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Fanbase Boosts Investor Confidence with 3.5 for 1 Share Split

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Chapter 1: Overview of Fanbase's New Funding Round

Fanbase has kicked off another funding round on StartEngine, bringing along some exciting news for investors. This social media platform, which blends features of Instagram and Patreon, has gained considerable popularity among investors. This marks their third funding round, following two successful rounds that raised nearly $5 million. Now, they aim to raise an additional $2.5 million, bringing their current valuation to an impressive $80 million. But what exactly supports this valuation?

Fanbase funding announcement graphic

Chapter 1.1: Share Split Details

Recently, Fanbase implemented a 1 for 3.5 stock split. This means that if an investor held 100 shares before, they now own 350 shares. Given that shares were initially priced at $4 and are now approximately $3.95, early investors are enjoying substantial gains—around 3.5 times their initial investment. The company’s initial valuation was $20 million, which has now risen to $80 million, indicating minimal dilution. In fact, without dilution, investors could have seen a 4x return, with only about $10 million in dilution impacting the current 3.5x gains.

While second-round investors have seen about 40% returns, it’s worth noting that they’ve held their investments for roughly a year and a half. Their previous funding round concluded in April, so a 40% increase over the past year is commendable, even if these figures are largely theoretical at this stage.

Chapter 1.2: Fanbase Revenue Insights

Generating revenue in the social media sector can be a challenging endeavor. Striking a balance between user accessibility and monetization is crucial. While giants like Facebook thrive on extensive advertising due to their large user base, many startups struggle to achieve this equilibrium. Fortunately, Fanbase has shared some financial metrics worth reviewing.

The most striking figure is a remarkable 1100% increase in revenue. Although this growth required significant investment in developing new site features, the costs were justified. The revenue figure stands at $161,000, which, while modest, indicates solid growth and supports their revenue model. Personally, having invested a small amount in their initial round, I believe more evidence is needed to confirm their business model. If they can replicate this growth and reach over $1 million in revenue, it could signify a turning point for the company.

Fanbase revenue growth chart

Chapter 2: Fanbase's Market Position and Traction

The video titled "Black-Owned Social Media Upstart Fanbase Launches UNPRECEDENTED $17M Equity Crowdfunding Campaign" discusses the company’s ambitious fundraising goals and their unique market position.

Fanbase appears to be thriving in user engagement, boasting 270,000 users. Many social media platforms, like Facebook, see over 65% of their users active monthly, and with $160,000 in revenue from those 270,000 users, it indicates that Fanbase users are actively engaging with the platform. Additionally, subscription revenues have surged by 164% over the last year, with a 35% growth rate in monthly recurring revenue since their Android launch in July 2021. As an investor, this momentum is encouraging.

Chapter 3: Evaluating Fanbase as an Investment

With the current valuation nearing 500 times its revenue, potential investors may wonder if Fanbase is worth the cost. Although the price may seem steep, the potential for growth is substantial. Numerous companies in the tech space have quickly achieved unicorn status, often drawing hefty valuations even with limited traction. For me, as an investor, Fanbase's success in the Equity Crowdfunding arena is promising and could yield significant benefits over time.

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