- Partnerships with Lanza, Reich & Daniel, YouStake, Wham Network, Twitch, and Battlefy
- In 6 weeks: 25K max concurrent views and 2M total views on YouTube & Twitch
- Patent Pending eSports Championship Format
- Producing Trevor May Showdown Series to raise awareness for childhood cancer
- Amount raised:
- Pre-Seed :
- Minimum Investment: US $500 per investor
- : Crowd Note
- US $2,000,000 :
- Side by Side Offering
Rivalcade is a Tampa, FL based eSports ecosystem. Rivalcade integrates competitions, content, and brand activations, to bring eSports professionals and enthusiasts together, and create a compelling experience for fans and brands alike. Based on our research, up to 70% of the revenue in the eSports market is generated from brand sponsorships and advertisements, yet some large non-endemic brands are still on the sidelines.
Through Rivalcade's unique competitive formats and authentic experiential approach we want to:
- Address gaps in the existing eSports ecosystem for competitions, teams, and brands.
- Reach and engage both digital and live eSports audiences with compelling eSports experiences.
- Provide an integrated solution for brands to connect with eSports audiences in an authentic, organized, and consistent manner.
Live the Battle League
The Live the Battle League is a new multi-title geo based eSports league that uses a patent pending eSports Championship Format. The League plans to have professional eSports organizations officially affiliated with major metro markets like Boston, Chicago, Dallas, Los Angeles, Miami, and San Francisco.
The professional eSports scene is very fractured. The top eSports organizations participate in a wide variety of eSports titles, with little commonality. The Live the Battle League aims to provide consistency across numerous eSports game titles and give the professional organizations the competitive stability that they are looking for. Our goal is that an LBL Champion can legitimately claim to be the best eSports organization in the world!
Rivalcade has partnered with the attorneys of the sports & entertainment law firm of Lanza, Reich & Daniel on the league formation. The firm includes Bob Lanza, former Chief Counsel of the NBA Players Association; Tom Reich, former baseball and NHL agent to stars such as Mario Lemieux, Mo Vaughn, and Joe Morgan; and George Daniel, former Commissioner of the National Lacrosse League.
The Rivalcade Rumble is a monthly eSports competition series that invites the top 8 professional organizations in a given game, and also holds a qualifying event for any other team to win their way into the event. This format allows for a competitive Pros vs Joes experience. Rivalcade has already executed two Overwatch Rumble events in April and May, peaking at over 25,000 concurrent viewers, and 3 million views and impressions.
Trevor May Showdown Series
The Trevor May Showdown Series is a unique content series, sponsored by the professional baseball player, entrepreneur, and Twitch personality, Trevor May, that teams up popular Twitch streamers with professional eSports athletes. The 2v2 streamer-pro teams then compete in a double elimination bracket for the "Showdown Belt" and the internet glory!
The goal of the series is to create compelling and entertaining content that will help participants grow their brands while having a great time, for a great cause. The series launched in July with the Trevor May Overwatch Showdown, and raised money for St. Baldrick's Foundation to cure childhood cancer.
The eSports scene is growing rapidly. We believe many events will require marketing activations to engage fans. Many event operators focus too much on the event production and struggle to provide compelling experiences for event attendees. Rivalcade will fill that experiential marketing gap with their Rivalcade Live eSports experience.
Rivalcade activated an eSports experience at Dreamhack Atlanta for Define Human Studios’ pre-launch activation of their new 'Islands of Nyne' battle royale game.
The foundation for Rivalcade was laid all the way back in 1981, when founder and CEO Scott O’Leary, almost at once, became an avid gamer, technologist, sports fan, and creative. Becoming a customer service expert, serial entrepreneur, and leader would come later, but Scott knew then that his life’s passion was video games. He wasn’t sure if that meant owning his own arcade, creating his own games, or being part of competitions. As it turned out, years later, as eSports popularity skyrocketed. Scott would found Rivalcade, the embodiment of all of those passions.
Rivalcade started oﬃcial operations in the summer of 2016 running online eSports tournaments. In short order, Rivalcade formed strong relationships and secured sponsorships from several endemic eSports brands. Over the past year Rivalcade secured partnerships with key influencers, tournament platforms, and media distribution networks. This has allowed Rivalcade to create and monetize properties like the Rivalcade Arena Spectacular, the Rivalcade Rumble Series, and Live the Battle League. Rivalcade has also successfully executed eSports activations for the Trevor May Showdown Series, the Zotac Cup, and Define Human Studios at Dreamhack Atlanta, thus fulﬁlling Scott’s vision and completing the Rivalcade eSports ecosystem.
Rivalcades mission statement from the beginning was to provide a consistent, high end, competitive gaming experience for both professional and amateur gamers alike. That inclusive Pros and Joes approach, combined with a unique competitive spirit forged by years of competitive sports, creates tremendous value for Rivalcade's partners, and the brands that work with them.
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|
|Round size||US $1,000,000||US $1,000,000|
|US $0||US $20,100|
|Minimum investment||$20,000||US $500|
|US $250,000||US $250,000|
|US $2,000,000||US $2,000,000|
|Closing Terms||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 $250,000 under the Combined Offerings (the “Closing Amount”) by October 23, 2017, 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 $250,000 under the Combined Offerings (the “Closing Amount”) by October 23, 2017, no securities will be sold in this offering, investment commitments will be cancelled, and committed funds will be returned.|
|Investment Management Agreement||All non-Major Purchasers will be subject to an Investment Management Agreement (“IMA”). The IMA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IMA included with Rivalcade's offering materials for additional details.||All non-Major Purchasers will be subject to an Investment Management Agreement (“IMA”). The IMA will authorize an investment Manager to act as representative for each non-Major Purchaser and take certain actions for their benefit and on their behalf. Please see a copy of the IMA included with Rivalcade's offering materials for additional details.|
- $500+ - “Live the Battle” T-Shirt
- $1,000+ - Rivalcade Polo Shirt
- $5,000+ - 2 Tickets to TwitchCon 2018
$10,000+ - 2 Tickets to PAX East 2018
$20,000+ - All expense paid trip with CEO Scott O’Leary to E3 2018 in LA
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Please see the financial information listed on the cover page of this Form C and attached hereto in addition to the following information. Financial statements are attached hereto as Exhibit A.
The Company is a business that has not yet generated profits nor significant revenues, has sustained net losses of $145,750 and $32,470 during the periods ended December 31, 2016 and 2015, respectively, and has an accumulated deficit of $178,220 as of December 31, 2016.
In June 2017, the Company entered into a legal services agreement whereby the counterparty is to receive 1% of the Company’s equity over a two-year vesting period.
In June 15, 2017, the Company and Lanza Reich LLP dba Reich and Daniel entered into an agreement to form a business to operate an E-sports competition with the name Live the Battle League LLC. Both parties will have 50% ownership interest in the Company.
In June 15, 2017, the Company and the CEO of the Company (“Licensor”) and Live the Battle League LLC (“Licensee”) entered into a license and royalty agreement. Licensee was granted a non-exclusive worldwide right to use the “E-sports Championship Tournament Format” owned and invented by the Licensor. As consideration for the grant, Licensee will pay to Licensor five (5%) percent of the revenue realized by the Licensor from ticket and media rights sales derived from the competition format.
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. Revenues to date primarily consist of sponsorship fees for tournaments hosted by the Company. Costs of net revenues are primarily prizes paid out to winners of the tournaments hosted by the Company.
The Offering proceeds are essential to our operations. We plan to use the proceeds as set forth above under "use of proceeds", which is an indispensable element of our business strategy. We are dependent upon additional capital resources for the commencement of our planned principal operations and are subject to significant risks and uncertainties; including failing to secure additional funding to operationalize the our planned operations.
The Company does not have any additional sources of capital other than the proceeds from the Offering.
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.
Material Changes and Other Information Trends and Uncertainties
As of December 31, 2016, the Company has not yet commenced planned full scale principal operations nor generated significant revenue. The Company’s activities since inception have primarily consisted of product development, business development, and efforts to raise additional capital. The Company is dependent upon additional capital resources for the commencement of its planned principal operations and is subject to significant risks and uncertainties; including failing to secure additional funding to operationalize the Company’s planned operations.
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.
Before making an investment decision, you should carefully consider this valuation and the factors used to reach such valuation. Such valuation may not be accurate and you are encouraged to determine your own independent value of the Company prior to investing.
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.
The eSports industry is growing rapidly. According to NewZoo, the coming year will see the eSports Economy grow to $696 million, a year-on-year growth of 41.3%. Brands are expected to spend $517 million, broken down into $155 million on advertising, $266 million on sponsorship, and a further $95 million on media rights. Brand investment will double by 2020, pushing the total market to $1.5 billion.
The current professional eSports landscape is dominated by two major companies, ESL and Dreamhack. Although these companies produce competitive and in high quality events, they both admittedly struggle with brand activations and fan engagment. Additionally, most of their events are geared only towards professional organizations, and only occur a few times a year.
How we are different
The eSports marketplace speaks to the most highly desired consumer demographic, the Millennials. Brands are looking for an authentic engagement and interaction with this core eSports demographic, which according to our research, 67% of which are under the age of 35.
By offering a complete eSports ecosystem that includes competitions (both live and online), content (both digital and linear), and engaging activations (both live and online), Rivalcade can offer a complete marketing solution to brands, both endemic and non-endemic, that want to be involved in eSports.
Risks Related to the Company’s Business and Industry
The Company's success depends on the experience and skill of Scott O'Leary, the current CEO and board of director. The Company has entered into an employment agreement with Scott O'Leary, although there can be no assurance that he will continue to be employed by the Company for a particular period of time. The loss of Scott O'Leary or any future members of the board of directors or executive officers could harm the Company's business, financial condition, cash flow and results of operations.
Rivalcade has a $75K loan with 12-month amortization. The loan is from Kabbage with an interest of 16.4% and a maturity date of July 21, 2018. This limits the cash flow of the business. A portion of the proceeds from this offering could be used to pay off the debt.
Rivalcade currently has $5,400 in cash balance. A successful fundraise will be key for operations. The Company could be harmed if it is unable to meet its cash demands to adequately manage its prize pools, salaries, and marketing demands.
Rivalcade faces competition from other companies in the eSports space. We face competition with respect to any products that we may seek to develop or commercialize in the future. Our competitors include major companies worldwide. Many of our competitors have significantly greater financial, technical and human resources than we have and superior expertise in research and development and marketing approved product and thus may be better equipped than us to develop and commercialize product. These competitors also compete with us in recruiting and retaining qualified personnel and acquiring technologies. Smaller or early stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. Accordingly, our competitors may commercialize products more rapidly or effectively than we are able to, which would adversely affect our competitive position, the likelihood that our product will achieve initial market acceptance and our ability to generate meaningful additional revenues from our products.
We may not be successful in obtaining any issued patents. Our success depends significantly on our ability to obtain, maintain and protect our proprietary rights to the technologies used in our services. Our eSport Championship Format is patent pending, which only indicates that we are pursuing protection, but the scope of protection, or whether a patent will even be granted, is still undetermined. We are not currently protected from our competitors. Moreover, any patents issued to us may be challenged, invalidated, found unenforceable or circumvented in the future.
We may plan to implement new lines of business or offer new products and services within existing lines of business. There are substantial risks and uncertainties associated with these efforts, particularly in instances where the markets are not fully developed. In developing and marketing new lines of business and/or new products and services, we may invest significant time and resources. Initial timetables for the introduction and development of new lines of business and/or new products or services may not be achieved and price and profitability targets may not prove feasible. We may not be successful in introducing new products and services in response to industry trends or developments in technology, or those new products may not achieve market acceptance. As a result, we could lose business, be forced to price products and services on less advantageous terms to retain or attract clients, or be subject to cost increases. As a result, our business, financial condition or results of operations may be adversely affected.
An intentional or unintentional disruption, failure, misappropriation or corruption of our network and information systems could severely affect our business. Such an event might be caused by computer hacking, computer viruses, worms and other destructive or disruptive software, "cyber attacks" and other malicious activity, as well as natural disasters, power outages, terrorist attacks and similar events. Such events could have an adverse impact on us and our customers, including degradation of service, service disruption, excessive call volume to call centers and damage to our plant, equipment and data. In addition, our future results could be adversely affected due to the theft, destruction, loss, misappropriation or release of confidential customer data or intellectual property. Operational or business delays may result from the disruption of network or information systems and the subsequent remediation activities. Moreover, these events may create negative publicity resulting in reputation or brand damage with customers.
The Company’s success depends on the experience and skill of the board of directors, its executive officers and key employees. In particular, the Company is dependent on Scott O’Leary who is the CEO of the Company. The Company has an employment agreement with Scott O’Leary although there can be no assurance that it will do so or that they will continue to be employed by the Company for a particular period of time. The loss of Scott O’Leary or any member of the board of directors or executive officer could harm the Company’s business, financial condition, cash flow and results of operations.
From time to time, third parties may claim that one or more of our products or services infringe their intellectual property rights. Any dispute or litigation regarding patents or other intellectual property could be costly and time-consuming due to the uncertainty of intellectual property litigation and could divert our management and key personnel from our business operations. A claim of intellectual property infringement could force us to enter into a costly or restrictive license agreement, which might not be available under acceptable terms or at all, could require us to redesign our products, which would be costly and time-consuming, and/or could subject us to an injunction against development and sale of certain of our products or services. We may have to pay substantial damages, including damages for past infringement if it is ultimately determined that our product candidates infringe a third party’s proprietary rights. Even if these claims are without merit, defending a lawsuit takes significant time, may be expensive and may divert management’s attention from other business concerns.
The amount of capital the Company is attempting to raise in this Offering is not enough to sustain the Company’s current business plan. In order to achieve the Company’s near and long-term goals, the Company will need to procure funds in addition to the amount raised in the Offering. There is no guarantee the Company will be able to raise such funds on acceptable terms or at all. If we are not able to raise sufficient capital in the future, we will not be able to execute our business plan, our continued operations will be in jeopardy and we may be forced to cease operations and sell or otherwise transfer all or substantially all of our remaining assets, which could cause a Purchaser to lose all or a portion of his or her investment.
We rely on agreements with third parties to provide certain services, goods, technology, and intellectual property rights necessary to enable us to implement some of our applications. Our ability to implement and provide our applications and services to our clients depends, in part, on services, goods, technology, and intellectual property rights owned or controlled by third parties. These third parties may become unable to or refuse to continue to provide these services, goods, technology, or intellectual property rights on commercially reasonable terms consistent with our business practices, or otherwise discontinue a service important for us to continue to operate our applications. If we fail to replace these services, goods, technologies, or intellectual property rights in a timely manner or on commercially reasonable terms, our operating results and financial condition could be harmed. In addition, we exercise limited control over our third-party vendors, which increases our vulnerability to problems with technology and services those vendors provide. If the services, technology, or intellectual property of third parties were to fail to perform as expected, it could subject us to potential liability, adversely affect our renewal rates, and have an adverse effect on our financial condition and results of operations.
The Company’s auditor has issued a going concern opinion. The auditor has issued a “going concern” opinion on the Company’s financial statements. The company did not generate profits and sustained net losses during the periods ending December 31, 2016 and 2015. According to the auditor, the Company has an accumulated deficit of $178,220 as of December 31, 2016. Additionally, the ability to continue as a going concern for the next 12 months depends on the company’s ability to produce revenues from operations to meet its obligations and/or to obtain additional capital financing. The independent accountant observes that these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern for a reasonable period of time. The auditor further notes that the financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities.
Risks Related to the Securities
A majority of the Company is owned by a small number of owners. Prior to the Offering, the CEO Scott O’Leary owns up to 82% of the Company. Subject to any fiduciary duties owed to our other owners or investors under Florida law, the CEO may be able to exercise significant influence over matters requiring owner approval, including the election of directors or managers and approval of significant Company transactions, and will have significant control over the Company’s management and policies. The CEO may have interests that are different from yours. For example, the CEO may support proposals and actions with which you may disagree. The concentration of ownership could delay or prevent a change in control of the Company or otherwise discourage a potential acquirer from attempting to obtain control of the Company, which in turn could reduce the price potential investors are willing to pay for the Company.
The Crowd Notes will not be freely tradable until one year from the initial purchase date. Although the Crowd Notes may be tradable under federal securities law, state securities regulations may apply and each Purchaser should consult with his or her attorney.
You should be aware of the long-term nature of this investment. There is not now and likely will not be a public market for the Crowd Notes. Because the Crowd Notes have not been registered under the Securities Act or under the securities laws of any state or non-United States jurisdiction, the Crowd Notes have transfer restrictions and cannot be resold in the United States except pursuant to Rule 501 of Regulation CF. It is not currently contemplated that registration under the Securities Act or other securities laws will be effected. Limitations on the transfer of the Crowd Notes may also adversely affect the price that you might be able to obtain for the Crowd Notes in a private sale. Purchasers should be aware of the long-term nature of their investment in the Company. Each Purchaser in this Offering will be required to represent that it is purchasing the Securities for its own account, for investment purposes and not with a view to resale or distribution thereof.
We are selling convertible notes that will convert into shares or result in payment in limited circumstances, and in certain circumstances only at the option of the Company.
These notes do not have a maturity date and only convert or result in payment in limited circumstances. If there is a merger, buyout or other corporate transaction occurs before a qualified equity financing, investors will receive a payment of the greater of two times their purchase price or the amount of preferred shares they would have been able to purchase using the valuation cap. If there is a qualified equity financing (and only a financing using preferred shares will count for this purpose), the conversion price will be set for conversion into non-voting shares of a to-be-determined class of preferred stock. Investors in the Regulation CF offering will be considered non-major investors under the terms of the notes offered. Only major investors will have their notes converted at this time, notes held by non-major investors will only convert at the sole discretion of the Company or in the event of subsequent corporate transaction. Further, the notes convert at a discount of 25%, or based on a valuation cap meaning investors would be rewarded for taking on early risk compared to later investors. But you won’t know how much your investment is worth until that happens. The outside investors at the time conversion, if any, might value the Company at an amount well below the valuation cap, so you should not view the valuation cap as being an indication of the Company’s value. Further any interest on the notes is accrued interest, therefore you will not be paid interest payments on these notes. If you choose to invest, you should be prepared that your notes will never convert and will have no value.
It is unclear how the Crowd Note would be interpreted by a court if we were forced into litigation. We are using Crowd Notes in this offering. Crowd Notes are designed to offer equity in the Company at a future date when specified conditions occur. However, it is unclear how a court in Delaware would interpret the provisions of the Crowd Note in relation to our organization as a limited liability company and since the notes set the number of underlying securities an investor is entitled to now, but do not provide for interest or a maturity date and only convert in limited circumstances. Should we be forced to litigate the terms of the Crowd Note, it is possible that a court would not interpret the note as we do, thereby impacting the terms of the investment and possibly providing greater rights to some investors and lesser rights to others.
We have not assessed the tax implications of using the Crowd Note. The Crowd Note is a type of debt security that does not include a set maturity date. As such, there has been inconsistent treatment under state and federal tax law as to whether the Crowd Note can be considered a debt of the Company, or the issuance of equity. Investors should consult their tax advisers.
You may have limited rights. The Company has not yet authorized preferred stock, and there is no way to know what voting rights those securities will have. In addition, as an investor in the Regulation CF offering you will be considered a non-major investor under the terms of the notes offered, and therefore upon any conversion you will receive shares of a Shadow Series with certain limited rights. Shadow Series shareholders may receive a different liquidation preference, may not have voting rights, and will receive quarterly business updates by the Company but may be limited in other information and inspection rights. Furthermore, the Company has issued and may issue convertible notes to investors outside of this offering. Those notes may convert earlier or under terms more favorable than the Crowd Note.
You will be bound by an investment management agreement, which limits your voting rights. All Non-Major Purchasers of Crowd Notes will be bound by an Investment management agreement. This agreement will limit your voting rights and at a later time may require you to convert your future preferred shares into common shares without your consent. Non-Major Purchasers will be bound by this agreement, unless Non-Major Investors holding a majority of the principal amount outstanding of the Crowd Notes vote to terminate the agreement.
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 Rivalcade. Once Rivalcade accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Rivalcade in exchange for your shares. At that point, you will be a proud owner in Rivalcade.
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.
The Crowd Note is a security which allows crowd investors to largely realize the same economic benefit traditional investors have historically received when investing in startups. For a convertible note round, investors under $20,000 will have their investment convert into preferred equity at liquidity event, locking in a share price at a discount to the next priced round, and will have an interest rate on their investment. Investors investing $20,000 and over will convert into preferred equity at the subsequent priced round at a discount to that priced round and will have an interest rate on their investment. For a priced round, investors under $20,000 will have their investment convert into preferred equity at a liquidity event, locking in the share price of the current round.
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, Rivalcade has set a minimum investment amount of US $500.
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 Rivalcade does not plan to list these shares on a national exchange or another secondary market. At some point Rivalcade 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 Rivalcade 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 Rivalcade'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 Rivalcade's Form C. The Form C includes important details about Rivalcade'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.