Deal to Watch: Independent Black Content Developers

$4.5M

Key Stats: Black Sands Entertainment on Wefunder

Pre Money Valuation

$4.5M

Amount Raised

$480,000

Number of Investors

1,804

Minimum Raise

$90,000

Maximum Raise

$480,000

Likelihood of Max Exceeded
Start Date

01/27/2020

Stop Date

02/13/2020

Days Remaining

Closed

Security Type

Preferred Stock

Investment Minimum

$100

Deal Analytics

Click Here

Summary

Black Sands Entertainment has been selected as a “Deal to Watch” by KingsCrowd. This distinction is reserved for deals selected into the top 10-20% of our due diligence funnel. If you have questions regarding our deal diligence and selection methodology, please reach out to hello@kingscrowd.com.

The Problem

The comic book and related media market (movies and TV shows) is undoubtedly a very popular industry as evidenced by the inundation of movie and TV show adaptations of superhero comics. Superhero movie box office revenue grew nearly 464% from $584M in 2007 to $3297M in 2018. More specifically to the immediate comic book market, comic books and graphic novels reached an all-time high of $1.095B in 2018. The proliferation and popularity of superheroes is an opportunity that many are capitalizing on, but for individuals that don’t identify with the typical Caucasian superhero/heroine, are there alternatives?

Although there are no official statistics on today’s superheroes, we can quickly go through the myriad of popular white male superheroes who have scored big in the box office: Ironman, Superman, Batman, the Hulk, Spider-Man, Thor, Doctor Strange, Wolverine, and many others fit the archetype of white, male, heterosexual heroes. This archetype doesn’t reflect our current world that is incredibly diverse. Superhero films that feature a diverse cast have shown to be profitable with 2018’s Black Panther grossing over $1.3B

The Solution

Black Sands Entertainment is developing content for the African American community. They have created “The Seven Kingdoms,” “Cosmic Girls,” comic series and more that focus on African American characters. In a world dominated by white male superheroes, Black Sands is hoping to bring more diversity and different stories to the current landscape dominated by corporate entities and traditional stories. Stories that depict African Americans in different situations focused on science, family adventures, and more are some of Black Sands’ focus. Black Sands hopes to become a vertically integrated media developer producing comic books and shows.

Disney’s massive success with Black Panther demonstrates the potential of focusing on non-white superheroes. If a developer-focused solely on telling stories different from the ones we see in Hollywood and the comic books industry, then they could reach an underserved audience that may be hungry for such content. Think Tyler Perry and his myriad of films with a primarily black cast: although his films and tv shows aren’t critical masterpieces, there’s a clear demand from an audience. That demand made Perry the highest paid man in entertainment in 2011

The startup’s business model currently revolves around a direct-to-consumer model wherein they distribute their books directly to their consumers. The startup hopes to move to a more sustainable and recurring business model where consumers can subscribe to their service, sell ads, and also from microtransactions. Although smart, most of those things are much easier said than done and require individuals to help them build out a platform. 

The Deal

The Black Sands team is offering a straightforward capital raise. The company is raising an undisclosed round of equity financing with a pre-money valuation of $4.5M. To date, the team has raised $370,401 on minimum investments of $100.

The Team

Manuel Godoy is the founder and CEO of Black Sands Entertainment. Manuel has little to no experience in the comic book and related media industry, nor does he have experience in running a startup. Although he has no experience in the industry, Manuel has undoubtedly written popular stories that have resonated with others. 

Geiszel Godoy is the Chief Financial Officer of Black Sands Entertainment. Geiszel has previous or relevant experience as a CFO and no relevant experience in the comic book and related media industry. Geiszel, does, however, have experience as a creative fashion designer which may help in the creation of some the stories told by Black Sands. 

Teunis de Raat is the Head of Studio for Black Sands Studios. Teunis has over 25 years of experience in the animation industry. His experience includes time at Bron Studios, Pixar Canada, Walt Disney, and more. Teunis is more than capable as the head of Black Sands Studio. 

It seems the Black Sands team isn’t particularly accomplished in their relevant industry nor do they have relevant investors or partners in the space. The most accomplished member of their team is leading the production of Black Sands’ animation, but Teunis doesn’t list Black Sands on his LinkedIn, leading to questions about his dedication to Black Sands, especially as he is part-time. The team needs to build partnerships and find investors who can help guide the team in the comic books and related media industry. 

Why We Like it

  • Traction: The team has sold over 25,000 copies of their comics and reached revenues of nearly $.24M in 2018 with a profit of over $8K. Although not exponential numbers, it’s good to see the company make headway and see initial traction and popularity with their comics. Additionally, it seems the company has kept its expenses in line with its COGS and OpEx amounting to 6,500 per month. The company seems poised to increase their revenue and amount of comics distributed with the release of their DVD.

 

  • Market Conditions: Black Panther’s success demonstrates the market demand for film and media focused on different races and cultures. The interest in media focused on underserved races and cultures is undeniably real. People want heroes and other figures they can look up to that look like them. When the stereotypical hero for the past 10+ years has been white males, it makes sense for children and others to want someone that looks similar to them. Black Panther and Tyler Perry’s successes with a primarily black cast shows the demand is there and Black Sands can fill that demand for children and young adults with its line of comic books and shows. Additional data shows that comic book readers are actually moving away from superhero-oriented comics. Kid-oriented comics and graphic novels account for 41% of sales at bookstores; manga is 28%. Superhero content is less than 10%, down 9.6% year-over-year. At comic book stores, kid-oriented titles for readers aged 6-18 is up 20% in comic store sales and 39% in bookstores, manga is up 41% in comic stores and 5% in bookstores, while superhero graphic novels are down 15% in comic stores and fell 10% in bookstores. This all actually bodes well for Black Sands as their core demographic seems to be in that 6-18 age range with a range of comic books focused on different stories and mythologies, science fiction, adventure, animals, and even family all with an African American perspective. 

The Rating: Deal To Watch

Black Sands Entertainment is developing and distributing media content in a market that has seen success from changing demographics, and with that, changing demands. The company has managed to amass some traction with more than 25,000 copies of its series sold with revenues of $.24M and managing to break profitability. If the team continues to push out differentiated and quality content, it’s likely the team will continue to see success. 

With that said, Black Sands operates in a rather small market that saw sales of comic books and graphic novels reach $1.095B. In its adjacent markets of animation, the market sits at a massive $259B in 2018. Although the startup has moved into animation, the addressable markets they’re targeting in their specific niche is much smaller. On the bright side, the startup may even be able to expand the market since they may be able to bring individuals previously uninterested in comics, into the folds of their comic books.

The company also claims that they develop/produce “anime” and “manga” which is an inaccurate statement. Anime and manga are inherently Japanese produced products and so for Black Sands to market themselves or even say that those markets are attributable to them is disingenuous. Perhaps it’s a marketing ploy, but in no way can what Black Sands is producing be called manga (their comics) or anime (their animated series). 

On the marketing front, the company calls itself the most popular independent black content developer in the US, but that’s obviously hard to assess given the small nature of the market they’re targeting. Developing black-focused content is also becoming increasingly popular. For example, this article showcased more than five black comic book creators that are also producing black-focused comics. This article from blackenterprise.com goes over the topic of black comic books and brings up Milestone Comics, a company founded by a coalition of African American artists and writers who want to address the underrepresentation of minorities in comics. Needless to say, the market Black Sands is addressing wouldn’t be called overly crowded but is one where a niche is being filled.

Additionally, the film industry is incredibly risky. A reason we’ve seen so many adaptations of comic books and other movies is that unestablished brands have little to none of a fanbase. The company claims that it only takes one of their three productions to take off, but for a small startup like Black Sands, one major failure can sink the entire brand and its goodwill with fans. Moving into the development and production of animation presents great reward, but comes with incredible risk.

Nevertheless, Black Sands has shown it’s rather popular and has reached product-market fit. The demand for their comics and the success of their comics and released DVDs are positive signs for the startup. Despite the positive traction of Black Sands, it receives a Deal to Watch rating given the increasingly crowded niche that they’re filling, the risk associated with the film industry, and small addressable market opportunity.

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About: Francis vu

An investment professional with a background in private equity and venture capital having spent time conducting investments at VU Venture Partners and Pacific Oak LLC with a finance and management degree from Tulane University.

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