GODSPELL Tickets are ALL $125 And There Are No Discounts? I Mean...Really? — Page 4

Hi labwyfan - You are right but here's the problem. If you sell securities "to the public," you have to register with the Securities and Exchange Commission for a "public offering." Most Broadway producers raise money from a very limited number of people who are sophisticated (meaning you have significant assets and investing experience), so it is a "private" offering. But if you start selling to large numbers of moms and pops (or, classically, "widows and orphans") who can't really afford to lose the money and may not understand the risks, AND you go out to the general public (like a newspaper ad or the Internet) to find investors, you can't be a "private" offering any more. SO some clever lawyer has figured out an alternative theory - but it has never been done this way before. Money (like the state fees you mentioned) has something to do with it, but so does securities regulation.

Boiler plate fine print, none of which addresses the issues, unfortunately.

But if you start selling to large numbers of moms and pops (or, classically, "widows and orphans") who can't really afford to lose the money and may not understand the risks, AND you go out to the general public (like a newspaper ad or the Internet) to find investors, you can't be a "private" offering any more.

I still don't see the issue. I've read the investment paperwork, and it says very clearly, just like every Broadway investment paperwork, that there is a very good chance you will lose your entire investment and that you shouldn't invest unless you can afford to lose it. In fact, it says that about three times. The actual offering is pretty much exactly the same as any other Broadway show, except that the minimum investment is lower.

It's still a private investment because you are still only offering to people who can afford to lose it, and they have to sign multiple times acknowledging that they may lose the money. Even though he is making the offer available on the internet, it's not like going online, adding a couple shares to your shopping cart, and clicking "Buy." THAT would be a public offering. In this case, you go online, say that you are interested, and he sends you the full investment packet -- which, I repeat again, is no different from the investment packet for any other Broadway show, except that the minimum is lower. If you can't afford to lose the grand and you invest anyway, that's your fault, not Davenport's.

And yes, I'm pretty sure it costs extra to make a private offering in multiple states, not to mention taxes on the investor's income gets complicated. Most Broadway shows only pull their investors from the tri-state area for this reason.

yes, because when i think of successful entrepreneurs, my mind immediately turns to france.

Well, the French did invent the word...

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Except that the offer to become an investor is not public. The information on how to request information is (as it is in most cases). The investment packet (which is the actual offer) is only sent to people who request it and are serious about investing.

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