Skybound Entertainment, the multiplatform media company responsible for such crowd-pleasing genre blockbusters as The Walking Dead and Invincible, is now hoping those crowds will return the favor. The company just announced a massive campaign to raise between $50 million and $75 million directly from the public via a Regulation A investment round on the Republic equity crowdfunding platform. The money will be used to increase Skybound’s ability to extend its creative footprint across the entire media landscape, from film and TV projects to videogames to licensed work without depending on outside partners.
Skybound CEO David Alpert, said, “We believe that by empowering our creators to do what they do best, and inviting its superfans to be able to hold a stake in the content they’re passionate about, it’s a win win for everyone.”
It is not unusual for companies with popular comics-based IP to seek outside investment to beef up production capabilities, especially if they have gone through bruising battles with partners over creative direction and revenue splits. Other mid-tier comics publishers, including IDW, Dark Horse and Valiant, have taken their companies public, sold themselves to larger partners, or taken big infusions of foreign investment to gain more control over the media destinies of their projects.
Skybound is taking a different approach. Rather than turn to traditional institutional sources of funding like venture capital, investment banks or private equity–where Skybound has successfully raised funds in the past–the company is opting to use a relatively new facet of securities law called “Regulation A,” an option that allows privately-held companies to offer equity directly to individual investors. By doing so, it hopes to avoid some of the painful conditions and tough choices that can come with taking on a powerful patron.
According to the company, investors may purchase units priced at $500 each, which have all the rights of common stock. Because Skybound is privately held, the units cannot be traded on common exchanges like NASDAQ or the OTC market, and consequently their value is not tied to the volume of buy and sell orders. Some secondary markets exist for these types of shares, but these markets typically only handle high-volume trades. Investors can make their money back through profit distributions or if the company gets sold or goes public.
Skybound has already raised $11 million of its target during a “quiet period” and is now hoping to hit a baseline target of $50 million, extensible to $75 million if demand is there, through the public offering. Skybound executives say the total value of the company, according to a pre-offering analysis, is about $500 million, so the total equity value on offer is about 10% to 12%. The rest of the company is owned by several large private investors, including Skybound co-founder Robert Kirkman (who is also the writer/co-creator of the comics/media properties The Walking Dead and Invincible), whose equity position guarantees them controlling interest.
Skybound executives say the crowdfunding approach is consistent with the company’s mission to connect creators, the company and its fans in a “Wheel of Awesome” that brings fan-favorite properties full circle from publishing to media and entertainment, gaming, and licensed merchandise. By sharing ownership with its fans, the company hopes to create deeper connections with its audience.
Interestingly, the company’s financial disclosures hardly make mention of publishing income from either trade books or periodicals, although The Walking Dead books are perennial bestsellers and the company commands a respectable presence in the comics market behind the corporate-owned titans like Marvel and DC.
