Wealthforge, a company that started life in part as a crowdfunding platform and then successfully morphed into a crowdfunding service provider – is powering a new investment crowdfunding niche: Broadway.
Earlier this month, Howard and Janet Kagan announced a new investment crowdfunding platform that is offering equity in Broadway productions. Operating under the auspices of Maxolev Productions, the new crowdfunding platform is allowing accredited investors to participate in the forthcoming production of “On the Town”. For a minimum investment of $10,000, individuals will be able to participate in the success (or failure) of a theatrical production. While there have been plenty of crowdfunding opportunities on the many rewards based crowdfunding platforms, and some one off equity crowdfunding productions, – Maxolev is one of the first in the United States. In the UK – there have been several successfully crowdfunded theatrical productions. Happy Days – the musical – recently closed their run in Great Britain after successfully raising £250,000 representing a 25% stake in the production. Based off the popular sitcom, the musical raised the funding from 345 investors in just 6 weeks. The popular production viewed equity crowdfunding as a way to generate earned media while creating a dedicated investor base that would promote ticket sales.
In a statement to the press Howard Kagan said of the venture;
“With the theatre industry evolving rapidly, we aim to open up the once-closed circle and invite theatregoers who are accredited investors to invest in what they love, and to share the thrilling, one-of-a-kind experience of backing a Broadway show. By streamlining the investment process and increasing accessibility, we hope to expand the community of Broadway investors, beginning with an opportunity to join in the journey of a major musical revival, On the Town.”
On The Town is a Leonard Bernstein production that is a loved classic musical comedy. This production will be directed by Tony Award winner John Rando and boasts a 30 person cast and a 28 piece orchestra. The strong association to the hit movie starring Frank Sinatra, Gene Kelly and Ann Miller guarantees an interested audience. Investors will also benefit from associated rewards – a hybrid approach that has become commonplace in equity crowdfunding offers around the world; incentivize investors by including exclusive offers. Investors may receive showing tickets, access to ongoing events – even an invitation to attend the official Tony Awards celebration.
Each show is a single purpose LLC. Cash profits are generated via ticket revenues. Once investors capital is recouped the general partner will receive a weekly success fee equal to 50% of all profits. Kagan has been quoted as saying he would be happy if Maxolev raised $1 million of the projected $8.5 million capitalization of On The Town. Of course like any investment there is no guarantee of success and the production could fall short of expectations.
Previews for the show are expected to start in September with an official open this coming October.
WealthForge, a registered broker-dealer as well as a funding portal, has also moved into the film space by powering IndieCrowdFunder. The young company recently announced their hybrid rewards and equity based crowdfunding platform to help finance films. WealtForge, founded by Matt Dellorso and Fred Bryan, has claimed over $50 million in online private equity invested via their platform. The startup raised $2.5 million in a series A round this past Spring. They want to position their company to be “the backbone of the emerging online private investment marketplace, including crowdfunding.”
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