Welcome to Fundrizz
Fundrizz is a RegCF Funding Portal, which connects investors with game developers seeking growth capital. Fundrizz presents below information about the investment process, the kinds of offerings available, risks to be aware of, and the tools available to manage your portfolio.
Understanding Regulation Crowdfunding (Reg CF)
Regulation Crowdfunding (Reg CF) lets both accredited and unaccredited investors participate in exempt offerings of private securities. Issuers may raise up to $5 million in a 12-month period, and all transactions must occur online through an SEC-registered intermediary. Fundrizz is a registered funding portal and FINRA member, and hosts game-focused offerings.
How Fundrizz Works for Investors
- Live Campaigns: Browse active game development campaigns on Fundrizz, each with detailed information about the project, the team, and the investment terms.
- Invest: Choose a campaign that aligns with your interests and investment goals. Investments start from as little as $100.
- Monitor Investments: Keep track of your investments and returns through the Fundrizz portal, powered by Kore Transfer Agent. Access real-time updates, financial reports, and performance metrics.
- Receive Returns: to the extent that the game generates revenue, investors may receive a quarterly revenue share distribution based on the games performance over the agreed term (ranging from 2 to 5 years). There is no guarantee that any investment will generate positive revenue and therefore, any distribution is a potential distribution.
Key Investment Terms
Minimum Investment
$100
Maximum Investment
- Accredited Investors: No limit
- Unaccredited Investors: Limits based on annual income or net Worth, as per SEC regulations
Fees
- Payment Processing: Applicable bank wire or credit card fees.
- KYC/AML Checks: Identity verification costs.
Revenue Share Distribution
Quarterly via the Fundrizz portal.
Refunds
If a campaign doesn't reach its minimum raise, you receive a full refund.
Investment Term Length
Campaigns have terms ranging from 2 to 5 years, which is the period in which investors can expect to receive returns.
Capital Deployment Period
Developers have 180 days to deploy your invested capital, to leave ample time for the capital to grow and generate returns.
Revenue Distribution Breakdown
Understanding how revenue is distributed helps you make informed investment decisions. Here's how your investment translates into returns in a typical 50%/50% revenue share agreement.
Revenue Flow
Gross Revenue: 100%
Total revenue generated by the game before any deductions.
App Store Fees: Up to 30% of Gross Revenue
- Platforms like Apple App Store or Google Play Store typically charge up to 30% for distribution.
- Calculation: 30% of Gross Revenue.
Net Revenue: 70% of Gross Revenue
- Revenue remaining after App Store fees.
- Calculation: Gross Revenue - App Store Fees.
Fundrizz Fee: 5% of Net Revenue
- Fundrizz charges a 5% fee on Net Revenue for facilitating the platform.
- Calculation: 5% of Net Revenue.
Distributable Revenue: 95% of Net Revenue
Calculation: Net Revenue - Fundrizz Fee.
Investor and Developer Shares: 50% of Distributable Revenue
- The remaining revenue is Split equally between investors and the game developer.
- Calculation: 47.5% Of Net Revenue for each.
Summarized Breakdown with Example Figures
Let's assume the game generates $100,000 in Gross Revenue.
- Gross Revenue: $100,000
- App Store Fees (30%): -$30,000
- Net Revenue: $70,000
- Fundrizz Fee (5% of Net Revenue): -$3,500
- Remaining Revenue: $66,500
- Investor Share (47.5% of Net Revenue): $33,250
- Developer Share (47.5% of Net Revenue): $33,250
Visual Representation (Text-Based)
Percentage Distribution
App Store Fees:
30% of Gross Revenue
Fundrizz Fee:
5% of Net Revenue (which is 3.5% of Gross Revenue)
Investor Share:
47.5% of Net Revenue (which is 33.25% of Gross Revenue)
Game Developer Share:
47.5% of Net Revenue (which is 33.25% Of Gross Revenue)
| Component | Calculation | Amount ($) | Percentage of Gross Revenue |
|---|---|---|---|
| Gross Revenue | $100,000.00 | 100% | |
| App Store Fees | 30% of Gross Revenue | -$30,000.00 | -30% |
| Net Revenue | Gross - App Store Fees | $70,000.00 | 70% |
| Fundrizz Fee | 5% of Net Revenue | -$3,500.00 | -3.5% |
| Remaining Revenue | Net Revenue - Fundrizz | $66,500.00 | 66.5% |
| Investor Shore | 47.5% of Net Revenue | $33,250.00 | 33.25% |
| Game Developer Share | 47.5% of Net Revenue | $33,250.00 | 33.25% |
Explanation
App Store Fees:
These are fees charged by platforms like Apple App Store or Google Play Store for distributing the game. They typically between 15% and 30% of the gross revenue.
Fundrizz Fee:
Fundrizz charges a 5% fee on the Net Revenue (after App Store fees) for providing the crowdfunding platform and services.
Investor and Developer Shares:
In the above example figure, the remaining Net Revenue after Fundrizz's fee is split 50% between the investors and the game developer, which amounts to 47.5% of the Net Revenue. The investor share of net revenue will be distributed among the investors proportionate to their investment in the issuance. For example, if the total capital raised was $100,000, and an investor contributed $1000, this would mean their proportional share is 1% of the investor share ($1000 / $100,000 = 0.01 = 1%).
Key Points to Remember
Conclusion
This breakdown should help you visualize the distribution of revenue in a 50%/50% revenue share agreement involving App Store fees and Fundrizz's platform fee. While I can't provide an actual image, I hope this detailed explanation clarifies how the revenue is allocated among the different parties involved.
Understanding Capital Deployment and Returns
Capital Deployment Period
- Duration: Developers have 180 days (approximately 6 months) after the campaign closes to deploy the capital.
- Purpose: Funds are used exclusively for user acquisition efforts, such as advertising and influencer marketing, to grow the game's player base.
- Impact on Returns: Efficient and timely deployment of capital is crucial. Delayed deployment can affect when you start receiving returns and the total amount you may earn within the term.
Timing of Potential Returns
- Start of Potential Returns: Typically, you may begin to see returns as early as one month after the campaign ends. The capital begins deployment immediately after the campaign ends, which should result in the game generating revenue shortly thereafter.
- Revenue Distributions: Returns are distributed quarterly and continue throughout the investment term.
There is no guarantee that the investment will generate revenue or distributable returns.
Investment Term Length
- Options: Campaigns Offer term lengths of 2, 3, 4, or 5 years.
- Significance: The term length determines how long you'll receive revenue share distributions. A longer term may offer more opportunity for returns, while a shorter term may reduce exposure.
Potential Return Scenarios
To help you understand how your investment could perform, we've outlined three hypothetical scenarios using a logistic growth model (S-curve), common in the gaming industry due to factors like market adoption and user engagement.
Assumptions for All Scenarios
- Total Funds Raised in Campaign: $1,000,000
- Fundrizz Success Fee: 5% ($50,000)
- Net Capital for Deployment: $950,000
- Capital Deployment Period: 180 days
- Revenue Share: 50% Investor / 50% Developer
- Term Length: 2 years (24 months)
- Revenue Distribution: Quarterly
- App Store Fees: Up to 30% of gross revenue
- Fundrizz Revenue Share Fee: 5% of net revenue
1. Base Case Scenario
- Outcome: The game performs moderately well.
- Investor ROI: 50% over 2 years.
- Total Investor Return: $1,500,000 (includes original investment).
- Cumulative Returns:
| Months | Cumulative Return |
|---|---|
| 6 | $0.00 |
| 9 | $225,000.00 |
| 12 | $675,000.00 |
| 15 | $1,050,000.00 |
| 18 | $1,275,000.00 |
| 21 | $1,425,000.00 |
| 24 | $1,500,000.00 |
2. Blockbuster Case Scenario
- Outcome: Investors make a net profit of $4,000,000.
- Investor ROI: 400% over 2 years.
- Total Investor Return: $5,000,000
- Cumulative Returns:
| Months | Cumulative Return |
|---|---|
| 6 | $0.00 |
| 9 | $1,000,000.00 |
| 12 | $3,000,000.00 |
| 15 | $4,250,000.00 |
| 18 | $4,750,000.00 |
| 21 | $4,950,000.00 |
| 24 | $5,000,000.00 |
3. Negative Case Scenario
- Outcome: Investors take a net loss of $500,000.
- Investor ROI: -50% over 2 years.
- Total Investor Return: $500,000
- Cumulative Returns:
| Months | Cumulative Return |
|---|---|
| 6 | $0.00 |
| 9 | $75,000.00 |
| 12 | $225,000.00 |
| 15 | $350,000.00 |
| 18 | $425,000.00 |
| 21 | $475,000.00 |
| 24 | $500,000.00 |
4. Total Loss Scenario
- Outcome: The game does not generate any revenue.
- Investor ROI: -100% over 2 years.
- Total Investor Return: $0
- Cumulative Returns:
| Months | Cumulative Return |
|---|---|
| 6 | $0.00 |
| 9 | $0.00 |
| 12 | $0.00 |
| 15 | $0.00 |
| 18 | $0.00 |
| 21 | $0.00 |
| 24 | $0.00 |
The above scenarios are hypothetical in nature, and are neither comprehensive nor do they represent any specific investment. Investors may lose part or all their investment in a real-world scenario.
Investment Calculator
Use our Investment Calculator on the Fundrizz portal to estimate potential returns based on:
- Investment Amount: Enter the amount you plan to invest.
- Revenue Share Percentage: Typically 50%, but may vary per campaign.
- Game Performance Scenarios: Adjust for Base Case, Blockbuster Case, or Negative Case.
- Term Length: Choose between 2 to 5 years.
The calculator provides projected returns and helps you make informed investment decisions.
Calculate your projected returns
- Simulated Scenario
- Best Case Scenario
- Worst Case Scenario
This calculator is provided for informational purposes only and any calculations and projections are hypothetical and do not reflect the potential return of any investment listed on the platform.
Monitoring Your Investment
- Investor Dashboard: Access a personalized dashboard to track your investments, view distributions, and receive updates.
- Performance Metrics: Stay informed with real-time data on game performance and revenue generation.
- Kore Integration: Our partnership with Kore ensures secure and compliant management of your investments.
Key Factors Affecting Returns
- Game Performance: The primary driver of returns; influenced by market reception and user engagement.
- Capital Deployment Efficiency: Effective use of funds during the 180-day period impacts the game's success trajectory.
- Revenue Sharing Terms: A 50% investor share means investors benefit directly from the game's net revenue.
- Time Compression: With a shorter term, the game needs to perform well quickly to maximize returns.
- Market Conditions: External factors like competition, market trends, and economic conditions can affect game performance.
Understanding the Risks
- Risk Assessment: Be aware of the potential to lose all or part of your investment.
- Illiquidity: Investments are generally illiquid, with restrictions on resale for at least one year and often held for the full term.
- No Guarantees: Returns are not guaranteed and depend on the game's success.
- Due Diligence: Review campaign materials, developer track records, app store ratings, and market analysis.
Important Notes
- No Guarantees: Returns are not guaranteed and are dependent on many variables.
- Regulatory Compliance: Investments are subject to SEC regulations and terms outlined in the offering.
FAQ
Investor Education and Compliance
- KYC/AML Verification: All investors must complete Know Your Customer (KYC) and Anti-Money Laundering (AML) checks to comply with regulatory standards.
- Investment Limits: Unaccredited investors are subject to investment limits based on SEC guidelines, calculated using your annual income and net worth.
- Risk Acknowledgement: You must acknowledge understanding the risks involved in crowdfunding investments before participating.
- Educational Materials: Fundrizz provides educational resources to help you make informed decisions, including articles, guides, and webinars.
Contact Us
For assistance or more information:
- Email: investorsupport@fundrizz.com
- Website: www.fundrizz.com
Our team is here to help you navigate your investment journey with Fundrizz.