Skybound Entertainment, launched by The Walking Dead co-creator Robert Kirkman, revealed on Monday that it has started an investment campaign in which fans may own a piece of the blockbuster franchise and other intellectual properties. Republic, a crowdfunding app, is in charge of the campaign, which has already raised $12 million from nearly 5,000 investors during its quiet phase. Republic describes the campaign as one of its most successful to date.
Investing through Republic is not the same as purchasing stock in a public corporation. Investors are given a Crowd SAFE investment contract, which gives them a financial interest in the company, but that does not entitle them to dividends or other benefits that a public corporation may provide. However, if Skybound is purchased, goes public, or sells all of its assets, investors may get a return on their investment in the brand.
The organizers admit it’s a risky wager for your money, as Fast Company reports.
“This investment involves a high degree of risk,” reads the subscription agreement. “This investment is suitable only for persons that can bear the economic risk for an indefinite period of time and that can afford to lose their entire investment. Furthermore, investors must understand that their investment is illiquid and is expected to continue to be illiquid for an indefinite period of time. No public market exists for the units…and no public market is expected to develop following the offering.”
By illiquid, Republic means if you change your mind, you’re going to have a hard time getting that cash back. Stakes can’t be sold for at least a year—and there’s no guarantee anyone will want to buy it.
This sort of funding is known as a Regulation A+ offering. That’s basically an alternative to an IPO or other offering that lets companies avoid fully registering with the Securities and Exchange Commission, but still offer securities. Some companies use them to test the waters before a more formal offering, though that’s not the only use case.
Nonetheless, The Walking Dead, Amazon’s Invincible, and Skybound’s well over 150 other television and comic book titles have a devoted fan base— which is demonstrated by the $12 million in funding its received. Some of those fans may wish to invest in order to be more closely associated with those products. If so, they must pay at least $500 for each common interest share (and those shares cannot be fractionalized, thus they must invest in $500 increments).
“We’re so excited for this Regulation A+ offering, as the concept aligns with one of Skybound’s core values: connecting with fans,” said Skybound CEO David Alpert in a statement. “We believe that by empowering our creators to do what they do best, and inviting its superfans to be able to hold a stake in the content they’re passionate about, it’s a win-win for everyone.”
Sounds very similar to “stretch goals” in Indiegogo or Kickstarter campaigns in that the more you invest, the more “perks” you could receive. If you invest $5,000 in the company, you’ll receive a Skybound Universe beer stein along with your shares. Would that make you happy with your $5K investment?
Richard Meyer comments on this campaign with some interesting thoughts.
A tour of the company’s headquarters and their studios is available for a mere $100,000. And a $2 million investment will also bring you onto the red carpet at a future Skybound film or television release. Before the campaign ends on August 14, 2023, the firm hopes they can raise $75 million. They say that their pre-investment valuation is $500 million, although there was no indication that this was an audited assessment.
If you’re interested, check out the campaign here.
