Crowfall reaches a funding stretch goal and aims for one last target

Back in November, Crowfall studio ArtCraft joined Indiegogo's fledgling equity crowdfunding platform, which makes use of brand-new laws that allow non-accredited investors to invest in start-ups online. This is indeed investment, unlike the donation-based, Kickstarter-esque crowdfunding you're probably used to as a gamer, though investors are purchasing preferred shares, which are relatively restricted in benefit and transfer power, and there's no guarantee whatsoever investors will see a return.

Still, it's ahead of the game's persistent state, funding for ArtCraft is apparently doing fairly well at. The game has just managed to hit the 35% mark for how much can legally be raised under its newest crowdfunding push. Now the team is getting ready for one final push to 50%, with one last stretch goal for players.

Investors who back the company through this equity crowdfunding venture will receive a special land parcel that will never be available through any other means, allowing you to make a villa in the shadow of a collapsed statue. It's definitely a conversation starter, and it's available for everyone who invests if the 50% mark is passed, while backers who don't invest will still receive some freebies. If that sounds like something you just can't live without, perhaps you might want to invest a little money in the studio after all.

Source: Official Site; thanks to David for the tip!

I was very sceptical about this form of investment (and in part I still am), but there are some very helpful clarifications by Todd Coleman in the Q/A at the bottom of the main web page (link below).

In case someone else is as confused about all this as I am, here's a quick summary of the bits I found most interesting (emphasis mine):


Internet dude #1: "So, I've got a lot of money in investments (stocks, bonds etc) but I've only dealt with publicly traded stock that I can easily buy and sell on any stock exchange. Given that ArtsCraft is not a publicly traded company (as far as I can tell at least) how exactly would we cash in on our stocks several years down the road. Do we sell stocks back to the company? [...]"

Todd Coleman (Founder): "There are three ways that investors can eventually see a return on this investment: 1) the Board could elect to pay dividends, 2) ArtCraft could be acquired and/or 3) we could do an IPO.
While none of these events are guaranteed, it is worth noting that all our current shareholders (the founders, our employees and our existing shareholders) are in the same position; that is how we see a return, too!"


Todd Coleman (Founder): "There are no mandatory dividends declared for this stock. While we may decide to use potential profits to pay a dividend, it is equally likely that we will instead use those profits to reinvest in the company drive company growth.
The shares being offered are preferred shares, which means that you are buying a portion of the company's potential. The most likely scenario is that this potential could be realized through a liquidity event, such as an acquisition or an IPO (initial public offering)."

Internet dude #2: "So we will get a return on our investment if someone buys out the company or if you guys take your stock public?"

Todd Coleman (Founder): "...or if we decide to pay a dividend, yes!
While there is no guarantee, obviously, the most likely scenarios for "cashing in" (i.e. a liquidity event) are: dividends, initial public offering (IPO) or aquisition.
Dividends are certainly possible, if our financials look great and we are in a position to pay them. The only reason we would be in that position and still elect NOT to pay dividends is: growth. If we feel like we can reinvest that money into the company to drive top-line growth (or profit margin), that might make more sense. The Board of Directors will make the decision of whether to pay dividends.
IPO is a potential option, if (again) we have the financials and the traction to justify it.
The most likely liquidity event in our space and for independent developers, however, is acquisition. It's not unreasonable to believe that, if our game is a hit, we will have any number of suitors that would be interested in acquiring ArtCraft.
Obviously, we really don't know what the future will hold. The best indication of intent that I can give you is this: we are offering preferred stock, which gives you (and us, and our employees, and our previous investors) all in goal congruence. We only get a big financial "win", if you do!"


Internet dude #3: "Will these shares convert to common shares?"

Todd Coleman (Founder): "Yes! This is covered in the Form C on page 24:
The Securities are convertible into shares of common stock. The conversion rate is initially one for one, subject to
adjustment as described below. The Company currently has sufficient shares of common stock authorized to issue
upon conversion.
The following adjustments to the conversion rate may be made: Conversion price is subject to proportionate
adjustment for stock splits, stock combinations and similar transactions. The preferred stock can be converted into
shares of common stock at any time at the option of the holder. Each share of Seed-3 Preferred will automatically
convert into Common Stock, at the then applicable conversion rate, upon (a) the closing of a firmly underwritten
public offering of Common Stock or (b) the election or consent of the holders of a majority of the Preferred Stock
(voting together as a single class on an as-converted basis).'"


Source: Section "Investor Discussion" at bottom of the following page ...