Author Topic: Venture capital investing through... IndieGogo? Huh.  (Read 1055 times)

DeskJockey2028

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Venture capital investing through... IndieGogo? Huh.
« on: March 17, 2017, 09:46:06 AM »
This is kinda neat, I suppose.

One of my hobbies is modern tabletop gaming - board and card games mostly. One of the fairly decent sized publishers of such games, Tasty Minstrel Games, just went live with an investing opportunity through MicroVentures and IndieGoGo (a crowd funding site). They're looking to raise between $50k and $1 Million dollars through selling stock in their company (upwards of 25% ownership).

Normally I wouldn't be much interesting in diverting any of my investing money this route. I'm a bit tempted though, being a fan of the company, their products and knowing their reputation in the industry. I still probably will not - I don't have the money just laying around and I'm not going to pull it out of any current investments. But, I may find a way to budget in a few shares over the next 45 days of the offering. It'll have to be 'fun money' though.

BabyShark

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #1 on: March 17, 2017, 09:59:11 AM »
Wait this is a fascinating platform just in general.  I'd be interested in learning more about MicroVentures in general, anybody have experience with it?

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #2 on: March 17, 2017, 10:01:48 AM »
I agree. I believe the whole platform is very new - not entirely sure though.

That stated, I may try to scrape up $150 and invest in this just to see what happens. :)

Wait this is a fascinating platform just in general.  I'd be interested in learning more about MicroVentures in general, anybody have experience with it?

BabyShark

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #3 on: March 17, 2017, 10:03:38 AM »
Yea, I'm thinking the same, likely going to spend this weekend investigating.


bacchi

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #5 on: March 17, 2017, 10:27:10 AM »
Fig.co is also taking microinvesting. I thought about investing in POE:II but the minimum was $1000 -- too rich for me.

BabyShark

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #6 on: March 17, 2017, 10:30:35 AM »
Fig.co is also taking microinvesting. I thought about investing in POE:II but the minimum was $1000 -- too rich for me.

Awesome, going to check that out too.  I really like the idea of microinvesting, I think, but obviously need to do more research.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #7 on: March 17, 2017, 10:31:35 AM »
A few folks questioning about how this is an investment and not simple patronage (i.e. here, have some money!) on the site. One question was "How are investors being paid back?" Michael (the owner of TMG) answered thusly:

The plan is that after accomplishing growth in the company potentially adding dividends and/or providing offers (not mandatory) for stock buyback from the company.

Of course, if we chose to sell the company in the future, then there would be a return at that time as well.


Most 'startups' of this kind take about 7 years to show a ROI according to the MicroVentures website, so take that with a grain of salt.

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #8 on: March 17, 2017, 10:47:57 AM »
Venture capital investing through... IndieGogo? Huh.

why did you settle on indiegogo vs. kickstarter (curious)? if it's a logistics thing, i understand, but kickstarter as a platform offers way more exposure as a website vs. indiegogo.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #9 on: March 17, 2017, 10:49:10 AM »
I didn't settle on anything. :) It's IndieGoGo that partnered with MicroVentures, not Kickstarter.


why did you settle on indiegogo vs. kickstarter (curious)? if it's a logistics thing, i understand, but kickstarter as a platform offers way more exposure as a website vs. indiegogo.

prognastat

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #10 on: March 17, 2017, 10:53:27 AM »
I'm holding off, I have been disappointed enough by kickstarter as is which really is more of a riskier form of pre-order rather than an investment in any real sense and even at that level I have been disappointed.

Indiegogo though I haven't used it has a worse track record tan kickstarter for enabling scammers. I'm going to be dubious until I see some positive results first.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #11 on: March 17, 2017, 10:57:01 AM »
As it's your money, it's certainly your call! Keep in mind though, TMG is an established company, publishing games since 2009 - so 8 years in existence as an LLC.

I'm holding off, I have been disappointed enough by kickstarter as is which really is more of a riskier form of pre-order rather than an investment in any real sense and even at that level I have been disappointed.

Indiegogo though I haven't used it has a worse track record tan kickstarter for enabling scammers. I'm going to be dubious until I see some positive results first.

prognastat

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #12 on: March 17, 2017, 10:59:44 AM »
As it's your money, it's certainly your call! Keep in mind though, TMG is an established company, publishing games since 2009 - so 8 years in existence as an LLC.

I'm holding off, I have been disappointed enough by kickstarter as is which really is more of a riskier form of pre-order rather than an investment in any real sense and even at that level I have been disappointed.

Indiegogo though I haven't used it has a worse track record tan kickstarter for enabling scammers. I'm going to be dubious until I see some positive results first.

There have been multiple companies that had been long established and successes in the past that seriously mismanaged funds provided through Kickstarter/Indiegogo. It's one thing to drop $50 on a project you want to see funded so you can play it and dropping hundreds as an investment expecting a return.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #13 on: March 17, 2017, 11:08:08 AM »
Again, your money. I wouldn't take out hundreds/thousands of dollars and invest it in this, personally either. But I may drop $150 on it to see what this kind of thing has to offer. There are many board game crowd-funding projects that go for a lot more than this. Some of them offer decent ROI in the short term as well (like buying for $250 into a mini-heavy KS and selling it for $400 on ebay shortly after it delivers).

I'd counter your argument with "there have been multiple companies that had been long established and successful in the past that are doing quite well and have had the business sense to manage their money and products just fine." I mean, both arguments are true, right? And both hold I think equal weight here.

You're judging the viability of this on the fact that IndieGoGo is involved, and there have been scams on IndieGoGo - as there have been on Kickstarter, Ebay, Amazon and any other platform where people can try to sell things. I see scam offers on Amazon all the time, would you recommend not investing in Amazon.com?

Half playing devil's advocate here and 100% interested in your response - so 150% invested in this question. ;)

There have been multiple companies that had been long established and successes in the past that seriously mismanaged funds provided through Kickstarter/Indiegogo. It's one thing to drop $50 on a project you want to see funded so you can play it and dropping hundreds as an investment expecting a return.

Scortius

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #14 on: March 17, 2017, 11:16:10 AM »
I'm a board game enthusiast myself, and this looks like it could be a fun investment.  I'm not sure it will be a financially sound investment.  Board gaming has seen an incredible growth this past decade, but, with that comes increased competition.  In fact, many of the online retailers have gone out of business due to increased competition from mainstream retailers.  That said, as a publisher, their ceiling will ride with the popularity of the games they continue to publish.  That depends on how well you think they'll be able to recruit new designers and maintain current ones.  Board games are now seeing an expansion similar to what we've seen with the independent video game industry through Steam, Gog, and other online publishers.  There is a vast flood of new independently designed games entering the market every year, yet only a few will ever become profitable.  That said, you're investing in a publisher with a successful track record and an established customer base.   Who knows?  I would throw some money at it for fun, but I wouldn't expect much in the way of returns.

Bruinguy

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #15 on: March 17, 2017, 11:34:51 AM »
 How would you actually get returns?  They don't appear to be committing to pay dividends.  Just When they liquidate the company?  And you only get your money back as a preferred return (instead of 1.5x or 2x).  Yikes. Maybe buy this like you would buy a "share" of the Green Bay packers.

At least with a preorder scenario you may actually get something tangible for your money.

Sorry for the pessimism, but i view these types of offerings as taking advantage of a company's loyal fans with no real chance for getting your money back, let alone making something for taking on the risk.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #16 on: March 17, 2017, 11:39:29 AM »
Yup, it is a real risk.

The company could sell (to say Asmodee who's buying everyone) and that could generate an ROI for you. Or they could make a hefty profit and decide that they want full control again and offer to buy back they 25% of their company buy giving X return on your dollar. But really, it's at the will of the company, not a publicly traded market. That's the real risk and that's why I'd have an easy time throwing $150 at them and a hard time throwing $200 at them. $150 is gamble I'd be willing to lose just because I'm interested. Interested in this kind of platform, the board game industry and TMG as a company. $200 though? That's like 2 full days of retirement for me. A day and a half I could give up. 2 full days...?

How would you actually get returns?  They don't appear to be committing to pay dividends.  Just When they liquidate the company?  And you only get your money back as a preferred return (instead of 1.5x or 2x).  Yikes. Maybe buy this like you would buy a "share" of the Green Bay packers.

At least with a preorder scenario you may actually get something tangible for your money.

Sorry for the pessimism, but i view these types of offerings as taking advantage of a company's loyal fans with no real chance for getting your money back, let alone making something for taking on the risk.

RocketSurgeon

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #17 on: March 17, 2017, 12:09:41 PM »
Hello, another board game enthusiast here. My biggest concern with this is that to me the 'industry' appears to be in a bubble at the moment, and I can't imagine how much longer so many companies can continue to pull apart and reassemble the same mechanics into new board games for much longer. To be fair, I do know and play with 3 people who buy hundreds of dollars of new games every month, and it's ridiculous! They have hundreds of games between the three of them at this point and many of them don't get played more than 2 or 3 times because they have so many. It just seems like a crash has to happen eventually, and if this happens then this company will probably go down with it. But it hasn't happened yet and I'm curious how other boardgamers with an eye towards frugality perceive it. Maybe I'm missing something.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #18 on: March 17, 2017, 12:19:19 PM »
I wonder a bit if we're in a bubble too. But then, as you said, I know so, so many people who spend thousands and thousands of dollars subscribing to the 'Cult of the New' in boardgames. I was a little like that (other than the fact that I had hundreds, not thousands at my disposal). I've sort of reached the point though were I have enough unique and interesting games to occupy me and won't generally purchase something new unless it fills a niche not already filled. Or does something way, way better. Or occasionally, just really tickles my fancy, like 504 did.

Spending on board games has only increased - and it's still such a small percentage of the general population that's into them. With games expanding into Target, Wal-Mart, Barnes & Nobles and many other retail and online sellers... I think there's still a lot of room to expand even more.

Hobby board games are still not selling anywhere near the level of mass market games made by folks like Hasbro.

prognastat

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #19 on: March 17, 2017, 12:49:10 PM »
Again, your money. I wouldn't take out hundreds/thousands of dollars and invest it in this, personally either. But I may drop $150 on it to see what this kind of thing has to offer. There are many board game crowd-funding projects that go for a lot more than this. Some of them offer decent ROI in the short term as well (like buying for $250 into a mini-heavy KS and selling it for $400 on ebay shortly after it delivers).

I'd counter your argument with "there have been multiple companies that had been long established and successful in the past that are doing quite well and have had the business sense to manage their money and products just fine." I mean, both arguments are true, right? And both hold I think equal weight here.

You're judging the viability of this on the fact that IndieGoGo is involved, and there have been scams on IndieGoGo - as there have been on Kickstarter, Ebay, Amazon and any other platform where people can try to sell things. I see scam offers on Amazon all the time, would you recommend not investing in Amazon.com?

Half playing devil's advocate here and 100% interested in your response - so 150% invested in this question. ;)

There have been multiple companies that had been long established and successes in the past that seriously mismanaged funds provided through Kickstarter/Indiegogo. It's one thing to drop $50 on a project you want to see funded so you can play it and dropping hundreds as an investment expecting a return.

I would say that the amount of mismanagement and scamming on those platforms has been far worse than the alternatives and is not addressed well by the companies.

I have dealt with Amazon and they are great about refunding you if you have been scammed. Kickstarter and Indiegogo aren't at all. This might be part of having been a backer of a few mismanaged projects prior.

Also saying you shouldn't invest in Amazon because some sellers end up scammers is not an accurate analogy. It would be good to be skeptical about amazon sellers because others have proved to be scammers.

It would have been an accurate analogy if I had said not to invest in kickstarter or indiegogo themselves due to their platforms having hosted scams.

DeskJockey2028

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #20 on: March 17, 2017, 12:57:33 PM »
I can see that - makes sense.


I would say that the amount of mismanagement and scamming on those platforms has been far worse than the alternatives and is not addressed well by the companies.

I have dealt with Amazon and they are great about refunding you if you have been scammed. Kickstarter and Indiegogo aren't at all. This might be part of having been a backer of a few mismanaged projects prior.

Also saying you shouldn't invest in Amazon because some sellers end up scammers is not an accurate analogy. It would be good to be skeptical about amazon sellers because others have proved to be scammers.

It would have been an accurate analogy if I had said not to invest in kickstarter or indiegogo themselves due to their platforms having hosted scams.

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #21 on: March 17, 2017, 02:12:47 PM »
A bit off-topic, but:

Kickstarter and IndieGogo=no recourse if the project goes bad. So you have to have faith in the actual company, because the crowd funding sites are setup in such a way as to leave you no recourse through them.

I got into it with Kickstarter once, scammers had multiple projects going sequentially. I was sadly involved in the first one, could tell it was going bad, wrote Kickstarter to warn them about the second one as it had not reached its funding date so no money had been collected. They did nothing but send me boilerplate platitudes, the second project went through and more people were scammed. I had to expend more time and energy than it was worth in $ to get my CC company to refund my money, but at that point I was mad. I was also sure my CC company wasn't going to eat the cost, they would charge back Kickstarter (this was back when Kickstarter was using Amazon Payments). And I have had multiple Kickstarters go bad, some people just get in over their head, some have real life issues that come up. I just write those off. But scammers, heck no.

After my experiences I back a lot fewer Kickstarters.

prognastat

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #22 on: March 17, 2017, 02:16:01 PM »
A bit off-topic, but:

Kickstarter and IndieGogo=no recourse if the project goes bad. So you have to have faith in the actual company, because the crowd funding sites are setup in such a way as to leave you no recourse through them.

I got into it with Kickstarter once, scammers had multiple projects going sequentially. I was sadly involved in the first one, could tell it was going bad, wrote Kickstarter to warn them about the second one as it had not reached its funding date so no money had been collected. They did nothing but send me boilerplate platitudes, the second project went through and more people were scammed. I had to expend more time and energy than it was worth in $ to get my CC company to refund my money, but at that point I was mad. I was also sure my CC company wasn't going to eat the cost, they would charge back Kickstarter (this was back when Kickstarter was using Amazon Payments). And I have had multiple Kickstarters go bad, some people just get in over their head, some have real life issues that come up. I just write those off. But scammers, heck no.

After my experiences I back a lot fewer Kickstarters.

There is no incentive for kickstarter to pull down these projects. They get 30% if it succeeds, shutting it down means getting nothing. If they shut it down and it isn't a scam they lose out and if it is a scam they still get theirs. They also make sure they are fully covered in their ToS.

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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #23 on: March 20, 2017, 08:14:45 AM »
Ignoring platform issues and returning to the offering at hand,

This is a startup with a decent track record who wants what every founder wants - that sweet VC funding without any VC interference! But, they know that the board game market does not have the x10-20 return potential of other industries so VCs won't fund them. So...they farm out the risk to their fans by selling overpriced stock ($150 a share!?).

I mean, this move makes total sense for them. They raise funds by dispersing stock amongst tons of strangers who will have no say in the management of the company AND they will only have to pay out any return if the company goes on to be wildly successful/is sold. Meanwhile, the investor is stuck with a completely illiquid investment.

I don't see why anyone would want to take on this company's illiquid risk on these terms. If they *really* had huge upside potential, they would be able to secure legit private funding. If I was a VC who was investing $1M in 50 different companies (and only needing 1-2 to 'pay out' in order to make money), I might take a flyer on TMG *if* I got to bring in my own finance and marketing guys. But, throw money at them in the hopes that one day they'll give it back? Hell naw.
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Re: Venture capital investing through... IndieGogo? Huh.
« Reply #24 on: March 20, 2017, 08:24:56 AM »
Or, you could buy $150 worth of lottery tickets...
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