Skybound Entertainment’s Crowdfunding Effort Raised $12 Million. Investors Wonder When They’ll Get Paid

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

Skybound Entertainment’s Crowdfunding Effort Raised $12 Million. Investors Wonder When They’ll Get Paid
Photo: Skybound Entertainment

Last month, fans of one of science fiction’s most popular franchises were offered an enticing proposition: the opportunity to invest directly in Skybound Entertainment, the owner of “The Walking Dead.”


Since the Jan. 23 announcement, the offering has netted Skybound $12.2 million, surpassing its minimum funding goal of $10,000 in less than a month. The company could raise up to $75 million from the crowdfunding effort.

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

“$500 for a single share seems extremely excessive, even if the company succeeds tremendously,” potential investor Steve Finley noted in a Republic Q&A thread. “Each stock would have to eventually be worth thousands to justify a current investment at $500 per unit in that case.”

As it currently stands, however, there’s no timeline for a liquidity event. This means investors who have bought into Skybound’s offering have no way to sell their shares, for now.

That said, Skybound CEO David Alpert told dot.LA the goal is to allow individual retail investors and comics fans to invest directly in content they love. “We wouldn't be anything if we didn't have our fans, so the goal for us is we want to actually reward our fans by giving them access to the same upside that a creator should get,” Alpert said. “We wanted to literally bring them inside of our company.”

The media company is conducting this Regulation A+ offering through Republic, a platform for investors both institutional and retail. Over 4,800 investors have contributed so far. This crowdfunding follows a VC investing round Skybound completed last May, though it didn’t disclose how much it raised then.

So it makes sense why Alpert and his co-founder and co-chairman Jon Goldman (who co-founded the company alongside “Walking Dead” and “Invincible” creator Robert Kirkman in 2016) are embracing the global retail market as both a source of funding and a free endless hype train.

“We want to be [the] owner and control our own destiny more than we have in the past been able to,” Alpert explained. According to Skybound spokeswoman Hannah Cosgrove, buyers should be prepared to hold onto their units for at least three to five years.

Skybound CEO David Alpert. File:David Alpert SDCC.jpg - Wikimedia Commonscommons.wikimedia.org

In addition to both Skybound and investors on Republic, there’s also the issue of pricing – Skybound is only accepting minimum investments of $500. The company is offering membership units, not shares, since there can’t be stock because Skybound is not yet a public company. These membership units can be thought of as an equivalent to one share. Several investors have noted that $500 for one unit of stock is a steep price.

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

Sarkar said, “while it is true you're growing and your profitability is sound, I question your ability to give asymmetric returns to investors given that it is 500 USD a share.” Sarkar further noted that the stock price – once there is stock – would have to soar to $50,000 per share to see a 100% return and profit from their investment, which he added “seems unlikely.”

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

Still, Skybound’s destiny is directly tied to how well this offering does. The company reported net income of $9 million on $64 million in revenue in 2021, which it said represents a 50% annual growth rate since 2020. In 2021, $35 million of that was retail revenue, from sales of comics and other merchandise. Skybound said it expects to reach $105 million in revenue by this year.

But with 60 active comic titles and 16 new series published last year – plus a new season of its hit “Invincible” coming this year – it could be making far more.

One example of a property that did exceedingly well for Skybound and is a benchmark for future projects is “The Walking Dead,” which has lifetime revenues of $10 billion. But Skybound’s internal data reported only a $500 million valuation, and the company claimed it lost revenue through licensing franchise content to third parties. Potential investors asked the company about this, and one wondered, “will your royalty rate increase due to the success of Walking Dead?”

To that end, Alpert and Goldman said the goal is to have more control over its content going forward, and produce its own spinoff IP instead of handing it over to third parties.

For now, it seems Skybound’s focus is on mining for that new content, with the aim of finding franchises that can transcend mediums. It just invested in gaming studio Mega Cat and recently increased its stake in 5th Planet Games – and the cofounders told dot.LA more deals like that are to come (gaming represented roughly 80% of Skybound’s revenue in 2021).

“We’re committed to maximizing the value for our shareholders,” said Alpert. Goldman chimed in to explain potential options, noting, “we can sell the company. We could have a public offering, or we could bring in an additional future capital provider that buys out secondary shares, but it's no different than any other private company in the United States. All those options are on the table.”

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“Our True Primal Nature” Dictates What We Buy, Neuroscience-Based Marketing Firm Argues

Samson Amore

Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.

“Our True Primal Nature” Dictates What We Buy, Neuroscience-Based Marketing Firm Argues

At Super Bowl LVII, advertisers paid at least $7 million for 30–second ad spots, and even more if they didn’t have a favorable relationship with Fox. But the pricey commercials didn’t persuade everyone.

A recent report from advertising agency Kern and neuroscience marketing research outfit SalesBrain is attempting to answer that question using facial recognition and eye-tracking software.

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https://twitter.com/samsonamore
samsonamore@dot.la

Behind Her Empire: ComplYant Founder and CEO Shiloh Johnson on Helping Small Businesses

Yasmin Nouri

Yasmin is the host of the "Behind Her Empire" podcast, focused on highlighting self-made women leaders and entrepreneurs and how they tackle their career, money, family and life.

Each episode covers their unique hero's journey and what it really takes to build an empire with key lessons learned along the way. The goal of the series is to empower you to see what's possible & inspire you to create financial freedom in your own life.

Behind Her Empire: ComplYant Founder and CEO Shiloh Johnson on Helping Small Businesses

On this episode of Behind Her Empire, ComplYant founder and CEO Shiloh Johnson discusses her journey to building a multimillion dollar business and making knowledge of taxes more accessible.


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How Token and Tixr Plan To Take on Ticketmaster in L.A.

Andria Moore

Andria is the Social and Engagement Editor for dot.LA. She previously covered internet trends and pop culture for BuzzFeed, and has written for Insider, The Washington Post and the Motion Picture Association. She obtained her bachelor's in journalism from Auburn University and an M.S. in digital audience strategy from Arizona State University. In her free time, Andria can be found roaming LA's incredible food scene or lounging at the beach.

How Token and Tixr Plan To Take on Ticketmaster in L.A.
Evan Xie

When Taylor Swift announced her ‘Eras’ tour back in November, all hell broke loose.

Hundreds of thousands of dedicated Swifties — many of whom were verified for the presale — were disappointed when Ticketmaster failed to secure them tickets, or even allow them to peruse ticketing options.

But the Taylor Swift fiasco is just one of the latest in a long line of complaints against the ticketing behemoth. Ticketmaster has dominated the event and concert space since its merger with Live Nation in 2010 with very few challengers — until now.

Adam Jones, founder and CEO of Token, a fan-first commerce platform for events, said he has the platform and the tech ready to take it on. First and foremost, with Token, Jones is creating a system where there are no queues. In other words, fans know immediately which events are sold out and where.

“We come in very fortunate to have a modern, scalable tech stack that's not going to have all these outages or things being down,” Jones said. “That's step one. The other thing is we’re being aggressively transparent about what we’re doing and how we’re doing it. So with the Taylor Swift thing…you would know in real time if you actually have a chance of getting the tickets.”

Here’s how it works: Users register for Token’s app and then purchase tickets to either an in-person event, or an event in the metaverse through Animal Concerts. The purchased ticket automatically shows up in the form of a mintable NFT, which can then be used toward merchandise purchases, other ticketed events or, Adams’s hope for the future — external rewards like airline travel. The more active a user is on the site, the more valuable their NFT becomes.

Ticketmaster has dominated the music industry for so long because of its association with big name artists. To compete, Token is working on gaining access to their own slew of popular artists. They recently entered into a partnership with Animal Concerts, a live and non-live event experiences platform that houses artists like Alicia Keys, Snoop Dogg and Robin Thicke.

“You'll see they do all the metaverse side of the house,” Jones said. “And we're going to be the [real-life] web3 sides of the house.”

In addition, Token prides itself on working with the artists selling on their platform to set up the best system for their fanbase, devoid of hefty prices and additional fees — something Ticketmaster users have often complained about. Jones believes where Ticketmaster fails, Token thrives. The app incentivizes users to share more data about their interests, venues and artists by operating on a kind of points system in the form of mintable NFTs.

“We can actually take the dataset and say there’s 100 million people in the globe that love Taylor Swift, so imagine she’s going on tour and we ask [the user], ‘Would you go to see her in Detroit?’ And imagine this place has 30,000 seats, but 100,000 people clicked ‘yes,’” he explained. “So you can actually inform the user before anything even happens, right? About what their options are and where to get it.”

Tixr, a Santa-Monica based ticketing app, was founded on the idea that modern ticketing platforms were “living in the legacy of the past.” They plan to attract users by offering them exclusive access to ticketed events that aren’t in Ticketmaster’s registry.

“It melts commerce that's beyond ticketing…to allow fans to experience and purchase things that don't necessarily have to do with tickets,” said Tixr CEO and Founder Robert Davari. “So merchandise, and experiences, and hospitality and stuff like that are all elegantly melded into this one, content driven interface.”

Tixr sells tickets to exclusive concerts like a Tyga performance at a night club in Arizona, general in-person festivals like ComplexCon, and partners with local vendors like The Acura Grand Prix of Long Beach to sell tickets to the races. Plus, Davari said it’s equipped to handle high-demand, so customers aren’t spending hours waiting in digital queues.

Like Token, Tixr has also found success with a rewards program — in the form of fan marketing.

“There's nothing more powerful in the core of any event, brand, any live entertainment, [than] the community behind it,” Davari said. “So we build technology to empower those fans and to reward them for bringing their friends and spreading the word.”

Basically, if a user gets a friend to purchase tickets to an event, then the original user gets rewarded in the form of discounts or upgrades.

Coupled with their platforms’ ability to handle high-demand events, both Jones and Davari believe their platforms have what it takes to take on Ticketmaster. Expansion into the metaverse, they think, will also help even the playing field.

“So imagine you can't go to Taylor Swift,” Jones said. “What if you could purchase an exclusive to actually go to that exact same show over the metaverse? An artist’s whole world can expand past the stage itself.”

With the way ticketing for events works now, obviously not everyone always gets the exact price, venue or date they want. There are “winners and losers.” Jones’s hope is that by expanding beyond in-person events, there can be more winners.

“If there’s 100,000 people who want to go to one show and there's 37,000 seats, 70,000 are out,” he said. “You can't fight that. But what we can do is start to give them other opportunities to do things in a different way and actually still participate.”

Jones and Davari both teased that their platforms have some exciting developments in the works, but for now both Token and Tixr are set on making their own space within the industry.

“We simply want to advance this industry and make it more efficient and more pleasurable for fans to buy,” Davari said. “That's it.”

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