The AUDL has hundreds of new investors after a crowdfunding campaign.
September 17, 2018 by Charlie Eisenhood in News with 0 comments
Using a modern twist to fundraising, the American Ultimate Disc League just closed on a crowdfunded Small Open Public Offering yielding $509,817 in new investment. The league easily surpassed their minimum goal of $10,000 but fell well short of their $1.07 million target, the maximum allowed under federal law in a 12-month period.
271 investors on StartEngine.com bought non-voting Series B shares in the AUDL that, similar to Kickstarter, offered perks like free game tickets for different levels of investment.
The AUDL has said that they plan to use the money — about $480,000 after Start Engine fees — to invest more in advertising.
“Our marketing plan includes paid advertising to increase the pipeline of potential sponsors and advertisers; increased earned media and PR, promotion of ticket sales and merchandise at the AUDL Championship Weekend; development of compelling content on AUDL and team websites; development of a paid subscription service for access to exclusive premium content; increased promotion of merchandise sold through the AUDL Store; funding a co-marketing advertising program with matching funds for local team marketing; fee based services to the teams in the procurement of group ticket sales; and development of email based direct marketing programs,” the company wrote in the offering details.
The Series B round, offered at a $16.5 million valuation, follows a Series A $2.5 million investment round from late 2016 at a pre-money $3.75 million valuation.
AUDL sources tell Ultiworld that one of the primary draws of the crowdfunding approach is to generate a wider base of investors and get more people involved in the organization. “We’re utilizing a tool that we think fits for where we are in society right now,” said AUDL commissioner Steve Gordon.
The AUDL is, like many startups, operating at a loss. According to SEC-mandated disclosures, the AUDL had a net loss of $813,005 in 2017, down 33% from $1,221,578 in 2016.1 2018’s net loss was not reported but is expected to be lower after the league signed a six-figure, two-year broadcast deal with Stadium last winter.
Some online saw the AUDL’s decision to crowdfund as a concerning move for a company burning through cash. Gordon said it was “by no means” driven by a need for liquidity and was instead focused on enabling a new, more robust marketing direction. “While some people see it as desperate, there are going to be others who see opportunity here too,” he said.
The AUDL recently completed its 2018 season as the Madison Radicals took home their first title with a win over the Dallas Roughnecks.
These numbers refer only to the league itself, not its team-owned franchises. The league is responsible for broadcasting efforts, marketing, Championship Weekend, social media management, and other initiatives, but not the week-to-week game productions, stadium rentals, player contracts, etc. ↩