So you finally agree that it's a shady structure?
They don't even hide the conflict of interest stuff (emphasis mine):
The structure doesn't bother me. It's the agreements themselves. Why is it structured so differently from WL3? What's going to be the norm? Why are we giving Doublefine leeway to use money as they see fit?
There's no discussion of this in the agreement OR by Fig. So all you have left is to ask that question from Fig themselves. Which I really think investors should be doing.
Fig's CEO said they wanted to "reuse the investment structure for other campaigns", but they all seem different, so I don't know.
The other important question is: why are mysterious third parties investing in the game without using Fig? If Fig is a good deal, why would the "outside partners" avoid it? Do they get a better deal? Do they have a say in the game's development and/or design? Fig investors don't know.
The speculation about money from one game being used in others comes from this part of Fig's filings IIRC:
It seems they can cover losses and other expenses of Fig LLCs using assets from another. In his posts, Fig's CEO did not deny that. He said Psychonauts 2's funds cannot be used in other projects, but he didn't say a word about profits.
So they can put all profits into other game and than claim W3 did not bring any profits, so Fargo can keep all the money and not have to pay to the investors?
It wouldn't be that simple.
According to the Offering Memorandum, here's how the money would flow:
The money goes through Fig Publishing first, then the LLC takes it and shares accordingly.
However, there's an order of priority for Fig WL3 LLC's revenue distribution.
1. Business expenses (the LLC's operation in general);
2. "to establish, fund and increase reserves and escrow accounts as determined by the Managing Member, from time to time, to be appropriate or necessary, all such determinations by the Managing Member to be made in the Managing Member’s sole discretion;"[basically the money that goes to the company's pockets after the expenses]
3. Pay investors.
If Fig Publishing and/or the LLC are indeed allowed/forced to use profits to pay for expenses of other Fig companies, then the director could write them off as business expenses and investors would either not get paid or receive less.
If Fargo wanted to keep the money to himself, the easiest way would be to not deliver the game at all, as nothing in the agreements says InXile has to release the game.
Are the proceeds from the crowdfunding portion of the Figstarter counted as "revenue" for the purposes of paying back the investors?
No. These are considered "Advances" and are not part of "Gross Receipts", which only includes the revenue from the game's sales through "Fig.co or approved Distributors".
