Chicken Soup For The Soul Entertainment Files For Mini-IPO
Chicken Soup for the Soul Entertainment filed regulatory paperwork to do an equity crowdfunding campaign and subsequent listing of its shares on Nasdaq. The company plans to raise up to $30 million – including $3.1 million from selling shareholders – at $12 a share, according to the filing. The offering, under the Reg A+ equity crowdfunding rules, would value the company at nearly $150 million, and could make it the first equity crowdfunded company to list its shares on Nasdaq.
By doing such a mini-IPO, Chicken Soup for the Soul Entertainment, the video division of the Chicken Soup for the Soul empire, could market its shares to its millions of fans on social media and by email – giving those fans the ability to get in on the IPO along with Wall Street investors. Chicken Soup for the Soul has 2.6 million Facebook fans, and its inspirational content garnered more than 10 billion views across all platforms, including Facebook, YouTube and Instagram.
The Cos Cob, Conn.-based has been growing quickly since premiering its first show, Chicken Soup for the Soul’s Hidden Heroes, on CBS in October 2015. The company’s revenues were $8.1 million in 2016, up from $1.5 million the year earlier, according to filing. It turned a small profit, of $781,133 last year, versus a loss of $753,463 the previous year. In addition to its own shows, it has an exclusive distribution agreement with A Plus, a digital media company founded by Ashton Kutcher and majority owned by a Chicken Soup affiliate.
The offering is only for the video portion of the Chicken Soup for the Soul empire, and does not include the original books division. Chicken Soup for the Soul will remain the majority shareholder of Chicken Soup for the Soul Entertainment after the offering, with a 70% stake in the business.
Motivational speakers Jack Canfield and Mark Victor Hansen collaborated on the first Chicken Soup for the Soul book in 1993. Their compilation of inspirational true stories hit a nerve, and more books followed. In 2008, Bill Rouhana, Chicken Soup’s chief executive and chairman, put together an investor group that purchased the brand. Rouhana had previously founded Winstar Communications, the once large and high-flying telecommunications company that filed for bankruptcy in 2001. Under his leadership, the Chicken Soup brand has expanded beyond books to video and podcasts – and even pet food.
Chicken Soup for the Soul Entertainment plans to list its shares, under the ticker CSSE, on the Nasdaq Global Market, the group’s top market. If it doesn’t get approval to list on Nasdaq’s top market, it notes in the filing, it would still plan to list on the lower Nasdaq Capital Market.
The crowdfunding rules that permit companies to raise funds from non-accredited investors (read: not millionaires) went into effect following the 2012 JOBS Act, which was intended to increase funding for entrepreneurs and small business owners following the recession. If it succeeds in its mini-IPO and Nasdaq listing, Chicken Soup for the Soul could become the first equity crowdfunded company to list on Nasdaq.
