some in token form. If anyone would figure out the regulatory hurdles for that, it's Coinbase. Their whole business model is being the most regulated and rule-following bridge between traditional finance and cryptocurrencies.
    - vmception 6y ago
      Which is exactly why there is no product market fit for that. Nobody wants to use that, a couple ideological enthusiasts want to see it being pursued, but nobody actually wants this. Just because you can doesn't mean you should.
      - modeless 6y ago
vmception 6y ago
When the share market is hot, sell shares. When the credit market is hot, issue debt. When the consumer spending is hot, sell more product. Many people don't get this, specifically that this concept is not married to any particular entrepreneurial idea, and many founders are following these financial axioms, not product line passions. Way to go Coinbase for getting the ducks in a row.
- jariel 6y ago
  Most startups are not at liberty to time the market over said horizons and are generally in no position to take on debt. It's more like 'our chances at IPO are always scary, if there ever comes a clear window to do it then DO IT'. It's hot, so strike now. That's mostly it.
  - vmception 6y ago
    But even after being publicly traded, doing a secondary share offering and dumping it right into the public market is best done when people are FOMOing shares for no reason. You can make a few billion dollars with no effort, owe nobody, and completely mitigate dilution because people were already clamoring for shares, selling into liquidity. Of course if you were issuing dividends those would be diluted until earnings caught up, but, lol dividends. Buybacks all the way.
- Melting_Harps 6y ago
  > Way to go Coinbase for getting the ducks in a row. See: MBA-ization in action.
cft 6y ago
Today's volume on Coinbase pro exchange is 45000 BTC. That's 1m in fees
DSingularity 6y ago
How long does it usually take from submission to actual IPO?
- newguy1234 6y ago
  few months
- chrisked 6y ago
  I assume 12 to 16 weeks. Typically it takes the SEC 3-4 weeks to provide initial comments on the S-1 filing. At that point, Coinbase and its advisors are responsible for addressing the comments. Then the feedback loop begins.
chrisked 6y ago
Curious if or how Coinbase Ventures will be described or valued in the S-1 filing. Does someone know if this will be in the filing? They started corporate development very early in their journey. Portfolio here: (https://ventures.coinbase.com/ https://ventures.coinbase.com/)
janandonly 6y ago
The HN frontpage is void of any mentioning of bitcoin braking this weeks all time high, but this one Bitcoin company makes it to #14.... how?
- 0goel0 6y ago
  Only one of those is an acceptable circlejerk here
- chrisked 6y ago
  No. Bitcoin reaching ATH was on the front page with over 400 comments: https://news.ycombinator.com/item?id=25443489 https://news.ycombinator.com/item?id=25443489
yalogin 6y ago
No one cares about the viability, future growth prospects, YoY growth prospects etc in this market. People seem to just want to throw money at everything. It would be foolish not to rake it in. Coinbase is doing the right thing. Every startup should go public now if they can, even more so if its a money losing one. Lot of irrationality in the market right now.
- Melting_Harps 6y ago
  > No one cares about the viability, future growth prospects, YoY growth prospects etc in this market. People seem to just want to throw money at everything. It would be foolish not to rake it in. Coinbase is doing the right thing. Every startup should go public now if they can, even more so if its a money losing one. Lot of irrationality in the market right now. When you realized that Silicon valley had became more about further allowing this kind of reckless financial bacchanal instead of creating actual problem solving businesses, were you equally as disappointed in the entire 'start up world' as I was? As a Californian with roots in the Valley I think you've just encapsulated what I think went entirely wrong with the SV mentality in my lifetime, and why I think its probably best the mass exodus happens as it may have a chance to re-create itself as a hub of actual innovation instead of making it a hotbed of buzz word laden, horrible named companies with no real business model to speak of in order to get a seat at the trough of cheap hot money in the Market created by the State?
  - yalogin 6y ago
    That was intended as a sarcastic and introspective statement, I might not have achieved it though. I dislike the startup scene too
    - Melting_Harps 6y ago
      > That was intended as a sarcastic and introspective statement, I might not have achieved it though. I dislike the startup scene too You know what they say, behind every joke is some shred of truth; but I don't dislike the startup scene per se, I do however detest what its morphed into these last 2 decades and how they conceal themselves as people wanting to 'make the World a better place' or act as 'disrupters' when in reality they are just playing the game that diverts funding away from actual solution based startups to the sexier sounding pointless and into their own pockets and they almost always have those qualities you listed with just the right connections to make it happen. I didn't want funding for my startup in fintech which is why I preferred being out of the Bay area after one summer in Sunnyvale, as it meant losing control of operations and we were in uncharted territory that would eventually lead to a watershed moment in legislation; but being forced to listen to a few investor's meetings after listening to lobbyists and politicians hours earlier I quickly realized what a waste of talent and resources this system is. And how both systems have the same incentives misaligned and create the same end result: massive waste.
supernova87a 6y ago
"Announces" + "confidential". Does anyone else find that amusing?
Melting_Harps 6y ago
Maybe they should focus on making sure their exchange doesn't crash every time the price spikes, or actually get to the long list of people they simply locked out of their accounts instead going for another cash grab. Coinbase is the the bane of the bitcoin ecosystem, in incompetence and shady practices. The only thing they haven't surpassed them is in lost coins, which still remains to be seen given how much they hold in custody for their customer base. > Do you have $100M to invest? The rules are completely different for institutional investors and high-net-worth individuals. Thanks YC for helping re-create the same BS that plagues the fiat World and its horrid corruption based on class and net-worth! Which is exactly what we sought to overthrow with Bitcoin. But... could we really expect any different when its founders are ex-Goldman Sachs? Edit: Keep down voting, but its right there in the Genesis Block.
hnracer 6y ago
Coinbase effectively has regulatory capture when it comes to the actual trading and speculation business (not custody). All traders prefer the lower fee derivative exchanges for speculation and hedging such as Huobi, Okex, Bitmex and even Binance for spot. Just compare the volumes. But US customers are locked out.

182 points by sinak 6y ago

This is a no-brainer with the huge run up in crypto that in the last boom was a huge profit inducer for Coinbase. Growth rates will also look great QoQ and YoY. With the fed balance sheet growing and the current revenue multiples small-mid cap tech stocks are receiving, they should be able to raise substantially more money than previously expected. It'll be interesting to see how much they expect to raise and of course their actual financials.

BryanBeshore 6y ago

I really wish more startups (if you can call them that at this stage) would go public earlier. There are so many companies I'd love to invest in at much earlier in their life. Coinbase is one of them for sure.

xiphias2 6y ago
Is there any reason to invest in it instead of jusr buying Bitcoin? I remember the ,,thin protocol vs thick protocol'' comparisions that said that for Internet it was worth investing in the companies over the internet, as with Bitcoin, just buying it can give a better return.
- sna1l 6y ago
  If another cryptocurrency rises to overtake Bitcoin, or even just grow larger, Coinbase will profit from that (assuming they support it) vs Bitcoin.
  - xiphias2 6y ago
    Bitcoin was made more and more secure over 10 years by disabling every feature that was not necessary to make it a digital store of value (like addition/substraction as they could overflow). If there are new ways to take away even more features from it, I'm not sure why they couldn't be taken away from Bitcoin as well to improve its security. Ethereum is a complementary to Bitcoin that's a more complex and less secure, less scarce store of value, and it's much more about running complex financial contracts. As these protocols have strong network effects that give their value, it's really hard to just ,,overtake'' them.
- ve55 6y ago
  Coinbase is more about the ecosystem than BTC itself. It's likely that BTC doing well is good for Coinbase, yes, but they stand to benefit from many other things, including other cryptocurrencies, more users adopting it (while the price may not increase), and other areas like custody services, decentralized finance services, and whatever other products they're still working on. Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on.
  - Melting_Harps 6y ago
    > Coinbase is more about the ecosystem And making it worse for people who simply don't know any better and catering to high-net worth people? Amazing business model. > Ideally (from the perspective of Coinbase) they end up offering an absurdly broad range of services to consumers in the entire sphere of cryptocurrency, similar to how some banks don't just let you hold money with them, but may offer 10 different services as well, from exchange to lending to credit to trading and so on. So, they're a bank? The very incarnation of Bitcoin's persona non grata ever there ever was one. The apologists around here trying to suck off YC and VC money teet may be more complaint, but I hope this new wave of customers goes to Square/CASH (an easier transition since so many already have it on their phones) in order to steer them to companies that do actual meaningful work in this ecosystem, instead of act as a parasite as Armstrong and Coinbase do.
    - xiphias2 6y ago
      We need companies like Coinbase, I think they provide great value, although what they did with the BCH push and trying to centralize Bitcoin was a huge overreach. Bitcoin is stronger than the current financial system, so I'm not afraid of companies that bridge the two systems. Personally I stay with Bitcoin, as it has a monopoly position, unlike Coinbase that has great competitors for all their important products at this point.
      - 6y ago
- gruez 6y ago
  > Is there any reason to invest in it instead of just buying Bitcoin? "In a gold rush, sell shovels"
- kylebenzle 6y ago
  Yes! Bitcoin (the BTC chain) got it's GitHub repo hijacked years ago by corporate interests and the company Blockstream. The whole concept is a dead end and they are actively trying to push people into using their "second layer" solutions to the congestion and problems they have introduced. People like Greg Maxwell and Adam Back were able to kick out the original maintainers and are hell bent on making Bitcoin not work. Bitcoin Cash is the closest thing to "Bitcoin" now but Blockstream employees an army of Twitter and Reddit trolls to block any real discussion. Greg is basically a one-man-army himself at this point.
  - cheaprentalyeti 6y ago
    I just checked... it's about three to four years post-fork, and the size of the "Bitcoin" blockchain (as you call it) is (minus indexes) about 315 Gb. The size of the Bitcoin Cash blockchain is roughly 170Gb. I don't know what it was when they forked, but it should have been the same size. The people you accuse of hijacking Bitcoin seem to have a much higher transaction rate since the fork than the Bitcoin Cash team has achieved.
ve55 6y ago
Going public comes with a lot of work, expectations, obligations, and has a high requirement for corporate maturity. It's not easy, not always desirable, and it's definitely not feasible to do early on most of the time. I think what we actually want is the ability for us normal people to invest in private companies more easily, rather than for private companies to become public more easily. This is difficult partially due to the SEC and partially due to historic reasons for how private equity is generally allocated and traded, but I'm hoping it gets better some time. But I share the sentiment, I'm continually disappointed when there's a company I really want to invest in, but I know that I won't get a chance to buy it until 5 years later when it has already 100x'd and then just gets IPO dumped to retail, becoming more of a short-term casino (e.g. see all recent tech IPOs) instead of long-term bet placed intelligently early-on in the race. If I could purchase shares in anything from Stripe to Discord to even Chik-fil-A (not to mention a certain 10 or so certain YC companies...), I would in a heartbeat (and I'd be willing to pay a premium for this too!), but the privilege likely won't be given to me until I no longer desire it.
- ericd 6y ago
  Are you familiar with EquityZen and Forge? If you're accredited, they can make it feasible to invest in a number of private companies. Companies can make that difficult by exercising their ROFR consistently, but many don't.
  - doanerock 6y ago
    Wait can I really invest in stripe and buy shares before they go public using EquityZen? Is this correct?
    - ericd 6y ago
      AFAICT Stripe is one of those that aggressively ROFRs. I’ve been trying to invest in them for a while, but no luck.
  - ve55 6y ago
    It's an option to note, I haven't used them as I'm not sure I'd have a good chance of being able to get what I want (since obviously there has to be a seller for me to buy), and the fees also seem pretty notable (5%, and/or up to 2% annual), maybe with some other potential issues of distribution/ownership (it seems it's not equivalent to owning the shares, but owning part of another entity that does own the shares). But, it may be a lot nicer than nothing for some, so thanks for reminding me of it.
jtsiskin 6y ago
They don't want to. If you think they will still grown, I'm sure the owners do as well. They don't benefit from selling at a lower price than they think they will eventually, unless they need the cash. But if they need the cash, getting it from a single source like a VC comes with many other benefits. The only way it would work out for them is if 'going public' would give them significantly more money per share than a VC would. Which I guess may be possible
jedberg 6y ago
They used to go public sooner, before Sarbanes-Oxley (SOX). That law made it so onerous to be a public company that most companies avoid it for as long as possible now. And SOX was born because of Enron. So blame Enron for this trend.
centimeter 6y ago
The extreme amount of regulation around becoming a publicly traded company makes this infeasible except for large, mature companies that don't really have much asymmetric upside available anymore. These regulations were created mostly in the name of protecting "mom-and-pop" investors, but the net effect has mostly been to shut "mom and pop" out of the most lucrative investments. This might or might now be a good thing, depending on how valuable you think it is to decrease variance for "unsophisticated" investors.
ineedasername 6y ago
You can invest: 1) Indirectly: Find a publicly traded VC firm that owns a piece of the startup(s) you like, and invest in them. You'll benefit from the upside if those startups do well, and be buffered from the downside through the VC firm's diversification. 2) Directly: There's a few ways to invest through secondary markets. Sharepost & EquityZen provide some access in this area, possible others as well. If you're interested in Coinbase in particular, EquityZen has you covered: https://equityzen.com/listings/?q=coinbase https://equityzen.com/listings/?q=coinbase
- electriclove 6y ago
  Have you done either? What was the experience like?
  - ineedasername 6y ago
    Have you done either Not at all, I just like to follow the industry. It's a fascinating time to be a spectator from the sidelines. I'm perfectly happy with the "aggressive" setting on my retirement fund, paying 0.08% annual fee (that's $0.80 per $1,000) with an average return of 7%-10% over the last 20 years. I'll wind it down to less aggressive as I get older. Apart from that, I have little trust in myself to, on average, make decisions that will outperform the above. My tolerance for risk of that sort is pretty low, and I'm not particularly motivated by money beyond the comfortable lifestyle I have now: It's zero debt, will see college tuition paid for my 3 kids, a reasonable retirement ready in a few more decades, and some assets to leave to my children to make their lives slightly easier when I ultimately pass away. I guess I'd like to have more money, but it's not a burning desire and I don't see a path to it that doesn't risk either quality of life, lots of stress, or both.
- wp381640 6y ago
  3) get a job at the startup
tofuahdude 6y ago
Sounds like you should be a VC!

H8crilA 6y ago

I am really curious as to what their spend looks like. Is it going to be the SV usual "exactly every extra dollar is spent on marketing" type of a deal? They probably don't need to do that.

doanerock 6y ago
The s-1 should have all that information.
- H8crilA 6y ago
  Yup, looking forward to the income statement. And not just the spend, it would be interesting to see how much do they earn from idle cash vs commissions. Taking spread on idle cash vs money markets / fed funds is actually the main source of revenue for many brokerages. Balance sheet may be interesting too. Are they "invested" in any of the cryptos? Also, is the USDC on their balance sheet, and even if not (I'm guessing not) does USDC carry (in any shape or form) Coinbase's credit risk? Finally it would be interesting to see if there are any ongoing regulatory/litigation threats that we haven't heard about yet. And yes, rev growth, yada yada.

JoshTko 6y ago

Argument in investing in Coinbase has seemingly decreased over time. Few users actually care about owning bitcoin in a true bitcoin wallet. Other apps such as Robinhood, and Cash app have easier UI. It's unclear where Coinbase will get long term growth.

deleted 6y ago
[deleted]
Dirlewanger 6y ago
>It's unclear where Coinbase will get long term growth. By being the easiest cryptocurrency broker to use, by far. By being based in the US, and not in some SEA country (not saying that's inherently bad, but I'd rather keep my money in the US if at all possible). They even have an insurance policy for everything on their platform. Let's see the Binances of the world provide that.
- astrange 6y ago
  They’re definitely one of the easiest if you actually want to do accounting and tax reporting properly. Decentralized exchanges don’t make it easy to get transactions off of and non-US exchanges have to be reported as foreign bank accounts.
  - Scoundreller 6y ago
    I’ve heard some aggressive interpretations that your personal Bitcoin wallet could be reportable as a foreign asset by saying that Bitcoin is in the cloud, not anyone country. Saying your keys are in the USA is kinda like saying your Swiss bank account’s login and password are in the USA. If that Swiss bank account is still reportable, why not your Bitcoin too? What matters is where the asset is, not where you can control it from.
- hnracer 6y ago
  The latter is largely due to regulatory capture, US customers being banned from Asian exchanges due to US regulations. Almost nobody outside the US actually prefers Coinbase, the fees and liquidity is just much worse. The volumes on Binance speak for itself.

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doanerock 6y ago

Is this just me or is this an oxymoron having a public announcement for a confidential submission.

riffraff 6y ago
that is funny, but I think the point is that the contents are confidential, not the fact that it exists. E.g. if I tell you "I know a secret" you still don't know what it is, even if you know it exists.
throwaway122378 6y ago
The other oxymoron is a crypto platform issues traditional stock

modeless 6y ago

I wonder if they will be traded exclusively on a traditional exchange like Nasdaq or NYSE. It would be disappointing if they couldn't do some kind of token thing so their shares could be traded with their own technology.

vmception 6y ago
Uh... you can't seriously want that? Trading crypto-securities or securities tokens requires completely redundant unnecessary infrastructure, being run by multiple firms registered with various regulators, and then lack liquidity as not only are the custody regulations unclear, FINRA is completely stonewalling any clarity or approvals, while the concept also lacks product market fit because nobody - market makers, investors - gives a crap about it, let alone the limited throughput of any mature enough settlement later. There is no point in doing that when everyone else can just go anonymous and list directly on Uniswap in 30 seconds. It's just utterly silly trying to shoehorn a compliant offering into that mess.
- modeless 6y ago
  I don't plan to buy Coinbase stock, so in that sense it doesn't matter to me at all. But I'm pretty sure Coinbase's customers care. I doubt anyone would want them to trade exclusively as a token, but maybe they could do some shares on Nasdaq and some in token form. If anyone would figure out the regulatory hurdles for that, it's Coinbase. Their whole business model is being the most regulated and rule-following bridge between traditional finance and cryptocurrencies.
  - vmception 6y ago
    Which is exactly why there is no product market fit for that. Nobody wants to use that, a couple ideological enthusiasts want to see it being pursued, but nobody actually wants this. Just because you can doesn't mean you should.
    - modeless 6y ago

vmception 6y ago

When the share market is hot, sell shares. When the credit market is hot, issue debt. When the consumer spending is hot, sell more product. Many people don't get this, specifically that this concept is not married to any particular entrepreneurial idea, and many founders are following these financial axioms, not product line passions. Way to go Coinbase for getting the ducks in a row.

jariel 6y ago
Most startups are not at liberty to time the market over said horizons and are generally in no position to take on debt. It's more like 'our chances at IPO are always scary, if there ever comes a clear window to do it then DO IT'. It's hot, so strike now. That's mostly it.
- vmception 6y ago
  But even after being publicly traded, doing a secondary share offering and dumping it right into the public market is best done when people are FOMOing shares for no reason. You can make a few billion dollars with no effort, owe nobody, and completely mitigate dilution because people were already clamoring for shares, selling into liquidity. Of course if you were issuing dividends those would be diluted until earnings caught up, but, lol dividends. Buybacks all the way.
Melting_Harps 6y ago
> Way to go Coinbase for getting the ducks in a row. See: MBA-ization in action.

cft 6y ago

Today's volume on Coinbase pro exchange is 45000 BTC. That's 1m in fees

DSingularity 6y ago

How long does it usually take from submission to actual IPO?

newguy1234 6y ago
few months
chrisked 6y ago
I assume 12 to 16 weeks. Typically it takes the SEC 3-4 weeks to provide initial comments on the S-1 filing. At that point, Coinbase and its advisors are responsible for addressing the comments. Then the feedback loop begins.

chrisked 6y ago

Curious if or how Coinbase Ventures will be described or valued in the S-1 filing. Does someone know if this will be in the filing? They started corporate development very early in their journey. Portfolio here: (https://ventures.coinbase.com/ https://ventures.coinbase.com/)

janandonly 6y ago

The HN frontpage is void of any mentioning of bitcoin braking this weeks all time high, but this one Bitcoin company makes it to #14.... how?

0goel0 6y ago
Only one of those is an acceptable circlejerk here
chrisked 6y ago
No. Bitcoin reaching ATH was on the front page with over 400 comments: https://news.ycombinator.com/item?id=25443489 https://news.ycombinator.com/item?id=25443489

yalogin 6y ago

No one cares about the viability, future growth prospects, YoY growth prospects etc in this market. People seem to just want to throw money at everything. It would be foolish not to rake it in. Coinbase is doing the right thing. Every startup should go public now if they can, even more so if its a money losing one. Lot of irrationality in the market right now.

Melting_Harps 6y ago
> No one cares about the viability, future growth prospects, YoY growth prospects etc in this market. People seem to just want to throw money at everything. It would be foolish not to rake it in. Coinbase is doing the right thing. Every startup should go public now if they can, even more so if its a money losing one. Lot of irrationality in the market right now. When you realized that Silicon valley had became more about further allowing this kind of reckless financial bacchanal instead of creating actual problem solving businesses, were you equally as disappointed in the entire 'start up world' as I was? As a Californian with roots in the Valley I think you've just encapsulated what I think went entirely wrong with the SV mentality in my lifetime, and why I think its probably best the mass exodus happens as it may have a chance to re-create itself as a hub of actual innovation instead of making it a hotbed of buzz word laden, horrible named companies with no real business model to speak of in order to get a seat at the trough of cheap hot money in the Market created by the State?
- yalogin 6y ago
  That was intended as a sarcastic and introspective statement, I might not have achieved it though. I dislike the startup scene too
  - Melting_Harps 6y ago
    > That was intended as a sarcastic and introspective statement, I might not have achieved it though. I dislike the startup scene too You know what they say, behind every joke is some shred of truth; but I don't dislike the startup scene per se, I do however detest what its morphed into these last 2 decades and how they conceal themselves as people wanting to 'make the World a better place' or act as 'disrupters' when in reality they are just playing the game that diverts funding away from actual solution based startups to the sexier sounding pointless and into their own pockets and they almost always have those qualities you listed with just the right connections to make it happen. I didn't want funding for my startup in fintech which is why I preferred being out of the Bay area after one summer in Sunnyvale, as it meant losing control of operations and we were in uncharted territory that would eventually lead to a watershed moment in legislation; but being forced to listen to a few investor's meetings after listening to lobbyists and politicians hours earlier I quickly realized what a waste of talent and resources this system is. And how both systems have the same incentives misaligned and create the same end result: massive waste.

supernova87a 6y ago

"Announces" + "confidential". Does anyone else find that amusing?

Melting_Harps 6y ago

Maybe they should focus on making sure their exchange doesn't crash every time the price spikes, or actually get to the long list of people they simply locked out of their accounts instead going for another cash grab. Coinbase is the the bane of the bitcoin ecosystem, in incompetence and shady practices. The only thing they haven't surpassed them is in lost coins, which still remains to be seen given how much they hold in custody for their customer base. > Do you have $100M to invest? The rules are completely different for institutional investors and high-net-worth individuals. Thanks YC for helping re-create the same BS that plagues the fiat World and its horrid corruption based on class and net-worth! Which is exactly what we sought to overthrow with Bitcoin. But... could we really expect any different when its founders are ex-Goldman Sachs? Edit: Keep down voting, but its right there in the Genesis Block.

hnracer 6y ago

Coinbase effectively has regulatory capture when it comes to the actual trading and speculation business (not custody). All traders prefer the lower fee derivative exchanges for speculation and hedging such as Huobi, Okex, Bitmex and even Binance for spot. Just compare the volumes. But US customers are locked out.