Skybound Entertainment’s crowdfunding campaign raised $12 million.Investors want to know when they will get paid

Last month, fans of one of science fiction’s most beloved franchises were offered a tantalizing proposition: invest directly in Skyline Entertainmentowner of The Walking Dead.

The offering has benefited Skybound since its January 23 announcement $12.2 million, exceeding its minimum funding goal of $10,000 in less than a month.Companies can raise up to $75 million from crowdfunding effort.

But while this investment round is sure to enrich Skybound in the short term, some fans have raised questions about when they’ll be able to recoup their investment.

“Even if the company is wildly successful, $500 per share seems like too much,” potential investor Steve Finley said in a note. republic quiz topic“In this case, each stock would ultimately have to be worth thousands of dollars to justify the current $500 per share investment.”

For now, however, there is no timeline for liquidity events. This means that investors who bought Skybound shares are currently unable to sell their shares.

That said, Skybound CEO David Alpert told dot.LA that the goal is for individual retail investors and comic book fans to invest directly in the content they love. “We’re nothing if we don’t have fans, so our goal is we want to really reward our fans by giving them the same benefits that creators deserve,” Alpert said. “We really want to bring them inside our company.”

media companies are doing this Regulation A+ by providing republic, a platform for institutional and retail investors. So far, more than 4,800 investors have contributed.The crowdfunding follows a round of VC funding from Skybound completed last maythough it did not say how much money it had raised at the time.

So it makes sense that Alpert and his co-founder Jon Goldman (who co-founded the company in 2016 with “The Walking Dead” and “Invincible” creator Robert Kirkman) would tap the global retail market as a source of both money and free money. The endless hype train.

“We want to be [the] Owning and controlling our own destiny is more possible than in the past,” Alpert explained. According to Skybound spokeswoman Hannah Cosgrove, buyers should be prepared to hold on to their units for at least three to three months. five years.

File: David Alpert SDCC.jpg – Wikimedia Commonscommons.wikimedia.org

In addition to investors on Skybound and Republic, there’s the issue of pricing — Skybound only accepts a $500 minimum investment. The company offers membership units, not shares, which cannot be had as Skybound is not yet a public company. These member units can be considered equivalent to one share. Some investors noticed that $500 for a unit of stock was an exorbitant price.

As potential investor Ritwik Sarkar said in a Republic thread, the share price is “pretty high”.

“While you’re certainly growing and profitable, at $500 per share, I question your ability to provide investors with an asymmetric return,” Sarkar said. They don’t have to soar to $50,000 a share to get a 100% return and profit on their investment, which “seems unlikely,” he added.

For context, Netflix is ​​one of the entertainment industry’s top public performers, trading for about $366 per share.

Still, Skybound’s fate is directly tied to the product’s performance. company newspaper 2021 revenue of $64 million and net income of $9 million, with a reported annual growth rate of 50% since 2020.$35 million of that by 2021 is retail revenue, from sales of comics and other merchandise. Skybound said it expects to generate $105 million in revenue this year.

But last year saw 60 active titles and 16 new series releases – plus a new season of its hit “Invincible” In this year – it may earn more.

The Walking Dead is an example of Skybound doing well and becoming a benchmark for future projects, with $10 billion in lifetime revenue. But Skybound’s internal figures put the valuation at just $500 million, and the company claims it loses revenue by licensing franchise content to third parties. Potential investors asked the company about this, and one wondered, “Will your royalty rate increase because of the success of The Walking Dead?”

To that end, Alpert and Goldman say the goal is to have more control over its content in the future and to produce its own spinoff IP, rather than handing it over to third parties.

Right now, Skybound’s focus appears to be on scooping up new content, with the aim of finding franchises that can transcend the medium.it just invested At game studio Mega Cat and recently increased its stake in 5th Planet Games – the co-founder told dot.LA more deals like this are coming (gamble approximately 80% of Skybound’s 2021 revenue).

“We are committed to maximizing value for our shareholders,” Alpert said. Goldman Sachs interjected to explain the potential options, noting, “We could sell the company. We could do a public offering, or we could bring in an additional provider of future capital to buy secondary stock, but that’s not like any other private company in the U.S.” It’s no different. All of these options are on the table.”