- VC investors include Founders Fund and m8 Capital
- Second largest crowdfunded game in history (over $11M raised) since completion of Series A in Q2 2012
- Over 60k volunteer testers who have logged over 3 million hours / 300 years of gameplay
- Led by veteran game developer and entrepreneurs, Richard Garriott and Starr Long
- Over 150,000 player registrations
- Amount raised:
- Series B :
- Minimum Investment: US $499 per investor
- : Preferred Equity
- US $25,000,000 :
- Side by Side Offering
** Upcoming NextGen Crowdfunding Pitch **
Portalarium will be presenting their SeedInvest crowdfunding campaign at NextGen Crowdfunding’s Los Angeles Studio on Wednesday, July 19th, at 4:00 pm ET. Join Richard Garriott, CEO and Creative Director of Portalarium, for a live-streamed pitch and Q&A session. Register here: https://www.nextgencrowdfunding.com/companies/nextgen-crowdfunding-personalized-dashboard-launch-event-1012/
Videogame development company Portalarium is preparing to release Shroud of the Avatar, the spiritual successor to Richard Garriott’s Ultima series. Players that seek to unravel the mysteries of Shroud of the Avatar will find themselves immersed in a deep narrative, co-written by Richard Garriott and New York Times bestselling fantasy author Tracy Hickman, replete with ethical dilemmas and moral consequences that will follow players’ characters throughout the game. Whether as the ruler of a player-owned town with hundreds of real players as residents, a dragon-slaying adventurer, or a master craftsman sought by fellow players across the world of New Britannia, the Shroud of the Avatar sandbox provides players with the next leap in the evolution of massively multiplayer games, a key segment of the games market pioneered by Portalarium founder Richard Garriott in the 1990s. The MMO market has since grown to over $20 billion in annual revenues.
Shroud of the Avatar is a detailed sandbox-style MMORPG in a third-person view played with a mouse and keyboard. The player-first mindset gives Avatars the freedom to explore the world as they choose: slay a dragon, establish trade routes, craft weapons and armor, or conquer a town. Shroud of the Avatar provides players with a real world where they can do real exploration, and are faced with choices that have real consequences.
Shroud of the Avatar builds a real world by giving real people (the players) a far larger role in the land of New Britannia than other games. Homes, shops, and entire towns can be owned and customized by players giving each location a truly “human” touch, and like real world real estate, the number of available properties is finite. The economy is entirely player-driven with the most valuable items only available from fellow Avatars who have mastered their crafting skills. A dynamic skill-based combat system also engages players by breaking away from the “min-max spreadsheets” of traditional MMO combat.
Unlike traditional MMOs, which often direct players with exclamation marks and arrows on the map, Shroud of the Avatar lets players actually explore. Instead of rigid branching conversations, players may engage NPCs in parsed, multi-sentence interactions. Only by asking the right questions will players unlock the secrets of the world. As players explore the rich sandbox world, they will find that they can open each door, read each book, and interact with each of the thousands of NPCs and creatures spread across hundreds of towns and dungeons.
No game by Lord British is complete without a deep narrative and difficult ethical dilemmas, and Shroud of the Avatar is no exception. Each choice made by a player (as minor as giving a beggar a coin or as significant as assassinating a lord) will change the response of the game-world to that player. Should players choose to pursue the main narrative, they will find their virtues tested in the 100+ hours of gameplay of Episode I of Shroud of the Avatar.
Shroud of the Avatar’s “Selective Mulitplayer” also gives players the freedom to experience an RPG as they like – open MMO with all players, friends only, or single player online (or offline) play. Those that choose to explore with other players will also find that Portalarium’s brand new server structure allows all players to exist in one reality – no more segregating friends arbitrarily into separate servers (aka “Shards”).
Portalarium is the third instantiation of one of the most successful PC gaming development teams in history. The leadership team of Portalarium participated in the founding, growth, and monetization of two previous efforts. The first was Origin Systems Inc, which published numerous top selling and award winning PC games through the 1980’s and 1990’s, including Ultima, Wing Commander, Crusader, and others. The team also includes producers, directors, and staff from the team that pioneered the MMO genre with Ultima Online in 1997 after it was acquired by Electronic Arts.
The core of Portalarium team then created Destination Games in 2000 and was acquired that same year by Korean MMO giant, NCSoft. The Portalarium founders were essential in rapidly growing the U.S. business of NCSoft from its nascent beginnings to hundreds of millions in revenue each year with products like Guild Wars, City of Heroes & Villains, and Tabula Rasa.
The current Portalarium team is a winning combination of the leading minds from the aforementioned history, top experienced talent brought in from other studios, and young talent that we’ll grow into the next generation of industry leaders.
We believe this team is uniquely qualified and can demonstrate the ability to yet again redefine online gaming for the ever-growing population of players seeking compelling virtual realities in which to live, work, and play.
A Side by Side offering refers to a deal that is raising capital under two offering types. If you plan on investing less than US $20,000.00, you will automatically invest under the Regulation CF offering type. If you invest more than US $20,000.00, you must be an accredited investor and invest under the Regulation D offering type.
|Terms & Description|
|Investor Types||Accredited Only||Accredited and Non-accredited|
|Series B||Series B|
|Round size||US $2,000,000||US $2,000,000|
|US $25,000||US $340,149|
|Minimum investment||$20,000||US $499|
|US $500,000||US $500,000|
|Closing Conditions||The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $25,000 under the Regulation CF offering and a total of $500,000 under the Combined Offerings (the “Closing Amount”) by the campaign end date, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.||The Company is making concurrent offerings under both Regulation CF and Regulation D (the "Combined Offerings"). Unless the Company raises at least the Target Amount of $25,000 under the Regulation CF offering and a total of $500,000 under the Combined Offerings (the “Closing Amount”) by the campaign end date, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.|
|CF Offering Cap||While Portalarium is offering up to $2,000,000 worth of securities in its Series B round, only up $1,000,000 of that amount may be raised through Regulation CF.||While Portalarium is offering up to $2,000,000 worth of securities in its Series B round, only up $1,000,000 of that amount may be raised through Regulation CF.|
Investors who invest at the levels below or more will have the option to receive in-game benefits that they can use themselves in game.
$500: Golden Armor and Golden Cloak
- Game Access
Exclusive Golden Cloak (See Gallery)
Exclusive Suit of Golden Clockwork Armor (See Gallery)
Exclusive Golden Lord British Helmet
Exclusive Golden Lord British Throne
Exclusive Golden Trimmed Tuxedo
Exclusive Golden Lord British Moondial
Exclusive Replenishing Box of Assorted Golden Fireworks
/goldenflowerwandtrick: Exclusive Magic Trick Animation
/goldenbirdtrick: Exclusive Magic Trick Animation
/goldenendlessclothtrick: Exclusive Magic Trick Animation
$1000: Golden Row Home
- All of the above
- Exclusive Golden Lord British Shield (See Gallery)
- Tax Free Player Owned Town Row Lot Deed
- Exclusive Golden Ornate Greenhouse 4-Story Row House (See Gallery)
- Exclusive Golden Clockwork Raven Pet (See Gallery)
$2500: Golden Village Home
- All of the above
- Tax Free Village POT Lot Deed
- Exclusive Golden Viking Village Home
- Exclusive Golden Clockwork Cat Pet
- Exclusive Ornate Gold Plated Iron Fence
$5000: Golden Town Home
- All of the Above
- Tax Free Town POT Lot Deed
- Exclusive Golden Pristine Gothic Mansion
- Exclusive Golden Clockwork Dog Pet
- Exclusive Golden Streetlamps (6 Pack)
$10,000: Golden City Home
- All of the above
- Tax Free Player Owned Town City Lot Deed
- Exclusive Golden Kobold 4-Story Great Hall (See Gallery)
- Exclusive Golden Sword (See Gallery)
- Tour of Portalarium Studios in Austin, TX (travel expenses not included)
$20,000: Golden Keep
- All of the above
- Tax Free Keep POT Lot Deed
- Exclusive Golden Osidian 4-Tower Keep City Home
- Exclusive Golden Remote Bank Access Device
- Exclusive Golden Automaton Pet
- Exclusive Golden Viking Palisade Walls
$30,000: Golden Castle
- All of the above
- Tax Free Player Owned Town Castle Lot Deed
- Exclusive Golden Airship (See Gallery)
- Exclusive Golden Castle Walls (See Gallery)
- Exclusive Golden Clockwork Pet Dragon (See Gallery)
- Dinner with Lord and Lady British and other Golden Castle owners at their home Britannia Manor in New York City (travel expenses not included)
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
The graph below illustrates theor the of Portalarium's prior rounds by year.
Please see the financial information listed on the cover page of the Form C and attached hereto in addition to the following information.
The Company recognizes revenue when: (1) persuasive evidence exists of an arrangement with the customer reflecting the terms and conditions under which products or services will be provided; (2) delivery has occurred or services have been provided; (3) the fee is fixed or determinable; and (4) collection is reasonably assured. Recognized revenues to date have been through book sales, while all product sales are recorded as deferred revenues, as discussed in Note 4 of Exhibit B, as the revenue recognition criteria has not yet been completed.
We believe that our prior earnings and cash flows are not indicative of future earnings and cash flows. The software is currently in development and expected to launch between July and November 2017 at which point sales are expected to increase.
The Company has entered into revenue sharing arrangements with certain third parties in international countries in order to more target these markets more effectively and efficiently. These revenue sharing arrangements vary in terms and could impact future cost of sales and gross margins of the Company. In addition, the Company may explore additional services, service lines, and products in the future that may have an impact on costs of sales and gross margins.
The Company currently requires approximately $230,000 a month to sustain operations.
Liquidity and Capital Resources
The Company’s ability to continue as a going concern in the next twelve months following the date the financial statements were available to be issued is dependent upon its ability to produce revenues and/or obtain financing sufficient to meet current and future obligations and deploy such to produce profitable operating results. Management has evaluated these conditions and plans to generate revenues and raise capital as needed to satisfy its capital needs. No assurance can be given that the Company will be successful in these efforts.
The Company does not have any additional sources of capital other than the proceeds from the Offering.
The company may look for additional financing to complete future episodes.
Capital Expenditures and Other Obligations
The Company has not made any material capital expenditures in the past two years.
The Company does not intend to make any material capital expenditures in the future.
The Company has a 3-year lease for its current office space that currently requires rent of $5,077.92 per month running from November 2015 through October 2018
Material Changes and Other Information
Trends and Uncertainties
The Company does not currently believe it is subject to any trends or uncertainties.
After reviewing the above discussion of the steps the Company intends to take, potential Purchasers should consider whether achievement of each step within the estimated time frame is realistic in their judgment. Potential Purchasers should also assess the consequences to the Company of any delays in taking these steps and whether the Company will need additional financing to accomplish them.
The financial statements are an important part of this Form C and should be reviewed in their entirety. The financial statements of the Company are attached hereto as Exhibit A.
Based on the Offering price of the Securities, the pre-offering value ascribed to the Company is $25,000,000.
As discussed in "Dilution" below, the valuation will determine the amount by which the investor’s stake is diluted immediately upon investment. An early-stage company typically sells its shares (or grants options over its shares) to its founders and early employees at a very low cash cost, because they are, in effect, putting their "sweat equity" into the company. When the company seeks cash investments from outside investors, like you, the new investors typically pay a much larger sum for their shares than the founders or earlier investors, which means that the cash value of your stake is immediately diluted because each share of the same type is worth the same amount, and you paid more for your shares (or the notes convertible into shares) than earlier investors did for theirs.
There are several ways to value a company, and none of them is perfect and all of them involve a certain amount of guesswork. The same method can produce a different valuation if used by a different person.
Liquidation Value — The amount for which the assets of the company can be sold, minus the liabilities owed, e.g., the assets of a bakery include the cake mixers, ingredients, baking tins, etc. The liabilities of a bakery include the cost of rent or mortgage on the bakery. However, this value does not reflect the potential value of a business, e.g. the value of the secret recipe. The value for most startups lies in their potential, as many early stage companies do not have many assets (they probably need to raise funds through a securities offering in order to purchase some equipment).
Book Value — This is based on analysis of the company’s financial statements, usually looking at the company’s balance sheet as prepared by its accountants. However, the balance sheet only looks at costs (i.e. what was paid for the asset), and does not consider whether the asset has increased in value over time. In addition, some intangible assets, such as patents, trademarks or trade names, are very valuable but are not usually represented at their market value on the balance sheet.
Earnings Approach — This is based on what the investor will pay (the present value) for what the investor expects to obtain in the future (the future return), taking into account inflation, the lost opportunity to participate in other investments, the risk of not receiving the return. However, predictions of the future are uncertain and valuation of future returns is a best guess.
Different methods of valuation produce a different answer as to what your investment is worth. Typically liquidation value and book value will produce a lower valuation than the earnings approach. However, the earnings approach is also most likely to be risky as it is based on many assumptions about the future, while the liquidation value and book value are much more conservative.
Future investors (including people seeking to acquire the company) may value the company differently. They may use a different valuation method, or different assumptions about the company’s business and its market. Different valuations may mean that the value assigned to your investment changes. It frequently happens that when a large institutional investor such as a venture capitalist makes an investment in a company, it values the company at a lower price than the initial investors did. If this happens, the value of the investment will go down.
There are 1.2 billion active gamers globally and the global game market has now reached nearly $100 billion in revenue. Lord British and the Ultima Online team (of which many are part of the Portalarium team) were pioneers in massively multiplayer online ("MMO") games, a key segment of the global game market, which has generated close to $20 billion in revenues in 2016 and is expected to reach $26 billion by 2019.
Portalarium founders created Ultima Online (considered by some to be the first MMORPG) in 1997 and coined the term MMO that continues to describe the genre. In its first full year of operations (1998), Ultima Online generated $ 17 million in revenues, which represented a majority of the MMO market. The MMO segment has experienced growth since, and commands today close to $20 billion in revenues.
Although there are now numerous strong players competing for MMO market share today, many would acknowledge that Lord British’s ongoing vision will continue to chart new territories, especially within the hard core segment.
We are an independent development company and are building our first large-scale product. The Company was formed in September 2009 and is creating its first major product. Investment in the Company is highly speculative because it entails significant risk that we may never become commercially viable. We need to complete development of our product, and while the funds raised through this offering will be used to fund the development of our product (i.e., the game Shroud of the Avatar), we will require additional funding after this offering to complete the development and then launch our product. Once developed, we will need to transition from a company focused on development to a company that is also capable of successfully marketing, launching and operating the product. We may not be successful in such a transition. As an independent developer, we may encounter unforeseen expenses, difficulties, complications, delays and other known and unknown factors. We are subject to all of the risks that are commonplace among independent developers and should be considered as a startup business with significant risk that may face various difficulties typical for development stage companies. These may include, among others: relatively limited financial resources; developing new investment opportunities; delays in reaching projected goals and milestones; competition from larger, more established companies; and difficultly recruiting and retaining qualified employees and other personnel. The Company may encounter these and other difficulties in the future, some of which may be beyond its control. If the Company is unable to successfully address these difficulties as they arise, the Company’s future growth and earnings will be negatively affected. The Company cannot give assurance to prospective investors that its business model and plans will be successful or that it will successfully address any problems that may arise. There is substantial doubt about the ability of development stage companies continue as a going concern.
Our future revenue is unpredictable and is based upon a single initial game that is currently under development. We cannot guarantee that Shroud of the Avatar or any future products will be successfully developed or that our products will be profitable. Our business is speculative and dependent upon the acceptance of our products and the effectiveness of our marketing program to convince players to choose our products. We cannot assure that consumers will accept our products or that we will earn any revenues or profit. Investors may lose their entire investment. In addition, there is a substantial risk that we may not receive sufficient funding after this offering to complete the development of our game. It is also difficult to accurately forecast our revenues and operating results, and they may fluctuate in the future due to a number of factors. These factors include, but are not limited to, player acceptance of our games, competition from other market participants, and adverse changes in general economic, industry and regulatory conditions and requirements.
The loss of key personnel, or the inability to attract talent, could adversely impact our business. Our success is largely dependent on the retention of certain key personnel, including, but not limited to, our Chief Executive Officer, Creative Director and member of the board of directors, Richard Garriott de Cayeux, and our Executive Producer, Starr Long. Our success is also dependent on the retention of certain of key team members focused on the design, development, engineering and/or production of the product. The loss of services of one or more of any of these key personnel members from our Company could adversely affect our business, projected sales, revenue and prospects. Our success is also dependent on our ability to hire and retain other key team members to assist in, among other things, the production, development and operations of the product. Competition for qualified personnel in the gaming industry is high, and we may have difficulty in hiring and/or retaining necessary personnel for a variety of reasons, including, without limitation, such competitive nature.
We face significant market competition from larger competitors. While many new products are regularly introduced in our industry, it is increasingly difficult to produce high-quality products and to predict, prior to completing product development, what products will succeed. Competitors often develop products that could replicate or compete with products of competitors, which in turn hinders growth of a customer base and profitability. Products published by our competitors may take a larger share of players spending than anticipated, which could cause our product sales to fall below expectations. Players may lose interest in our product. If our competitors develop more successful products and/or offer competitive products at lower prices, our revenues, margins and profitability could be impaired. Our competitors include very large corporations with significantly greater financial, marketing and product development resources than we have. The availability of significant financial resources is a major competitive factor in the production of high-quality products and in the marketing of products that are ultimately well-received. Our larger competitors may be able to leverage their greater financial, technical, personnel, and other resources to finance larger budgets for development and marketing, and make higher offers to licensors and developers for commercially desirable properties as well as adopt more aggressive pricing policies to develop more commercially successful products. In addition, larger competitors may have greater leverage with distributors, retailers and other players.
If our game does not function as players expect, it may have a negative impact on our business and model. If our initial product does not function as players expect, our projected sales may suffer and it may negatively impact our business. Re-developing the product to satisfy players could adversely impact the product and disappoint consumers. Additionally, if players do not find our product compelling, our projected revenue and sales will lower and negatively impact our business.
Our players may choose other games and/or other forms of entertainment, and if players do not find our game compelling then our projected revenue will decline. Our player base will drive our revenue and success. The gaming industry is a highly speculative and competitive industry, and players may be critical of our product or business practices for a wide variety of reasons. If players choose other products and/or other forms of entertainment (whether by any action or inaction of our Company or our product), our projected revenue and business will decline. In addition, if our product does not function as players anticipate, if players find products that are more satisfying from their perspective, and/or if players do not find our product entertaining or compelling to their satisfaction, players may choose other products (or otherwise elect to just not use our product), which would have a negative impact on our business. Many of these factors are subjective and outside of the Company’s control.
The game may have a short lifecycle and fail to generate significant revenues. The video game industry is characterized by short product lifecycles and the frequent introduction of new games. Many products do not achieve sustained market acceptance or do not generate a sufficient level of sales to offset the costs associated with product development and distribution. A significant percentage of the sales of new products generally occurs within a relatively short period following the release of a game. Any competitive, financial, technological or other factor which delays or impairs the ability to introduce and sell games could adversely affect our operating results.
Investors may suffer potential loss or dissolution and termination. In the event of a dissolution or termination of the Company, the proceeds realized from the liquidation of assets, if any, will be distributed in the priority established by applicable law, but only after the satisfaction of claims of creditors. Accordingly, the ability of an investor to recover all or any portion of its investment under such circumstances will depend on the amount of funds realized and claims to be satisfied therefrom.
Actual results may vary from any projection we present. We may provide certain projected results of operations to prospective investors in connection with this offering. Projections are hypothetical and based upon present factors thought by management to influence our operations. Projections do not, and cannot, take into account such factors as market fluctuations, unforeseeable events such as natural disasters, the terms and conditions of any possible financing, and other possible occurrences that are beyond our ability to control or even to predict. While management believes that the projections reflect the possible outcome of our operation and performance, results depicted in the projections cannot be guaranteed.
If general economic conditions decline, demand for our product could decline. Our product will involve discretionary spending on the part of consumers. Consumers are generally more willing to make discretionary purchases, including purchases of a product like ours, during periods in which favorable economic conditions prevail. As a result, our product will be sensitive to general economic conditions and economic cycles. A reduction or shift in domestic or international consumer spending could result in an increase in our selling and promotional expenses in an effort to offset that reduction, and could have a material adverse effect on our business, financial condition, results of operations, profitability, cash flows and liquidity.
Our operating costs are unpredictable. In addition to general economic conditions and market fluctuations, significant operating cost increases could adversely affect us due to numerous factors, many of which are beyond our control. Increases in operating costs for the Company or the product would likely negatively impact our operating income, and could result in substantially decreased earnings or a loss from operations.
If we issue additional shares of our stock, stockholders may experience dilution in their ownership of our Company. We have the right to raise additional capital or incur borrowings from third parties to finance our business. In the future we may issue more shares of our common stock or preferred stock. Consequently, stockholders may experience more dilution in their ownership of us in the future.
Certain future distribution relationships have not been established. The Company has established and will establish certain relationships with others, which may include publishing, marketing or distribution partners in certain geographic territories or for certain game platforms. We will need to maintain such relationships and, in some cases, establish new ones or replace existing ones. There will be several agreements and documents that remain to be negotiated, executed, and implemented with respect to certain aspects of our planned operations. In some cases, the parties with whom we would need to establish a relationship may not yet be identified. If we are unable to enter into these agreements or relationships on satisfactory terms, our operations could be delayed or curtailed, expenses could be increased, and profitability and the likelihood of returns to any or all of our stockholders could be adversely affected.
There is no public market for the securities and you will have to hold your securities indefinitely, subject only to a private sale to a qualified counterparty that is exempt from registration, or a registration of your securities, or a sale of the business. Currently, there is no public or other trading market for the securities and there is no current intent to create a public market for the securities. Further, there can be no assurance that the Company will be able to facilitate a private sale of your securities or that any other market will develop. Thus, there can be no assurance that you will be able to liquidate your investment in case of an emergency or if you otherwise desire to do so. Investment in the Company is of a long-term nature. Accordingly, purchasers of securities will bear the economic risk of investment for an indefinite period of time.
Our buy-to-play business model may not be accepted by the market. Our buy-to-play business model has not been adequately tested in the market, and if the model is not accepted by the market, our business and projected revenue and sales will be negatively impacted. We believe that the buy-to-play business model will be accepted, but cannot confidentially predict the market acceptance for a variety of reasons, including, without limitation, the rise and use of the free-to-play business model in the market. Our buy-to-play business model also depends on sales of subscriptions and digital items, and our results will be materially impacted if we cannot execute on this model.
Marketing costs are volatile and can impact our growth and profitability. Marketing of our product and Company can be done through a variety of outlets, and part of the success of our product may depend on such marketing efforts. However, it is difficult to predict which marketing efforts will resonate with certain players. Due to the volatile nature of marketing costs and the potential need to explore a variety of marketing efforts, the Company may need to use additional funds for marketing that could impact growth and projected profitability.
We may experience significant revenue fluctuations due to a variety of factors. We may experience significant fluctuations in sales of the product due to a variety of factors, including the timing of the release of the product, the popularity of the product, the timing of customer purchases, fluctuations in the size and rate of growth of consumer demand for the product, and the accuracy of forecasts of consumer demand. Our expectations of future game revenue are based on certain assumptions and projections, and our operating results will be disproportionately and adversely affected by a failure of the product to meet sales expectations. There can be no assurance that we can maintain consistent revenue, and any significant fluctuations in revenue may reduce the value of your investment.
If the product contains defects, the product’s and the Company’s reputation could be harmed and revenue would be adversely affected. The product will be an extremely complex software program, and is difficult to develop. While we have quality controls in place to detect defects, these quality controls will be subject to human error, overriding, and reasonable resource constraints. Therefore, these quality controls and preventative measures may not be effective in detecting defects in the product before it is released into the marketplace. In such an event, that could significantly harm the business and operating results of the Company and ultimately reduce the value your investment.
The video game industry is subject to increasing regulation of content, consumer privacy, and distribution. Non-compliance with laws and regulations could materially adversely affect our business. The video game industry is subject to increasing regulation of content, consumer privacy, distribution and online hosting and delivery in the various countries where the Company intends to distribute the product. Such regulation could harm our business by limiting the size of the potential market for the product and by requiring additional differentiation between products for different countries to address varying regulations. If our Company and our advisors do not successfully respond to these regulations, sales may decrease and our business may suffer. Generally, any failure of the Company to comply with laws and regulatory requirements applicable to our business may, among other things, limit our ability to generate revenue, and, in addition, could subject us to higher costs, damages, class action lawsuits, administrative enforcement actions, and civil and criminal liability.
If the product infringes on the intellectual property rights of others, costly litigation would negatively affect sales and our business may suffer. Some of the images and other content in the product may inadvertently infringe upon the intellectual property rights of others. Although we will make efforts to ensure that the product does not violate the intellectual property rights of others, it is possible that third parties still may claim infringement. Infringement claims against the Company, whether valid or not, may be time consuming and expensive to defend. Such claims or litigations could require us to stop development, stop selling a game, redesign the product or require us to obtain a license such intellectual property, all of which would be costly and may increase costs and/or negatively affect revenues received by the Company and the value of your investment. We cannot be certain that a game will not infringe on issued trademarks, patents, and copyright rights of others. Our Company may be subject to legal proceedings and claims from time to time in our ordinary course of business arising out of intellectual property rights of others. These legal proceedings can be very costly, and thus can negatively affect the results of our operations.
If consumers move away from the platform or platforms our games are distributed on, our growth and revenue would be materially affected. The Company’s product will be delivered on the personal computer (“PC”) platform, and there is a possibility that it may be delivered on console platforms in the future. If consumers begin to migrate to other platforms, such mobile and/or tablet devices, and the installed base of the platform(s) that the Company has delivered its product(s) loses momentum, the Company’s revenue and growth opportunities will be directly and materially affected.
There can be no assurance that we will develop the game on our projected timeline or at all, or that the product will function as intended once developed. There can be no assurance that we can develop Shroud of the Avatar to be a saleable or successful game. Investors must consider that we may not be able to create a game that we can effectively distribute or market. There can be no assurance that we will be able to develop the product on time or at all, or that the product will function as intended once developed. Additionally, if we become subject to bankruptcy or a similar proceeding or lose our ability to attract and retain qualified personnel, we may not be able to sustain operations, complete development of the product or may develop a product that fails to attract consumers, and consequently our business will be materially adversely affected, as will the value of your investment.
Start-up investing is risky. Investing in startups is very risky, highly speculative, and should not be made by anyone who cannot afford to lose their entire investment. Unlike an investment in a mature business where there is a track record of revenue and income, the success of a startup or early-stage venture often relies on the development of a new product or service that may or may not find a market. Before investing, you should carefully consider the specific risks and disclosures related to both this offering type and the company which can be found in this company profile and the documents in the data room below.
Your shares are not easily transferable. You should not plan on being able to readily transfer and/or resell your security. Currently there is no market or liquidity for these shares and the company does not have any plans to list these shares on an exchange or other secondary market. At some point the company may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when the company either lists their shares on an exchange, is acquired, or goes bankrupt.
The Company may not pay dividends for the foreseeable future. Unless otherwise specified in the offering documents and subject to state law, you are not entitled to receive any dividends on your interest in the Company. Accordingly, any potential investor who anticipates the need for current dividends or income from an investment should not purchase any of the securities offered on the Site.
Valuation and capitalization. Unlike listed companies that are valued publicly through market-driven stock prices, the valuation of private companies, especially startups, is difficult to assess and you may risk overpaying for your investment. In addition, there may be additional classes of equity with rights that are superior to the class of equity being sold.
You may only receive limited disclosure. While the company must disclose certain information, since the company is at an early-stage they may only be able to provide limited information about its business plan and operations because it does not have fully developed operations or a long history. The company may also only obligated to file information periodically regarding its business, including financial statements. A publicly listed company, in contrast, is required to file annual and quarterly reports and promptly disclose certain events — through continuing disclosure that you can use to evaluate the status of your investment.
Investment in personnel. An early-stage investment is also an investment in the entrepreneur or management of the company. Being able to execute on the business plan is often an important factor in whether the business is viable and successful. You should be aware that a portion of your investment may fund the compensation of the company’s employees, including its management. You should carefully review any disclosure regarding the company’s use of proceeds.
Possibility of fraud. In light of the relative ease with which early-stage companies can raise funds, it may be the case that certain opportunities turn out to be money-losing fraudulent schemes. As with other investments, there is no guarantee that investments will be immune from fraud.
Lack of professional guidance. Many successful companies partially attribute their early success to the guidance of professional early-stage investors (e.g., angel investors and venture capital firms). These investors often negotiate for seats on the company’s board of directors and play an important role through their resources, contacts and experience in assisting early-stage companies in executing on their business plans. An early-stage company may not have the benefit of such professional investors.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive shares, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Portalarium. Once Portalarium accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Portalarium in exchange for your shares. At that point, you will be a proud owner in Portalarium.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or government-issued identification
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, Portalarium has set a minimum investment amount of US $499.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own shares after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these shares. Right now Portalarium does not plan to list these shares on a national exchange or another secondary market. At some point Portalarium may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Portalarium either lists their shares on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is Portalarium's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the Portalarium's Form C. The Form C includes important details about Portalarium's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your shares have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your shares have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.