What is Crowd Dragons and how does it work?
Crowd Dragons (run by Crowd Dragons Sp. z o.o.) is a specialized social finance portal that allows you to invest in projects from the computer games market and projects related to VR / AR technologies reported using the portal by the Originators. The portal enables three models of project financing: revenue crowdfunding (purchase of a share in future revenues from the project), share crowdfunding (purchase of shares in the Company), traditional crowdfunding (financial support for prizes e.g. in the form of a ready game).
How does Crowd Dragons select projects?
Each project that submits to CrowdDragons.com through the application form undergoes detailed verification, which is carried out by CrowdDragons.com specialists. During this process, we evaluate the game, its documentation, team and try to verify the potential of the project. The team's experience, the project's completion potential, our estimates related to the game's sales potential and the scale of the already-built player community and game fans are key to us. The CrowdDragons.com team cooperates with the Originators at every stage. We care about what happens before, during and after the campaign. Our experts support the originators in creating the best campaign and help in building a marketing and PR strategy tailored to the needs of the project.
Why crowdfunding is a good way to raise capital / a place to invest in games, VR / AR?
From the Investor's point of view, participation in projects in the computer games industry or other creative industries may be a highly promising but also a highly risky undertaking. These types of projects are so complex in terms of production as well as marketing and sales strategy that it is difficult to assess their commercial potential, even when based on a very advanced, playable demo. On the other hand, the spectacular successes of many companies from the gaming industry and various entertainment projects cause that the group of investors interested in this investment segment is systematically growing. Investors, however, prefer to diversify their risk by purchasing shares in many projects. Crowdfunding is a natural place for such diversification, therefore this form of investing is systematically gaining importance, especially in the case of projects at an early stage.
The role of Crowd Dragons as Publishers
CrowdDragons.com as a Publisher can appear only in the case of revenue crowdfunding. CrowdDragons.com accepts two types of projects as part of revenue crowdfunding - those in which it plays the role of the Publisher and those in which it cooperates with the Publisher of a given project. This approach significantly reduces the risk for investors in revenue crowdfunding, because CrowdDragons.com or the Publisher cooperating with us completely controls the revenue from the project and can transparently settle them between Investors and creators, according to the proportions adopted during the campaign. A factor that significantly reduces the risk of investors is also the transfer of funds obtained within the revenue crowdfunding campaign to the developer, only after the implementation of milestones set during the campaign.
How long does the campaign / project verification take?
The verification of the project takes about 2 weeks. Regardless of the final position (acceptance or rejection of the project), we will inform you about our decision via email.
How long does it take to prepare the campaign until it is launched?
Estimated campaign preparation time is 4 weeks. At the time, it consists of: formal and legal preparation of the campaign, creation of promotional materials, work with mentors, preparation of the team for effective presentation and subsequent implementation of the project according to a set schedule and designated milestones.
How can investors find my campaign?
An active campaign will always be available to Investors on the main page of crowddragons.com. In addition, information about the launch of new campaigns will be made available through our social media and via the Investors' mailing database.
How long does the campaign last?
The standard duration of the campaign is 30 days. According to the regulations, in some cases the duration of the campaign may be extended or shortened.
What maximum amount can I collect?
CrowdDragons.com was created for small, independent production teams. We focus on projects that do not exceed financial needs amounting to PLN 1 million. We prefer projects at a high level of sophistication - so that investors can evaluate the visual and sound side of the project.
How should I evaluate my company / your project?
CrowdDragons.com will help you value your project / company. Our team consists of people who have been associated with the capital market and the gaming industry for years, which is why we have high competences in this area and so-called "Expert knowledge".
How is the financial goal for the project determined?
The financial objective is set in consultation with the Originator, individually for each project. CrowdDragons.com specialists, based on the conducted analysis, assess the project status, the level of work progress and the need for capital and human resources. We verify very precisely the realness of the time needed by the Originator to achieve the set goal and financial outlays that must be taken to implement the project.
What is the minimum and maximum financial goal of the project?
Before each campaign, financial goal is determined. This is the amount that will allow the project to be fully implemented and commercialized. In some cases, especially in the case of share crowdfunding, the campaign can be launched with predefined two goals - the minimum and maximum. In this case, achieving the minimum goal will allow the campaign to be completed successfully, but all elements of the project will not be implemented. The maximum amount is the amount that will allow for the full implementation of the project objectives planned by the Originator.
What happens if the campaign does not reach the financial goal?
In each campaign the most important is the commitment of the Originators. If the engagement is at the appropriate level, the materials concerning the project are prepared professionally, and finally the project itself will excite investors, the campaign has no right to go wrong! If, however, for some reasons the campaign does not reach the financial goal, then the funds deposited by the Investors are returned to them.
Can I exceed the financial goal and collect funds further?
This is only possible with some projects. If the project will be launched in such a model it will be visible in the details of the campaign.
Can I meet with investors during the campaign?
Not only you can, but you must! Our experience from the capital market clearly proves that personal meetings with potential investors are the key to success in obtaining financing. We are aware that every day the greatest resource of a team that creates projects in the game industry or VR / AR are programming or graphics competences or generally the idea of a game, but every product, especially in the entertainment industry, has to sell people standing behind it. Investors appreciate building personal relationships. This allows them to at least partially verify the commitment and passion for creation that is necessary to achieve the final success. The Crowd Dragons team fully takes on the organization of meetings and preparation for each team that conducts a campaign with us.
What are the costs of running a campaign at Crowd Dragons?
A strong distinguishing feature of CrowdDragons.com on the market is the fact that launching the campaign itself is cost-free. The costs of running a campaign at Crowd Dragons only appear when the campaign is successful.
The portal collects commissions in the amount of 8% of collected funds. The commission is collected from the Originator. In the case of revenue crowdfunding, the portal additionally receives 10% of future revenues generated by the project in exchange for involvement in promoting the project and works related to settlement of revenues generated by the project, but only from the moment the funds invested by the Investor and the Originator will be returned to them. More information on the costs of carrying out the campaign can be found in the Regulations.
Does the project have to have a legal form (activity / company) to report to Crowd Dragons?
There is no obligation for the project to have a legal form to submit the project itself. However, if the project is positively considered, it will be necessary to set up a limited liability company or business activity for the launch of the campaign. In the case of share crowdfunding, it is necessary to establish a limited liability company in Poland.
Is the campaign a public offer?
No, no financial instruments are offered as part of the campaign. In the case of share-based crowdfunding, we are dealing with shares in O.o., which are not a financial instrument, in other cases the subject of the campaign is also not financial instruments.
If the campaign is successful, funds will be transferred to your account?
In the case of equity crowdfunding, funds will be transferred to the Originator immediately after the end of the campaign, however, there may be a need to return them if the Originator or Investor does not fulfill the formal activities described in the investment agreement. In the case of traditional crowdfunding, funds will be transferred to the Originator immediately after the end of the campaign. In the case of revenue crowdfunding, the Originator does not receive all the funds collected immediately. The appropriate part of the funds will be transferred according to the schedule previously agreed with the CrowdDragons.com team. Therefore, each payment follows, as in the case of cooperation with the publisher on the gaming market, after the Project Supplier has successfully completed production milestones.
Will investors acquire the IP of my game / my project?
No, CrowdDragons.com investors do not own any IP rights (intellectual property, intellectual property) of your project. In the case of share crowdfunding, they become the shareholders of the company and in the case of revenue crowdfunding acquire the share in the future revenues that will be generated by the project (relative to the percentage of shares purchased). In the case of traditional crowdfunding there is financial support for the project, for example in the form of a ready game.
The takeover of the project by CrowdDragons.com investors may take place only in extreme cases of the Originator's breach of arrangements made prior to the start of the campaign, i.e. the Originator will not carry out the work on which the final release of the game depends. In this situation, CrowdDragons.com will call the Originator to properly carry out the work to which he has committed, setting for this purpose an additional 60 - day deadline, above the originally designated milestone.
If the relevant works indicated in the summons are not carried out within this period, or the violations described in the summons have not been rescinded, CrowdDragons.com acting on behalf of the Investors may call the Originator to transfer to CrowdDragons.com the proprietary copyrights (or other intellectual property rights) or the sale of CrowdDragons.com of all shares in the company's share capital.
Can I run more than one project at the same time?
We are aware that the risk diversification concerns both Investors and Project Initiators. From a technical point of view, we have no contraindications for running more than one project at the same time. However, you must remember that for CrowdDragons.com the most important thing is the interest of investors - they help us finance our projects and, consequently, develop the industry. Take care of running more than one project at the same time, only when you are confident in maintaining the quality of each of your projects.
To what extent do I legally be an Originator?
Personal responsibility of the Originator, usually acting as a Member of the Management Board of the Company, results from the Code of Commercial Companies. However, it should be remembered that every originator more than morally corresponds to an investor who trusts him and entrusts his own financial resources. The role of the Investor in the whole ecosystem is huge - it is thanks to him that the companies in the initial stage of development can develop. You can find more information about possible legal liability in the regulations.
Who can be an Investor?
An investor can be natural persons with full legal capacity, acting on their own behalf and legal persons or an organizational unit without legal personality, the special legal provisions of which they grant.
Can a person living outside of Poland invest in projects at Crowd Dragons?
Yes, only citizens of the European Union can invest on the CrowdDragons.com portal.
Do I invest in game developers or directly in the product (game / application, etc.)?
Crowd Dragons offers both of these forms of investment. The investor can invest directly in the project and its future revenues (revenue crowdfunding) and purchase shares in the entire company (share crowdfunding).
Can I be an investor of revenue crowdfunding, equity and traditional crowdfunding at the same time?
We do not limit investments made by investors through the CrowdDragons.com portal. Investments in projects in the gaming industry are characterized by high risk and the key to potential financial success of the investor is the diversification of the invested funds.
How much can I invest?
The minimum investment amount on the CrowdDragons.com portal is PLN 1,000 per campaign. Such a low level of minimum investment results, on the one hand, from our openness to Investors related more to the gaming market than to the market of typical Financial Investors, and on the other hand from the project's diversification needs at every step, in which Investors invest through CrowdDragons.com. In the model approach to building the investment portfolio, alternative investments, which include investments made through share crowdfunding or revenue crowdfunding, should constitute between 5% and 15% of the entire investment portfolio of a given investor. The premium for the high risk is the adequately high potential of the rate of return and this is also seen in the gaming industry, however, any project at an early stage of development must be approached with caution.
What does the investment process look like?
The entire investment process takes place online, and the completion of all formalities takes only a few minutes (the exception is only share crowdfunding, whose circumstances are described in the Investment Agreement between the Investor and the Originator).
Do I have to go to a notary?
A visit to a notary public is only needed when purchasing a company's shares in a share crowdfunding model. If the campaign of the project in which you have invested has been successful, you must go to the notary specified in the investment agreement at the appointed time to formally confirm the acquisition of shares in the company. Alternatively, at any notary public you can give a proxy for your participation in the representative of Crowd Dragons, who will take care of the rest of the paperwork for you. All information regarding the dates and details of the process will be sent to the e-mail address provided during registration after the successful campaign.
As an investor, I am anonymous?
CrowdDragons.com does not provide the user base to any entity outside the Varsav Game Studios S.A. capital group. The Investor's data is stored in the Crowd Dragons system without any access for third parties. The personal data set is registered in GIODO. However, the investor will not remain anonymous in the case of share crowdfunding, if he purchases more than 5% of the company's shares - then, according to the law, his data will be made available in the National Court Register.
Can any part of my investment be used in other projects of a given Originator?
Typically, the investment is dedicated to a specific project for which the campaign is running. If it turns out that the project has been completed and commercialized without using the full budget, then it is possible that the remaining part of the funds will be used to start the creation of another project. If such a situation should take place, then all Investors will be informed by email to the e-mail address provided during registration.
How can I get a return on investment in share-based crowdfunding?
An investment made through share crowdfunding works on a similar principle as an investment in any company on previously known principles - be it investment on the stock exchange or purchase of shares in a partner company. After making the investment through Crowd Dragons, the investor becomes part of the project - his ambassador or sometimes a mentor. Promoting the project in all possible ways is therefore in his interest, and the success of the project translates into the company's value on the market. The higher the value of the company, the greater the chance for the Investor for a higher return on investment. The greater the success of the company, the more the awareness of its brand increases, and the easier it is for people or entities interested in purchasing shares in the company from the Investor.
The second way to obtain a rate of return from a project financed as part of share crowdfunding is to achieve such maturity by the company that it will be able to pay the Investor a dividend. This is because the most natural return path for the Investor from each investment.
The last exit path from the investment for our Investors is to bring to the market, for example on the NewConnect market, entities that have carried out share crowdfunding campaigns at Crowd Dragons. Persons associated with the portal due to their long experience from the capital market, are able to carry out such a process effectively and for the best projects to acquire, for example, Polish institutional investors.
Can I get a refund by selling my purchased shares to others?
The shares acquired through participation in the share crowdfunding campaign are no different than the shares acquired in the traditional way, so they are fully marketable.
How can I get a return on investment in case of revenue crowdfunding?
The return on investment and, most crucial in investments, the profit obtained in the case of revenue crowdfunding is made without the participation of the Investor himself. After the commencement of the commercialization of the project, which the Investor has financed as part of the revenue crowdfunding campaign, adequate funds derived from the income from the sale of the given game will go to the Investor's bank account.
The permanent principle of campaigns conducted by CrowdDragons.com is that first 100% of revenue from a given project goes to Investors and the Publisher according to the structure of invested funds, and only the profit from a given project is shared proportionally between the Investor and other shareholders of a given project in accordance with the structure of shares in project.
For example, if a given project was financed with the amount of PLN 100,000 through the crowdfunding campaign PLN, additional 100,000 PLN invested in the Publisher project, and investors in exchange for their contribution are to receive 10% of future revenues from a given project when the project receives a global revenue of 500,000. PLN, the investor receives 100 thousand PLN (return of the invested amount when covering its global costs, i.e. PLN 200,000) and an additional PLN 30,000 PLN (10% of the difference between PLN 500,000 of global revenue and PLN 200,000 of global project costs). Therefore, the return on investment would be 30% in this case.
This type of revenue is achievable, for example with the following assumptions:
Base price of the game (EUR)
The number of sold copies
Sales revenues (PLN)
*in the above calculations the EUR / PLN rate of 4.25 and 40% of the distribution costs of a given game on digital platforms + other costs depending on revenues (eg the cost of the engine) were adopted
When will income from investments in revenue crowdfunding be paid out?
From the day the product was financed under the campaign, the project publisher usually settles with the digital distribution platform on the basis of monthly reports with a payment period of 30 days. The settlements between the Publisher and Crowd Dragons take place in the periods of a calendar quarter, therefore the first settlement of revenues will take place in the period of about 4 months after the first income has been obtained by the game. The next settlements will take place in the cycles of subsequent calendar quarters.
How are my profits taxed?
In the case of share crowdfunding, tax liabilities appear only when the purchased shares are sold and they will be taxed in the same way as other capital gains. Income from the sale of shares in the company with o.o. (similarly to shares of listed companies) is taxed at the rate of 19%. By April 30 of the following year, you must submit a PIT-38 declaration (or a corresponding declaration in a given country of tax residence for investors from other European Union countries), in which revenue, costs and tax on this transaction are reported.
In the case of revenue crowdfunding, tax liabilities appear when the CrowdDragons.com portal receives revenues in the amount covering the costs of the original investment and obtaining another payment of funds, which is already a return on investment. Then, these revenues are settled on general principles using the tax scale, in the PIT36 declaration in item D9 - Other sources (or the corresponding declaration in a given country of tax residence for investors from other European Union countries).
I forgot my password, now what?
If you are trying unsuccessfully to login, use the password reset option available during login. The verification link will be sent to your e-mail address which you provided during the first login to the portal.
I do not receive emails, now what?
Report a problem to the email address pomoc@CrowdDragons.com, providing your login or e-mail address indicated during the first login. Within 48 hours we will contact the answer and solve the problem.
How can I delete my account?
After logging in to your panel in the settings you will find the option to delete your account.
How can I report errors / technical problems?
Via e-mail: pomoc@CrowdDragons.com, or via the form
I would like to launch a campaign on Crowd Dragons for my project. Can I send information about my project to Crowd Dragons?
Yes! We are constantly looking for projects that need financing. If you want to submit your project, complete the form in which you will provide us with details of the project you are working on. We will respond to every request within a maximum of two weeks.
Inquiries from the media / press
All press inquiries are accepted at the email address press@CrowdDragons.com