Very good. As of April 30, we have sold more than $1.5
million in tickets, and have had more than 15,000 people attend the show. And
attendance is growing. During 2016, paid attendance was 64% of capacity. For
the first quarter of 2017, paid attendance was 76% of capacity. But there’s
room to grow even more. We’ve been performing 2-3 shows per week, but we can
expand to four shows or even five as demand increases.

The critics love us! The San Francisco Chronicle gave us its highest rating, the "Leaping Man," (equivalent to a 5-star review), and said "The Speakeasy deserves to be a fixture in the Bay Area theatre scene." The reviewer for the San Francisco Examiner said he was "as entertained and entranced, in this utterly immersive and beautifully realized experience, as I’ve ever been." San Francisco Magazine devoted a 2-page photo spread to the show, calling it "a voyeur's paradise." Online lifestyle magazine 7x7 reported: “Calling all daddies and dames: The Speakeasy's immersive theater experience is the cat's meow,” and called our spot “the City's most beloved not-so-secret gin joint.” Other critics used the phrases "absolutely not to be missed" and "a must-see event" and "the hottest ticket in town." It's an embarrassment of riches, really.

The national public radio program "KQED Forum" interviewed two of our founders in a half-hour segment in March. The local ABC-TV affiliate just finished two days of taping for an upcoming feature segment. Our founders also did an interview for a Forbes online column. Frommer's gave us its highest rating in its online travel guide, and TripAdvisor named us "best in class" for entertainment in San Francisco. We were featured on a full 1-hour episode of the podcast "This Week In Startups." All in all, we've been featured more than 30 times in broadcast, online, and print journalism.

Yes! We are very proud to report that we recorded a small operating profit for 2016, after just a few months of operations. Not a lot of start-ups can make this claim. We expect to report increased profits for the first quarter of 2017, based on increases in paid capacity (from 64% in 2016 to 76%) and in average revenue per ticket (from $104 to $117).

We expect to see increases in tickets sold, total revenue, and profit throughout 2017 and beyond. During the first quarter of 2017, we averaged 2.33 performances per week. We have the capacity to perform the show as many as five times each week, and intend to expand the performance schedule as demand grows. Profits should increase as the schedule expands, due to the fixed cost / variable cost relationship. Our mission for 2017 is to increase demand and expand the schedule.

Number one, make the product as excellent as we can. There are still things to work on. Nick, our creative director, has never stopped refining the show itself, continuing to make the storytelling clearer and more compelling. But the show isn't the only thing that matters. The entire audience experience has to be excellent. Things like how long it takes to get through coat check, how long it takes to get the first drink into a customer's hand, and whether there are errors on the bar bill. We have to look at every aspect of service delivery. If we make sure that the entire evening is a seamless experience of excellence, positive word-of-mouth will spread like wildfire.

Number two, expand our marketing reach. Our early marketing efforts have focused on building a strong social media presence, and now we're increasing our investment in online and social advertising. To convert the increased online engagement into sales, we have launched a new website that is more informative and reduces friction in the purchase process. We expect that in the long term, half our sales will be to local residents, and half will be to tourists. To engage the visitor market, we have partnered with SF Travel (the local convention and visitors bureau), the local hotel concierge association, tour operators, and sightseeing bus operators. We've also launched our first outdoor advertising campaign, focused specifically on areas of the city frequented by tourists.

Absolutely. We're looking at all the assets we've created, and re-packaging them into other products. Our greatest asset is the venue itself. People fall in love with the authentic detail and the secret pass-throughs, and imagine hosting their own events. But there are other assets as well. The characters, the costumes, the cocktail menu. And our brand reputation. So we are using these assets to create satellite programming, special events, and private events in the space.

Yes. This is a great revenue stream for us. We’ve gotten lot of corporate leads through our ticket buyers – after they’ve seen the show, they start thinking about what a great place this is for a company party, or a client entertainment event, or a team-building event. We’re also working with the “destination management companies” that book the satellite events around the big San Francisco conventions, such as MacWorld Expo, Dreamforce, and Oracle World. The December holiday season is a great opportunity for us – last December, we hosted up to five company parties a week. Our WeFunder investors have also been great at steering company parties our way.

For sure. We just booked our first wedding, and we’ve hosted several birthday parties, and anniversary parties. There’s even a bar mitzvah on the schedule.

For large events (125-200 people), the total cost to the host is usually in the range of $25K-40K, and our margin is about 35%. We also do mid-sized events (50-125 people) in the $4K-18K range, and small events (25-50 people) in the $3,500-12,000 range, with similar margins. Most of our events include some form of Vaudeville entertainment, as well as casino-style gaming, our specialty cocktails, and catering, and the whole evening is just very unique and memorable.

While we’re building up to a five shows a week of “The Speakeasy,” we’re going to activate the venue at times when “The Speakeasy” isn’t playing. This includes late Saturday night, Sunday afternoon, and mid-week evenings. The new programming ideas include A Night at the Palace, Neo Vaudeville, Havana Nights, and Drag Brunch. Most of these can be produced with very little investment by the company, and they will bring new audiences through our doors – who hopefully will become audiences for “The Speakeasy.”

It’s a more social-oriented version of “The Speakeasy.” If you think of the original version as “Speakeasy: The Play,” you could think of this version as “Speakeasy: The Party.” Expect the full cabaret show, and familiar characters populating the rest of the space, but no meta-moments, and no heavy drama. We expect that it’s going to be great for groups and special events, and equally as appealing as “The Speakeasy,” but to a different audience.

It’s a late-night variety show in the Vaudeville tradition, but updated to reflect the contemporary fusion arts. You might see a beat-boxing flute player, a troupe of tribal-fusion belly dancers, aerial artists, stand-up comics, a tap-dancing kid, burlesque artists, contortionists, electronic looping cellists, and more.

It’s a reflection of the Cuban nightclub experience in the 1920s, with “son” musicians and dancers, island cuisine, and tropical cocktails created by our partner Pagan Idol, San Francisco’s most popular new tiki bar.

You have to ask? We are refreshing another great San Francisco tradition, but geared for tourists as well as locals. You’ll enjoy a catered breakfast with adult beverages while a cast of outrageously costumed queens sing, lip-synch, and perform slapstick and sketch routines.

Nick came up with this concept back in 2006. Originally it was just going to be a one-night-only fundraising event for Boxcar Theatre, which is the theater company he co-founded. But as we developed the concept, it just kept getting bigger and bigger until it turned into a full-scale production with multiple rooms and dozens of characters. It's turned into this incredible imaginative sandbox: almost every day we think of new ways to make the audience lose their minds. Not all of these ideas are going to fit into the current production, some are going to have to wait for future iterations in future Speakeasies around the globe.

There are other immersive theatre projects. People will compare us to “Tony and Tina’s Wedding” or “Sleep No More,” but really this is just like comparing “Rent” and “Oklahoma.” They’re both musicals, but that shared genre is where the comparisons stop.

In "Sleep No More" you are a complete bystander, totally outside the world of the play. In "Tony 'n Tina's," you're a part of their world, but the evening is mostly improvised- so there's no consistency in the experience. At "The Speakeasy," you are part of the world, you come dressed in period costume just like the actors, but the evening is fully scripted. There are moments of improvisation, and anyone who is willing can get drawn into the action. There’s an argument for the fun that comes from an interactive, improvised show. But the consistency that comes from 1,300-plus pages of script is what is going to make the show sustainable for many years.

Over the lifetime of this production, there might be 15 or 20 actors playing a single role. We put a lot of effort into making sure that each one will come in knowing exactly who that character is, what is his back-story, and how does every moment get played. We want to keep the heart of it constant, so the show you see today will be the show you see in 10 years. Think of it as controlled chaos.

Because our show offers so many different ways to experience it, our demographic is huge. We’ve been attracting people from their 20s to their 80s, and they’re coming for different reasons. For someone who's in their 70s or 80s, they might come to listen to the music that their parents used to play. Maybe they’re sitting in the Cabaret watching the Vaudeville show all night long.

Then you have the twenty-five year olds, and they’re running from room to room chasing a story, or maybe peeping through the two-way mirror in the dressing room because they want to see a hot chorus girl scene. Some people really get drawn in by the craps or blackjack tables. Some people approach it as a nightclub experience. There’s something for everyone.

There are levels on top of levels for the VIP experience. First of all, you have to come dressed appropriately, and if you don't have the wardrobe, we can take care of you. You will be able to go to our website and buy or rent a costume, and we'll deliver it to you at your home or office. A guy shows up dressed like a 1920s messenger boy, with a package wrapped in brown butcher paper and string, saying "Delivery here for Mr. Jones!" The experience begins days before you even come to the show.

Some of the costumes come with built-in characters, so you're guaranteed to be part of a scene. There's one for Sal's lawyer, and at a certain point, you'll get pulled into Sal's office, and he'll say to you, "You bring the contracts?" And you've got them, they're already tucked into the breast pocket of your suit. And then a whole scene plays out while you and Sal talk about the contracts. There's one where you get to be the mayor of San Francisco, Sunny Jim. You drink for free all night and everyone is excited to meet you. There's ten of these costumed characters every night.

We're also going to get our hands on some classic cars, Model A's or Model T's. In the upper-tier VIP packages, you get picked up in a Model A and driven to a fantastic meal in North Beach before the show.

And of course there's a VIP menu once you get to the show. Caviar, vintage wines. We're even going to try to get our hands on a bottle from 1923.

We call them our "Easter Eggs." There are thirty-five of them, one for each character in the show. An actor will single out an audience member and invite them into a hidden chamber for a private moment. That's all we're willing to reveal at this moment.

All in all we’ve raised about $3 million. About $1 million came from our Series A offering, a private placement. Thirty-eight investors put in an average of about $25,000 each. Last year, we did a Series B equity crowdfunding offering on WeFunder that raised $450,000 from around eighty people. On the debt side, we secured a $1 million loan from California Bank of Commerce, a really incredible group of people who just got excited about what we are doing. I don't think there's another bank on the planet that would make that kind of loan for a theatre project.

The rest we pulled together: $50,000 from the City of San Francisco to compensate us for our eviction, a $50,000 line of credit from Wells Fargo, $90,000 in equipment financing, a $150,000 loan from one of the Managing Members, and a $225,000 tenant improvement allowance from our landlord. Boxcar also contributed some of its retained earnings.

We are looking to raise another $500,000 to $700,000. In addition to this revenue share debt offering on WeFunder, we have also opened another private placement equity offering. We are calling it Series C and it is only open to accredited investors with a $25,000 minimum investment, and is being offered directly by the company.

Primarily to support the continued development of the show. Even though we are performing every weekend, and audiences are loving it, the show on stage now represents only 85-90% of Nick’s full artistic vision. We still have directors, designers, and choreographers on staff, tinkering with moments and making improvements. We are still perfecting the scenic illusion. And working to smooth all the operational elements, including ticket purchase, check-in, food and beverage service, and costume rental. It is absolutely going to be worth it: that last ten percent is the “wow” factor, the thing that elevates the experience from something you politely describe to friends, to something that makes you grab your friend by the lapels and say, “I saw this incredible show last night! I’m taking you there next weekend!”

The funds currently being raised will also help shore up our balance sheet, by providing working capital and an operating reserve, reducing accounts payable, and replacing short term debt.

Absolutely. This thing is built for repeat business. The scenes are happening in six different rooms simultaneously, and then there are the one-on-one experiences tucked into hidden corners, and all kinds of other surprises. We even pull a small group of ladies into the women's bathroom at one point to do a private scene for them there. So there's no way to see everything in one or two visits, it's physically impossible. It would take six or seven trips back to get the sense that you've finally seen it all -- and even then, you haven't.

This is the kind of thing that locals are going to want to share with their out-of-town guests. Your friends come to visit, and you say, "Oh my god, we have this thing here called 'The Speakeasy', you have to go, and I haven't been for a year myself so I'll come with you!"

In the long run we see our audience as 50% local, 50% tourist. We'll be doing a lot of outreach to the tourist market, through traditional outlets like the concierges and the CVB, and also through social media. We already have a great relationship with AirBNB, people keep showing up at our Club 1923 events saying that AirBNB put us on their itinerary.

This investment is fundamentally different from almost any other investment you can make. This is an investment you can touch, you can drink, and it’s a party. It's your party, in fact. And we treat you that way. The perks are all about enhancing your sense of exclusivity. You get access to tickets that no one else can get. You get upgrades and freebies. Flash your membership card at the bar, and they treat you like an owner. You're going to see us there. We get to know all the investors, they become part of the extended Speakeasy family. Last year we took a theatre trip to London, and a couple of the investors came along. The year before, we brought a handful of investors to New York, took in a couple of Broadway shows and partied like rock stars in a Times Square hotel penthouse.

It was built in 1984 as a single-screen, Chinese-language cinema but the last movie was shown there 12 years ago. When we first walked in, the whole place was intact -- popcorn machine on the concessions stand, projectors in the projector booth, and the last movie shown was still in the projector! It was like you could have flipped a switch and shown a movie that night. But what we saw were the bones for a fantastic theatrical venue. Two years later, after more than $2 million invested in renovations, you’d never recognize it as former movie theater.

The biggest piece of luck in this whole process was stumbling into this building and the building owners. Chris Wight and Jeff Lee are unbelievably creative, generous and experienced. They’ve been in the real estate game for something like thirty years each, and have done a lot of formula retail, strip malls in Stockton and that sort of thing. They were ready for something more creative. They attached themselves to us and our vision and said, “Yes, we want this in our building. What can we do to make it happen?”

The location is incredible. We're on Broadway, steps from the intersection of Columbus, on the border between San Francisco's Chinatown and North Beach neighborhoods. Columbus and Broadway has been the crossroads of history, culture, and entertainment in San Francisco for more than 100 years. This is where the Beat movement started. It was a hot-bed of filmmaking in the 1970s and 80s. Francis Ford Coppola's building is here. Back in the 1800s, this area was known as the Barbary Coast. We're around the corner from Beach Blanket Babylon, an only-in-San-Francisco theatrical phenomenon that has been running for more than 40 years. We hope to follow in their illustrious footsteps.

The anchor tenant in our building is called China Live, an incredibly designed Asian food-and-shopping experience. It's modeled on Eataly in New York. They're taking up three floors of the building. On the first floor you can get small plates of the best Asian street food from Shanghai to Hong Kong to Singapore. There's also a retail shop where you can buy Asian foodstuffs and cooking equipment. On the second floor, they're going to have two different cocktail lounges and a private-dining restaurant that only has eight exclusive tables. The third floor is going to have a banquet hall for special events. China Live is going to be a huge tourist draw itself, and we've been talking with them about all the different ways we can partner.

We’ve got a ten-year lease with multiple options, so we’ve got our San Francisco venue locked down for 25 years.

But, we also want to scale up massively. We see Speakeasies in Chicago, New York, Toronto and London, maybe even places like Austin and Detroit, where tech startups are starting to concentrate. But we also want to extend the Speakeasy concept into retail and restaurants. If this show is a $3 million project, we could see Chicago being a $75 million, or even $100 million venture to build this crazy complex of barber shops, vintage clothing shops, hat shops, old-style diners, and vintage bars, all with secret entrances that lead into a massive immersive theatre environment, with underground escape tunnels that let you emerge blocks away. After that, we want our own Speakeasy cruise ship.

Each year, we set aside 2% of gross revenue to pay back the investors in this revenue share loan. Gross revenue includes the production company’s (Sam Lee Laundry LLC) share of ticket sales, food and beverage sales, event rentals, merchandise sales, and costume rentals. Boxcar Theatre also gets a share of these revenues, as described in the “Theatrical Production Agreement” which is available to review on our WeFunder profile page. The 2% share is distributed pro-rata to all the investors in the loan. This continues each year until investors have been repaid twice the amount of their original investment. At that point, the loan is considered fully repaid, and you are no longer an investor in the company.

Being a debtholder has some advantages over being an equityholder. Your return on investment (and return of investment) comes from gross revenues, rather than net profits. You also have priority over equityholders in the event of a bankruptcy (although this revenue share loan is subordinate to the $1,000,000 California Bank of Commerce loan and certain other debts). In the event that the business is wildly successful, and you get repaid your 2x investment sooner than expected, your annual ROI will increase dramatically.

Please note that the company's only activity is to produce the San Francisco production of The Speakeasy. It will not produce the play in any other cities and it does not own the underlying intellectual property. Repayment of your loan will only be made from revenue associated with the San Francisco production.
A separate company will be formed for each new production in other cities. This is typical in commercial theater, and we’re following the same practice, because we’re going to need liquid cash each time. Instead of diluting the original company every time, we’ll just form a new company to raise additional capital.

This also gives us an opportunity to reach out to local investors in each new city, and develop our community of local supporters and fans. When the time comes, if you would like to make an additional investment in the continued growth of The Speakeasy, we’d be honored to have you along for the ride.