How is Legion M Different than a Public Company?
(And Why That is a Good Thing!)
We often get asked how investing in Legion M is different than investing in a public company. After all, fans can buy stock in Disney or Sony—what makes Legion M so different?
The answer is that there are several key differences for both the investor and the company. Understanding those differences helps explain just how extraordinary a company built to be owned by fans can be.
RISK VS. REWARD
To start with, pre-IPO companies like Legion M are MUCH higher risk/reward than public companies like Disney or Sony. To give you an example, if you'd invested in Facebook's IPO and held it through today, you'd have a return of about 5X over the past 6 years. Not bad, right? But if you'd invested alongside Peter Thiel when Facebook was a startup (about the size of Legion M), you'd have had a return of 2,0000X over 8 years. A $100 IPO investment would we worth $500, whereas the startup investment would be worth more than $200,000.
This is an extreme example of course, as Facebook is one of the most successful companies of all time. But it illustrates the fact that the range of potential returns possible from investing in startups are often massively higher than the potential returns of public companies.
Of course with the potential for reward comes much greater risk. Facebook is easy in hindsight, but back when Peter Thiel invested, it was just another startup. For every Facebook, Google, and Uber there is a Pets.com, Webvan, and Myspace — plus countless others that went out of business before we had a chance to learn their name. The fact is, most startups fail, and take their investor’s money with them. But those that succeed often change the world, and can provide staggering returns.
It’s worth noting that for most people, the ability to invest in startups is new. Until a few years ago it was off-limits to all but the wealthiest few percent of the population. Now, thanks to the JOBS Act, all of us can invest like the 1%. If you are interested in learning more, check out this blog post.
FAN OWNERS vs WALL STREET INVESTORS
While it’s possible for fans to buy shares in public companies like Disney or Sony, you wouldn’t say those companies are owned by fans. They are primarily owned by financial funds, corporate conglomerates, and Wall Street investors. These types of investors typically don't care much about the business/products of the company beyond what they provide to them in terms of a financial return.
Legion M is different in that it was designed from day 1 to be owned by FANS. Most of our shareholders aren't financiers--they are film festival buffs, Comic Con attendees, and the people who LOVE movies and entertainment. They are the mavens and tastemakers -- an incredibly powerful audience that studios spend enormous amounts of time and money attempting to woo.
Just because our investors are fans doesn’t mean we don’t look after the bottom line. In fact the opposite is true -- We believe an entertainment company owned by fans is BETTER than one owned by Wall Street. Not because it’s a fun idea (even though it is!), but because it’s an incredibly powerful business model.
A fan-owned company has a built-in audience will come see its movies, bring their friends, and talk online. A Legion of fans has the ability to generate the sort of grass roots buzz that a studio would kill for but money can't buy. By building a company with a fanbase baked into our projects, we believe we have the potential to create one of the most influential companies in Hollywood. And it’s never been possible before now.
THE IMMEASURABLE POWER OF FANS
Just as most Wall Street investors see companies as a little more than a source of profits, most public companies view their investors as nothing more than a source of capital. Walt Disney doesn’t poll its investors on what movies it should release. Sony doesn’t take them behind the scenes of their newest feature. But Legion M does.
That’s because our shareholders are the source of our superpower. We have a Legion of fans to tell us what’s good. A legion of scouts to help us find the next big thing. A Legion of evangelists to help our projects succeed, and – as we’ve seen over the past two years – a Legion of volunteers ready and willing to contribute to the success of THEIR company.
To leverage this superpower, we’re constantly polling and engaging with our community in the Legion M forums, our members-only Facebook group, or the events we schedule online and around the world. We’re constantly developing new tools and technologies that allow us to tap into this incredible resource.
Equity crowdfunding isn’t just a new way to raise money—it’s a fundamentally different way to build a business. Investing in Legion M is profoundly different than investing in Sony or Disney.
We believe that by uniting fans we can build an entertainment company completely different than anything that has existed before. Our long-term goal is to unite 1 million fans as shareholders of our company—in fact our logo is the roman numeral for 1 million. If we’re successful, we’ll have hundreds of millions of dollars to develop projects that have a million fans standing behind them. We think that could make us one of the most influential companies in Hollywood.
Thanks to the JOBS Act, you have a first-ever chance to join us. It won’t be easy, but nothing worth doing ever is. If you can bear the risk and want to swing the fences with us, we’d love to have you on the team. We can’t promise success, but we can guarantee it will be one hell of a ride!!
Join Legion M for free at www.legionm.com/join-legion-m, or invest to become an co-owner at www.wefunder.com/legionm