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Investor FAQ

You should invest in Bumper Collective deals because there is a potential for financial returns and you believe in the project’s success. Music and film deals can be risky, so we expect and encourage the creators we work with to produce projects to the best of their ability, and to have a business plan with a path to profit. Some of the criteria we consider when deciding to work with a creator includes them having experience developing projects in their field and analyzing their historical data from past projects to justify their business plan. If you know something is going to be the next big thing, why not invest in what you know?

Bumper Collective deals are considered “alternative investments,” and are much different than stock market investments. The best comparison would be to investments such as startups. However, when compared to other alternative investments, the advantage of using Bumper Collective is:

1. Vetted deals: Our creators are required to submit a business plan with a path to profit.

2. Investing in what you know: Bumper Collective focuses solely on music and film, industries that everyone interacts with often, which hopefully means more informed investment decisions.

3. Potentially quicker returns on investment. Investing in startups is high-risk and typically includes variables and unknowns. Bumper Collective deals are royalty deals where you earn payments if the creator’s project earns profits. Specific information about what you can expect will be provided before you invest.

No, anyone over 18 can invest on Bumper Collective. Investors from outside of the US should check their local laws for any restrictions before subscribing to any offering posted on Bumper Collective.

You can start investing for as little as $10.00.

Since investing in private placement offerings and new ventures is highly speculative, Regulation Crowdfunding limits how much you can invest during any 12-month period in these transactions. The maximum you can invest in all crowdfunding offerings (including investments you make on other funding portals), depends on your net worth and annual income. 

 

If either your annual income or your net worth is less than $107,000, then, during any 12-month period, you can invest up to the greater of either $2,200 or 5% of the lesser of your annual income or net worth.

If both your annual income and your net worth are equal to or more than $107,000, then, during any 12-month period, you can invest up to 10% of annual income or net worth, whichever is lesser, but not to exceed $107,000.

The following table provides a few examples:

 Annual Income

 Net Worth

 Calculation

 12-month Limit

 $30,000

 $105,000

 greater of $2,200 or 5% of $30,000 ($1,500)

 $2,200

 $150,000

 $80,000

 greater of $2,200 or 5% of $80,000 ($4,000)

 $4,000

 $150,000

 $107,000

 10% of $107,000 ($10,700)

 $10,700

 $200,000

 $900,000

 10% of $200,000 ($20,000)

 $20,000

 $1.2 million

 $2 million

 10% of $1.2 million ($120,000), subject to cap

 $107,000

 

Spouses are allowed to calculate their net worth and annual income jointly. This chart illustrates a few examples of the investment limits:

Investor
Annual Income

Investor
Net Worth

Calculation

Investment Limit[4]

$30,000

$105,000

Greater of $2,200 or 5% of $30,000 ($1,500)

$2,200

$150,000

$80,000

Greater of $2,200 or 5% of $80,000 ($4,000)

$4,000

$150,000

$107,000

10% of $107,000 ($10,700)

$10,700

$200,000

$900,000

10% of $200,000 ($20,000)

$20,000

$1,200,000

$2,000,000

10% of $1,200,000 ($120,000), subject to $107,000 cap

$107,000

Calculating net worth involves adding up all your assets and subtracting all your liabilities. The resulting sum is your net worth. For purposes of crowdfunding, the value of your primary residence is not included in your net worth calculation.  In addition, any mortgage or other loan on your home does not count as a liability up to the fair market value of your home. If the loan is for more than the fair market value of your home (i.e., if your mortgage is underwater), then the loan amount that is over the fair market value counts as a liability under the net worth test.

Further, any increase in the loan amount in the 60 days prior to your purchase of the securities (even if the loan amount doesn’t exceed the value of the residence) will count as a liability as well. The reason for this is to prevent net worth from being artificially inflated through converting home equity into cash or other assets.

 

While your individual circumstances will vary, the following table sets forth examples of calculations under the net worth test in order to determine crowdfunding investment limits:

 

 

Jane Doe

John Smith

James Lee

Primary residence

(not included except for related liabilities below):

   

  Home value

$300,000

$300,000

               $300,000

  Mortgage

200,000

 200,000

                330,000

  Home equity line:

   

       more than 60 days old

20,000

                             –

       less than 60 days old

10,000

                             –

Included assets:

   

  Bank accounts

 $20,000

$20,000

               $20,000

  401(k)/IRA accounts

100,000

100,000

                100,000

  Other investments

50,000

 50,000

                   50,000

  Car

20,000

20,000

                   20,000

Total included assets

$190,000

$190,000

               $190,000

Included liabilities:

   

  Student and car loans

$100,000

$100,000

               $ 100,000

  Other liabilities

20,000

20,000

                   20,000

  Portion of mortgage underwater

                  30,000

  Home equity line (less than 60 days old)

10,000

                            –

Total included liabilities

 $120,000

$130,000

               $150,000

Net worth

 $70,000

$60,000

               $40,000

Source: SEC Investor Bulletin: Crowdfunding (Updated: May 10, 2017)
Additional Resource: “Know Your Net Worth”

 

Yes, if a project fails to meet its funding goal, all investments in that project will be refunded to investors without any deductions.

You may cancel an investment commitment for any reason until 48 hours prior to the offering deadline identified in the issuer’s offering materials or separate notice sent to you. If there is a material change to the terms of an offering, you will receive notice of the material change and your investor commitments will be canceled unless you reconfirm your investment commitment to the new terms within five business days of receipt of the notice. If an issuer is unable to raise its target amount to successfully complete the offering, you will receive a notification of cancellation of the offering and a full refund of your investment commitment. If you would like to cancel your investment, please email: bumper@bumpercollective.com.

Investments in albums, films, and other startups are speculative and these enterprises often fail. Unlike an investment in a mature business where there is a track record of revenue and income, the success of an album, film, or other startups often relies on the development of a new content that may or may not find a market. You should be able to afford and be prepared to lose your entire investment.

You will be limited in your ability to resell your investment for the first year and may need to hold your investment for an indefinite period of time. Unlike investing in companies listed on a stock exchange where you can often easily trade securities on a market, you may have difficulty locating an interested buyer when you do seek to resell your crowdfunded investment.  

This means that you are restricted or prohibited from reselling your shares for the first year, subject to certain exceptions such as transfers:

  • to the company that issued the securities;
  • to an accredited investor;
  • to a family member;
  • in connection with your death or divorce or other similar circumstance;
  • to a trust controlled by you or a trust created for the benefit of a family member;
  • as part of an offering registered with the SEC.

Investing in albums, films, or other startups is highly speculative (very risky) and could result in the complete loss of the investment. Private securities have a high failure rate so you must be able to afford the complete loss of your investment without a change to your lifestyle. Early stage private placement investments are NOT bank deposits (and thus are NOT FDIC insured), they are NOT guaranteed, and your investment may lose ALL or some value. Neither the SEC nor any other federal or state securities commission or regulatory authority has recommended or approved any investment or the accuracy or completeness of any due diligence or the information or materials provided through Bumper Collective. Investors must be able to afford the loss of their entire investment without a change in their lifestyle.

We may or may not continue to provide services to issuers after an offering is completed on our crowdfunding portal. In addition, under certain circumstances, an issuer may cease to publish annual reports, and, therefore, an investor may not continually have current financial information about the issuer.  In some circumstances, issuers are permitted by rule to cease filing annual reports. Other issuers may completely fail in their obligation to do so. Bumper Collective is not obligated to and does not enforce those obligations on issuers following closing of the offering.

No. Bumper Collective does not provide any recommendation to invest or investment advice. You are responsible for conducting your own due diligence and evaluating whether an offering is right for you. We strongly recommend that you consult with your investment, legal, and tax advisors before investing in any offerings.

Bumper Collective charges the following fees for services it provides in connection with the crowdfunding offerings posted on the funding portal:

(i) 5% of the gross proceeds (total amount raised) of each offering payable in cash (referenced in the Form C/Offering Documents, and

(ii) negotiable percent of securities offered in such offering (referenced in form C/Offering Documents). All fees are payable at each closing by the issuer.

Guests: Guests have signed up for an investment account.

Investors: Investors have signed up for an investment account and have verified their account using the email link sent to them.

Registered investors: Registered investors have signed up for an investment account, verified their account using the email link sent to them, entered their personal financial information, and taken the investment quiz.

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