UPDATE: Round 8 is open now. Click here to learn more.
With Round 7 ending next week, we thought it was a good time to to talk about how an investment in Legion M works from a financial perspective. If you are are a current investor, the post below should answer some of the common questions we get. And if you are considering investing for the first time, hopefully this post illustrates that it's not too late to "get in early" on Legion M!
WHAT ARE MY SHARES WORTH?
The shortest and most accurate answer to that question is: nobody knows yet. That's because startups are typically an "all or nothing" proposition. Our goal is to get large enough to IPO or list on a secondary exchange so you can buy or sell from an eTrade or Robin Hood account just like any other public company. Until then, all we can do is focus on building value so the shares are worth as much as possible.
HAS THE SHARE PRICE INCREASED?
Yes! The chart below shows how the price of Legion M shares has increased with each successive round -- and in each round that price has been validated purchases from thousands of investors. Just keep in mind that while our share price today is an indicator of what your shares might be worth, they are only "paper gains" until you can actually sell your shares after we IPO or list on a secondary market.
WHEN WILL THE COMPANY IPO?
Successful startups typically take 7-10 years to reach an IPO. We're 5 years old, and while we can't guarantee anything we believe we're potentially 2-5 years from an IPO. That said, the world is changing rapidly -- between Robin Hood, the JOBS Act, and the blockchain, there are more ways than ever for a company like Legion M to think about providing liquidity for investors. We don't have any formal plans yet -- once we do you will be the first to know. In the meantime, we are 100% focused on building the value of the company so that if/when an IPO comes your shares will be as valuable as possible!
WHAT IS MY POTENTIAL ROI?
At Legion M we talk a lot about the risk of investing in startups. That's because we want people to understand what they are getting into. Startups are inherently risky (the fact is, most of them fail) and so you should never invest more than you can afford to lose (which is good advice for most speculative investments). If you are interested, this video talks about that more. You should also check out our offering document, which has detailed information (including audited financial statements) about the company and the risks/rewards. But with those caveats aside, let's consider the upside of investing in risky pre-IPO startups like Legion M.
Legion M's Round 7 valuation (i.e. the price you are "buying in" at) is ~$40 million. However, entertainment is an industry where successful companies are often valued at billions of dollars and exceptional companies (e.g. Disney) are valued in the hundreds of billions. So while it's impossible to predict the outcome for any company, with Legion M you are investing early enough, and at a low enough valuation that the potential for returns is orders of magnitude higher than it typically is for investments in public companies. If valuation was represented by the size of a building, Disney would be a 4,500 level skyscraper and Legion M would be the very ground floor. There's a lot of upside when you invest in the right startup -- that's how famed venture capitalists like Tim Draper, Mark Cuban, and Peter Thiel make their fortunes.
Does Legion M have the potential to be as valuable as Disney? That's really for you to decide. Statistically it's unlikely as Disney is one of the most successful companies of all time. That said, even with a tiny fraction of Disney's success there is substantial room for growth. And there's nothing to say we couldn't someday be bigger than they are... :)
WE'RE ALL IN THIS TOGETHER
The most important thing for you to know is that everyone on the Legion M team is investing alongside you. Almost the entire staff has taken a substantial pay cut and are working for salaries well below what they would make if they left Legion M to get a new job. This is especially true for our executives -- Legion M's highest paid employees make $20K per year LESS than the average manager of an In-N-Out Burger. And for us it's not just money, but also our careers and reputations on the line.
Our upside in Legion M is the same as yours -- the value of the stock. In fact, our shares have the exact same financial terms as your shares, which means that win or lose we're all in this together. We're willing to sacrifice every day because we believe a in the potential of a FAN-OWNED company to change the world. Hopefully that gives you some comfort as an investor -- I can tell you that we couldn't be more honored and thankful to have you on our side.
Onward and Upward,
Jeff, Paul and the Legion M team
UPDATE: Round 8 is open now. Click here to learn more.
Click here if you'd like to invest in Round 7, or click here to watch a video of our investor presentation (and sign up to join us LIVE for the next one).