# Crowdfunding FAQs: Things you might be wondering but are too afraid to ask | Musiversal

- Canonical URL: https://wefunder.com/feed/162665
- Entity ID: wefunder:feed_item:162665
- Published at: 2023-04-05 14:08:11 UTC
- Updated at: 2025-07-17 05:57:06 UTC

## Author
Xavier Jameson

## Subject
Musiversal

## Content
Hey folks!Since our Community Round has gone live we've received a bunch of questions about how this whole thing works.We've compiled the most frequently asked questions and will do our best to answer them below. Hopefully this is useful to you and helps clear the fog so that you can make an informed decision and jump on board before the round closes on April 30.If you still have questions, you can always ask a question on our page, or check out the Wefunder help center for more info! We'll be happy to help, however small or silly the question might seem to you. Don't worry, we've heard it all (and we asked the same questions ourselves before kicking this thing off ;))FAQ 1) What do I get for my investment? What’s the trade-off, equity wise / amount of shares?Let’s kick this answer off with a very basic overview of how investing in startups actually works!When you invest, you’ll be getting shares in the company in return. That means you’ll become a shareholder and part-owner of Musiversal. The size and value of your shares/ ownership will increase as the company becomes larger and more successful. So, over time, as the company grows and becomes more valuable, your shares will increase in value, and ultimately you’ll be able to sell your shares for a much larger amount than the money you initially put in (otherwise known as ‘return on investment’).From here on in, let’s use a classic ‘pie’ analogy. Let’s imagine you see a pie which smells way too good to resist and it’s sitting in the shop window valued at $15. You believe that pie is becoming more and more irresistible with pie-eaters, and you know that the pie-market is big and growing. So obviously, you want to own a slice of this tasty pie. Let’s say you invest $5 in said pie (shall we make it blueberry?). Now, what’s happened to the value of the pie? Well it’s just become worth $20, because before it was $15 but now it has some additional $5 of capital to make it even tastier and more irresistible to pie eaters around the world. So now you have a $20 pie, of which you put in $5 to help it own the pie market. So, you own 25% of the pie. Now, if the pie becomes even more irresistible and everyone in the pie market wants to eat it, and it’s getting so much attention that the pie owner decides to sell for a nice profit, you’ll make 25% of the sale price. If the pie sells for $100, you’ll make $25 - a 5x return on your initial investment.The same thing is true of any irresistible startup, like Musiversal. You may have seen that Musiversal has a ‘valuation cap*’ of $15M. This is essentially the value of the pie right now. So, let’s say you invest $5M. What’s just happened is, you’ve now increased the valuation of the pie (company) to $15M + $5M = $20M. So your portion of the pie (ownership in the company) is 25%. If in future Musiversal sells for $200M, you'll get $50M, a 10X return on your investment.In simple terms, the more you invest, the larger your ownership in the company. And whether you're investing $5M or $500, all investments will yield the same % return on your investment when the pie (Musiversal) sells, or goes public.*Musiversal’s ‘Valuation Cap’ is $12M for the first investors, which means 25% more ownership & shares for those who get in first.FAQ 2) What would be the process of investing e.g. how long would my money be held before I could potentially either take it back with gains/ take some profits/ or what would the process be?This is a great question and if you’re new to crowdfunding or investing in startups, it may not seem so obvious.When you invest in mature companies like Apple or Tesla, these companies are listed publicly on the stock market where investors can buy and sell shares almost instantaneously. The stock price fluctuates according to the supply and demand for those shares, and according to the performance of the company every day of the week. With startups, it doesn't work like that.The key difference between investing in startups and public companies is the timeframe for being able to sell your shares and get a return on investment. Ultimately, you’ll be able to “cash in” your shares as soon as the startup has an exit or “liquidation event”. This is classically either when the company sells (when they get acquired/ bought by a larger company) or when the company goes public (what’s known as an IPO).The average time for a startup company to go from inception to exit is 8.25 years. Musiversal’s goals are aimed towards becoming a unicorn company in 5 years time, and when we hit that milestone we might well think about going public. That’s when you can expect your shares to sell and for you to get a return on your investment.If you want to make a return sooner than that, for example if you see Musiversal's making great strides in 1-2 years and you fancy a cash influx, then we (and Wefunder) can facilitate that possibility for you. You'll just need to find a buyer, and we can sort out the legal paperwork to make that transaction happen.FAQ 3) The company isn't on the stock exchange, how do Investors keep track of how the investment is growing (or not) in the years to come? Regarding keeping track of the value of the company and your shares, we will be updating investors from time to time by posting here on Wefunder. In addition, the company's valuation will be determined at future funding rounds, where a new (likely higher) valuation will be set by the terms of that investment deal and disclosed to you and the public.FAQ 4) Is there some kind of process for paying out dividends?Musiversal and startups in general don’t pay dividends because the aim is to grow, so when the company turns a profit it will re-invest into growth. Dividends might be paid out when the company reaches maturity when the company has achieved a size large enough that it can’t grow exponentially anymore, but it’s still far off and for the foreseeable future we won’t be paying dividends.FAQ 5) What is a convertible note?A convertible note is a very popular investment vehicle that's similar to a priced/ equity round (which is when the transfer of shares happens immediately at the time of investment) - the difference is that your investment will convert into shares at the next investment/ priced round. Basically, when Musiversal raises its next round, your investment will convert into shares at that point.What’s important to know is that the proportion/ amount of shares you get at that point is determined by the valuation cap which we've set right now at this stage, not at the higher valuation in future. So, no matter what our valuation is in the next round (we hope it'll be over $40M!) you'll get shares at a much lower valuation - i.e. $15M ($12M for the first investors).WeFunder explain this a bit better in their FAQ here: https://help.wefunder.com/contract/295251-convertible-noteFAQ 6) When I go to invest it comes up with convertible note $15m valuation, but the initial page says $12m valuation. Why? The first $500,000 of investments will be at the $12M Earlybird valuation cap, and the rest will be at a higher valuation of $15M. Investing earlier means 25% more shares for your investment.We would have done the whole round at a valuation of $15M, but the $12M valuation is what we initially pitched to Musiversal users and we wanted to be in integrity with that - whilst providing our users, friends and family a better deal in these first couple of weeks of the live campaign.FAQ 7) On the perks, there are +X credits for me and +X credits for a friend. Can those other credits be for a Musiversal user or myself?The additional credits need to be for a non-Musiversal user and cannot be for yourself. The reason for this is because we want to have as many people try (and fall in love with) the Musiversal product. The more the word is spread, and the more people using Musiversal, the more users we will have and the more we can grow. This is not only beneficial for the new people using the product, but this will grow the company and be beneficial to all those who invest.We hope this update was useful - if you have any questions whatsoever, please ask away on our main page (questions section) or shoot an email to xavier@musiversal.com. No matter how small or complex the question, our goal is to fully inform you so that you can make the best decision!