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FIG, Investing in Pop Culture, and Small Business

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Aug 25, 2010
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Grand opening, grand closing.

I was excited when FIG, a rival crowd-funding service to kickstarter catering exclusively to videogames and allows contributors to get a percentage of the game's profits, opened to the public today. Since the Veronica Mars success story, I've been secretly hoping for something similar for movies, but gaming was just as good.

So when you read the fine print at the bottom of FIG's page, it says:

The securities offerings posted on this site are only available to "Accredited Investors" and each investor will be required to provide supporting documentation evidencing their accredited status.

Ok. I'm thinking, cool! What does it take to become an accredited investor?
I don't make much money, and I'm older, with a freelance career, a family, and no real job security. The idea of finally being able to invest in projects that I believe in (sure, it's a gamble), sounds like something I can win at! I know the gaming industry pretty well, and it would be awesome of years of that knowledge and experience would be good for something, finally.

Unfortunately, the SEC requirements for becoming an accredited investor stopped the game full press.

Apparently, you have to make an income of $200k for two years straight prior to application (or $300k with spouse), or a net worth of over 1 MILLION dollars.

It's becoming obvious that, regardless of marketing spin, these systems aren't set up for those without incredible capital to ever get financial independence.

For the businessmen of GAF, what are the options for people that want to begin a small business, or invest in something to increase annual revenue? I've been following the long-term investment thread, but I'm looking for something that I can invest in now in order to pivot the direction things are headed toward now.

When I break down the numbers, even making 100.00 a day in passive income is life changing. I've saved up about 10k, but that's HARDLY enough to start any kind of business with. I thought FIG would be something worthwhile, but the rules of the country says otherwise...
 

DoktorEvil

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Dec 8, 2013
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For the businessmen of GAF, what are the options for people that want to begin a small business, or invest in something to increase annual revenue? I've been following the long-term investment thread, but I'm looking for something that I can invest in now in order to pivot the direction things are headed toward now.

When I break down the numbers, even making 100.00 a day in passive income is life changing. I've saved up about 10k, but that's HARDLY enough to start any kind of business with. I thought FIG would be something worthwhile, but the rules of the country says otherwise...

It's enough for a SBA loan maybe? https://www.sba.gov/ Have you ever ran a business before?

You need an exit strategy that would be something like: selling your business to people for 10-15x value.

Also, welcome to the world of finance. Accredited Investor have been a thing for a long, long time but Dodd Frank redefined it.
 
Aug 25, 2010
2,467
8
850
So Cal
www.blackbanditsho.com
Austin Walker of GiantBomb has posted an article on this. He suspects they are working towards utilizing the new Regulation A+ rules to let people who don't have crazy high income become accredited investors. Fingers crossed, I guess?

http://www.giantbomb.com/articles/fig-a-new-crowdfunding-platform-allows-qualified-i/1100-5260/

Yeah, Austin laid out a bunch of my fears going in. The movie and music industries are notorious for playing paper games as a way to get funny with money, and it's not uncommon for a company to change names or have contracts negotiated with a temporary company, only to sell the stake in the primary company and pay out as little as possible to investors and artists. It's a shell game.

Was hoping that wouldn't happen in the gaming space (or with the future Regulation A+), but something in my gut tells me that's naive thinking.

It's enough for a SBA loan maybe? https://www.sba.gov/ Have you ever ran a business before?

You need an exit strategy that would be something like: selling your business to people for 10-15x value.

Also, welcome to the world of finance. Accredited Investor have been a thing for a long, long time but Dodd Frank redefined it.

I've never run any business that made any kind of profit. This is a new world for me. I've run websites and helped manage a small company, but nothing that ever made any money. I didn't even know about exit strategies! I guess they don't show EVERYTHING on Shark Tank!
 

DoktorEvil

Banned
Dec 8, 2013
25,856
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I've never run any business that made any kind of profit. This is a new world for me. I've run websites and helped manage a small company, but nothing that ever made any money. I didn't even know about exit strategies! I guess they don't show EVERYTHING on Shark Tank!

What state are you located in? I'd familiarize yourself with your state's corporate laws and consult a corporate lawyer. Running an existing business model is much easier than trying to create one from scratch. That SBA site can teach you about most of the ins and outs of entrepreneurship. The rest will just come from industry-specific experience.

But I mean if you're interested in doing this:

The idea of finally being able to invest in projects that I believe in (sure, it's a gamble), sounds like something I can win at! I know the gaming industry pretty well, and it would be awesome of years of that knowledge and experience would be good for something, finally.

There isn't anything currently that will give you residual income from videogames unless you already make substantial income. Publishers are basically financiers with lawyers. Acting as a publisher expecting a return means you'd be under SEC scrutiny, thus the accredited investors part. It prevents so called wannabes out of an already unstable industry.

Maybe invest into some videogame securities? I mean, how committed are you to the idea of investing in videogame companies?

Investing in AMD as an example of being invested into videogames(AMD chips are used in consoles)
 
OP, there are a ton of different possible businesses you could set up that don't require a huge amount of capital. Why do you think you need so much?

Listen to some episodes of the Tropical MBA podcast.

I'm gonna blog about Fig today. Super interesting (I'm a game lawyer with a big interest in securities law).

Edit: Also, Fig allows you to back a project just like Kickstarter, as well. You just don't get the royalties on sales. The Giant Bomb article didn't seem to mention that, though I may have missed it.
 
Aug 25, 2010
2,467
8
850
So Cal
www.blackbanditsho.com
What state are you located in? I'd familiarize yourself with your state's corporate laws and consult a corporate lawyer. Running an existing business model is much easier than trying to create one from scratch. That SBA site can teach out about most of the ins and outs of entrepreneurship. The rest will just come from industry-specific experience.

But I mean if you're interested in doing this:



There isn't anything currently that will give your residual income from videogames unless you already make substantial income. Publishers are basically financiers with lawyers. Acting as a publisher expecting a return means you'd be under SEC scrutiny, thus the accredited investors part. It prevents so called wannabes out of an already unstable industry.

Maybe invest into some videogame securities? I mean, how committed are you to the idea of investing in videogame companies?

Investing in AMD as an example of being invested into videogames(AMD chips are used in consoles)

Well, I'm familiar with the gaming industry. figured it was a great place to start. That said, when I started the thread, it was meant as an avenue for Gaffers to talk business and investment. Didn't have to be gaming. Was hoping that it would be a free-flowing, inspirational, and informative discussion about generating income and thinking about making passive sustainable income on a micro-level.

The tips you've offered is a great start, though...
 

DoktorEvil

Banned
Dec 8, 2013
25,856
0
0
NYC, USA
OP, there are a ton of different possible businesses you could set up that don't require a huge amount of capital. Why do you think you need so much?

Listen to some episodes of the Tropical MBA podcast.

I'm gonna blog about Fig today.
Super interesting (I'm a game lawyer with a big interest in securities law).

Gamasutra on FIG

Choice quotes:

This is the "next iteration" of crowdfunding, says Bailey, and it's specifically catered to game developers. For example, the top of the page houses a nice, Steam-style gallery of images and videos; built into the site's design is a gauge that tells you where in the game development process (e.g. concept, alpha, beta) the project is.

By pairing up both reward ("back and you'll get the game and this T-shirt") and equity ("invest in the game and you'll get a portion of the proceeds") crowdfunding, Bailey hopes to create a mix that will help games that are "properly funded, budget-wise," and avoid the need to seek more external funding to complete a project, and situations where developers ask for less than they need to really complete a project just so they get something.

They don't mention SEC accredited investors comments anywhere, Hmm.

Well, I'm familiar with the gaming industry. figured it was a great place to start. That said, when I started the thread, it was meant as an avenue for Gaffers to talk business and investment. Didn't have to be gaming. Was hoping that it would be a free-flowing, inspirational, and informative discussion about generating income and thinking about making passive sustainable income on a micro-level.

The tips you've offered is a great start, though...

A business, while incredibly difficult at times, can be a great vehicle for both emotional and financial investment, provided your aim is to either sell to someone who can scale it up and make it into something bigger or to sell it off for substantial capital gains.

Investing in securities or in corporate debt can also provide substantial returns, but a lot of people aren't cut out for that. The stress of managing a portfolio becomes too much and as humans we have a bad tendency to overthink our picks. Mutual funds are also a good starting point for the new investor.

It really comes down to what your goals are as an investor.

I don't think GAF is necessarily the BEST place to talk about investing or business, considering how much of the site is consumer centric and based around tastes rather than ROI.
 
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