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KickStarter Fig - a new equity-based crowdfunding platform - shut down, RIP

Kz3r0

Arcane
Joined
May 28, 2008
Messages
27,012
So have over $500,000 from interested investors, meanwhile not even 400 people want to back this thing?
"Hey BRO, this is the deal of the century BRO, I am giving you this opportunity BRO because you are my friend BRO, this is big BRO , very big, Bill Gates, Rockfeller BRO are all lined up to invest in this BRO, you should put your money in BRO while still you can BRO, I keeping a slot open BRO for you BRO, but the pressure is incredible BRO, it's now or never Bro."
 

Mustawd

Guest
Put together an FAQ for those codexers who can't into binessess:

1. Is what Fig doing legal? I thought they had to be a public company to sell shares...

Yes. companies who sale shares to the public must register with the SEC. However, there are a number of exceptions to these rules. The exception Fig is using is the JOBS act exception for both the accredited investors portion as well as the crowdfunding portion.

The JOBS Act requires the SEC to develop new rules permitting capital raising by “crowdfunding.” Crowdfunding is a means to raise money by attracting relatively small individual contributions from a large number of people. In recent years, crowdfunding websites have proliferated to raise funds for charities, artistic endeavors and businesses. These sites did not offer securities, such as an ownership interest or share of profits in a business; rather, money was contributed in the form of donations, or in return for the product being made. The JOBS Act creates an exemption from the registration requirements of the Securities Act that provides for a form of securities crowdfunding.

Under JOBS Act crowdfunding, companies will be limited to raising $1 million in any 12-month period. Companies cannot crowdfund on their own, but will have to engage an intermediary that is registered with the SEC. These intermediaries will be subject to a number of requirements.

source: http://www.sec.gov/info/smallbus/qasbsec.htm


2. So does that mean I own shares like in the stock market?

Not really. There are a variety of ways to participate in Private Equity...direct ownership, partnership, non-voting shares, etc. However, the model Fig seems to be using is one in which money is pooled from a variety of investors by PE fund managers, put into a time limited fund, and then invested by an investment fund manager (usually the same people who put the fund together in the first place).

This fund has a ramping up period (where funds are used to acquire investments), and a winding down phase (where investments are sold off for what the fund hopes is a profit). In Fig, an investor has a return schedule where he's paid up to certain $ amounts and then a percentage of revenues thereafter. This is a bit different than owning an interest in a company, as your involvement is on a project to project basis.

Here's an example of this PE model:

what-is-private-equity-7-638.jpg




3. Ok, whatever....but isn't this just like Kickstarter?

I'd probably say it's the difference between your good old hamburger (Kickstarter) and a nice cut of sirloin at a top steak house (Fig). Reason being that Fig is a platform that attracts a different kind of donor. One who is a bit more knowledgeable on business, project management, and realistic expectations. Which ultimately means the devs will be trolled a bit less than your average rabid neckbeard fanboi.

Not saying one type of donor is better than the other, but it's obvious that a dev would appreciate a more forgiving donor base.


4. So is this a good or bad thing?


It's hard to say. It actually depends on a variety of things we don't have the details about. Consider these questions:

-How can donors be assured the revenue amounts are accurate? Public companies get audited, but there's no requirement for audits of private companies, and Fig has not indicated there will be any kind of oversight to ensure payout are accurate.

-Won't having the pressure of actual returns on investment increase the risk of every project? Remember...kickstarter is essentially fire and forget. Once the dev has the funds he can experiment, add new ideas, etc. The only obligation one has is to his/her own sense of morality, as they can just screw around as much as they want.

The flipside is that devs can feel free to pitch and make any game they simply feel is cool. Which leads to a ton of failures, but also to a ton of new ideas never before tried. If becoming profitable becomes a concern, then the natural propensity is to play it safer. This goes for both devs AND investors.


-What stops the advisory council (aka Fargo & Co.) from acting like just another publisher? Absolutely nothing really. They are now in control of the type of games THEY want to make, regardless of the demand for other types. They in form, have become the publisher because they control the access to funding.

Which....is really not a bad thing IMO. Don't forget, devs are historically bad at budgeting, seeting realistic expectations, project management, etc. without some kind of external force making thm do it. It's the truth for many other creative fields.

EDIT: The main issue then becomes...who are the decision/king makers? *looks at Shafer* ....

TL;DR Fig is a stupid name.
 
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Infinitron

I post news
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Codex Year of the Donut Serpent in the Staglands Dead State Divinity: Original Sin Project: Eternity Torment: Tides of Numenera Wasteland 2 Shadorwun: Hong Kong Divinity: Original Sin 2 A Beautifully Desolate Campaign Pillars of Eternity 2: Deadfire Pathfinder: Kingmaker Pathfinder: Wrath I'm very into cock and ball torture I helped put crap in Monomyth
You certainly put some effort into that. Are you involved with something like this "IRL", Mustawd?
 

Havoc

Cheerful Magician
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Grab the Codex by the pussy Insert Title Here RPG Wokedex Dead State Divinity: Original Sin Project: Eternity Wasteland 2 Codex USB, 2014 Shadorwun: Hong Kong Divinity: Original Sin 2 Pathfinder: Kingmaker Pathfinder: Wrath
Still everything connected to IndieCade, Phil Fish and Tim Schafer is just fishy. Nobody wants this crowdfunded game? Let's it give half a million!
 

Mustawd

Guest
To me it's weird that this hasn't been tried before....much much sooner than the JOBS act was ever created.

I mean, instead of providing an actual investment.....why not provide a simple royalty agreement? Really, who even knows if these $1000 tiers are not just that? I mean I haven't seen the prospectus on these investments as I'm not an accredited investor....yet :smug:

It might be more coplicated than that...not sure since I'm not an asshole lawyer.
 

Mustawd

Guest
Backwards..Venture Capitalism is a form of private equity. Just a much more risky endeavor. For VCs, they basically throw a ton of money at 10 super risky super high reward investments with the hopes that one or two will pay off.

Private equity, like the stock market, has a variety of different funds with different risk profiles. VCs, along with some hedge funds, are on the extreme end of the risk-reward spectrum.

http://www.investopedia.com/terms/v/venturecapital.asp

EDIT: Actually.....one can classify this as VC...yes...it'll probably attract a variety of types of ivestors...which is why I initially said No. But I'm sure there are some VCs/Angel investors involved.
 

Infinitron

I post news
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Codex Year of the Donut Serpent in the Staglands Dead State Divinity: Original Sin Project: Eternity Torment: Tides of Numenera Wasteland 2 Shadorwun: Hong Kong Divinity: Original Sin 2 A Beautifully Desolate Campaign Pillars of Eternity 2: Deadfire Pathfinder: Kingmaker Pathfinder: Wrath I'm very into cock and ball torture I helped put crap in Monomyth
Mustawd

This fund has a ramping up period (where funds are used to acquire investments), and a winding down phase (where investments are sold off for what the fund hopes is a profit).

Can you explain? "Funds are used to acquire investments"? I thought the funds ARE the investment.
 

ArchAngel

Arcane
Joined
Mar 16, 2015
Messages
19,885
The pitch video with Hero actor was pretty cool and funny, I liked it. The game video sucks big time.
 

Mustawd

Guest
Mustawd



Can you explain? "Funds are used to acquire investments"? I thought the funds ARE the investment.


Well, the way it works is like this:

I want to be involved in the Manhattan Real Estate market...BUT....I only have..say $500k. Not enough to build a hotel or whatever. But say 30 investors, each with $500k, get together and pool their money into a fund.

This fund then uses the money to either acquire an existing hotel in hopes that the location will improve and they can make a profit, manage the property better, or refurbish the property to increase its value. OR they can just take the pooled money and build a new hotel...whatever their investment strategy dictates.

So yes...from an individual invsetor's point of view, their investment is the amount of the $$ they put in. But the actuall "Investment" earning the returns is the specific project the fund is involved in. In this case it's each video game. It's mainly semantics/industry speak.

What's interesting is that the lower tier investments seem to be on a game by game basis. Instead of the traditional pooling of money, and then allocating that money to make worthy investments. Which makes me wonder what the relationship is with say....someone who can give $1 million.
 

DeepOcean

Arcane
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Nov 8, 2012
Messages
7,394
I just don't understand why starting with a fag indie game instead of a bigger project, if they had already investors interested why not starting with something bigger?
 

J_C

One Bit Studio
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Project: Eternity Wasteland 2 Shadorwun: Hong Kong Divinity: Original Sin 2 Steve gets a Kidney but I don't even get a tag. Pathfinder: Wrath
I just don't understand why starting with a fag indie game instead of a bigger project, if they had already investors interested why not starting with something bigger?
I guess they want to test the waters with something smaller.
 

vonAchdorf

Arcane
Joined
Sep 20, 2014
Messages
13,465
I don't doubt that they are pretty serious about the whole project. Time will tell if it actually fulfills a demand. Private investment in games isn't really new, Age of Wonders had Persson, Vavra has some private investor, but this platform would make it easier accessible without personal connections and it would allow bundling smaller "investments". Their role is also reducing the risk for investors by vetting the projects before their campaign and probably also helping the funds out with their industry connections / rolodeck, like any old VC / angel investor does.

3. Ok, whatever....but isn't this just like Kickstarter?

I'd probably say it's the difference between your good old hamburger (Kickstarter) and a nice cut of sirloin at a top steak house (Fig). Reason being that Fig is a platform that attracts a different kind of donor. One who is a bit more knowledgeable on business, project management, and realistic expectations. Which ultimately means the devs will be trolled a bit less than your average rabid neckbeard fanboi.

Not saying one type of donor is better than the other, but it's obvious that a dev would appreciate a more forgiving donor base.

But doesn't Fig allow both? Neckbeard fanboy donations and investors' money? Also a lot of KS developers praise the collaboration with the fans as added benefit to the money they get. Between the trolling, they seem to hope (and get) valuable input.
 
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FrankHamilton

Educated
Joined
Oct 18, 2014
Messages
51
I'm still unclear what this is going to mean for the whole indie scene. If there can only be 2 games at a time per month, who is going to decide which gets greenlit? Schafer, Feargus? None of these people seem to have good taste at all. How does this affect Styg, Whalenought Studios and Cleve and any other prospective indie developer.
 

Infinitron

I post news
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Joined
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Messages
97,228
Codex Year of the Donut Serpent in the Staglands Dead State Divinity: Original Sin Project: Eternity Torment: Tides of Numenera Wasteland 2 Shadorwun: Hong Kong Divinity: Original Sin 2 A Beautifully Desolate Campaign Pillars of Eternity 2: Deadfire Pathfinder: Kingmaker Pathfinder: Wrath I'm very into cock and ball torture I helped put crap in Monomyth
I'm still unclear what this is going to mean for the whole indie scene. If there can only be 2 games at a time per month, who is going to decide which gets greenlit? Schafer, Feargus? None of these people seem to have good taste at all. How does this affect Styg, Whalenought Studios and Cleve and any other prospective indie developer.

I daresay that a side effect of Fig may be that fan communities like ours become more important

Codex posts about indie RPG, gets enthusiastic about it. Brother None reads Codex. Brian Fargo consults with Brother None.
 

Athelas

Arcane
Joined
Jun 24, 2013
Messages
4,502
The goal of Fig seems to be to extend the (presumed) funding ceiling of Kickstarter.

I guess Feargus really has his heart set on that episodic Skyrim thing.
 

Mustawd

Guest
But doesn't Fig allow both? Neckbeard fanboy donations and investors' money? Also a lot of KS developers praise the collaboration with the fans as added benefit to the money they get. Between the trolling, they seem to hope (and get) valuable input.


Sure...but how easy is it to find? It took me a bit of clicking around to even find the damn regular backer tiers. Besides, let's not forget that Fig is not supposed to be the only funding available to them. It's just another source.

To be honest, kickstarter has always seemed like a shitty deal to me....so you're asking me, as a backer, to put up all the financial risk for you, the novice developer, to attempt to make a game? Hell, not even required to put out a working product? What do I get for my risk? Oh yeah...look at this cool box that comes a year later after release and is shittier than I thought it'd be...
 

Rake

Arcane
Joined
Oct 11, 2012
Messages
2,969
I'm still unclear what this is going to mean for the whole indie scene. If there can only be 2 games at a time per month, who is going to decide which gets greenlit? Schafer, Feargus? None of these people seem to have good taste at all. How does this affect Styg, Whalenought Studios and Cleve and any other prospective indie developer.
Kickstarter is still there
 

polo

Magister
Joined
Jul 8, 2014
Messages
1,737
I won't support it until i see a picture of Schafer swimming in a pool full of money.
 

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