__full__ - Dvdplay Funding

The kiosks themselves were ground into plastic pellets. But the funding term sheets—the liquidation preferences, the ratchets, the vendor notes—remain, preserved in SEC filings, a quiet monument to the last time anyone thought renting a disc from a parking lot was a winning bet.

In January 2012, DVDPlay filed for Chapter 7 liquidation. Total capital raised across all rounds and debt: . Total recovered for secured creditors: $3.1 million (mostly from selling kiosks for scrap metal and disc inventory to a liquidator in Texas). Unsecured creditors, including the Oregon drivers who had been paid in stock options, received nothing. Epilogue: What the Funding Bought (and What It Didn’t) The DVDPlay story is a textbook case of misaligned funding cycles . They raised equity when they needed debt, debt when they needed a strategic partner, and a growth round when they needed an exit. dvdplay funding

| Round | Year | Amount | Lead Investor | Notable Terms | Outcome | |-------|------|--------|---------------|----------------|---------| | Series A | 2006 | $4.5M | Voyager Capital | Full ratchet, board seat | Burned for expansion | | Mezzanine debt | 2008 | $3.0M | Wellington Financial | 14.5% interest, convertible | Defaulted | | Studio rev-share | 2008 | $2.0M (imputed) | Lionsgate/Warner | 15% of revenue | Raised COGS to 47% | | Series B | 2009 | $12.0M | Oak Investment | 2x liquidation pref, pay-to-play | Lost on streaming pivot | | Convertible notes | 2011 | $2.5M | Portland angels | 20% discount, $0.25 floor | Converted to zero | | | | $24.0M | | | Recovery: $3.1M | The kiosks themselves were ground into plastic pellets

The initial funding model was almost quaint: . Each machine cost $12,000 to build and $500 per month to service. If a kiosk pulled in $1,200 a month (roughly 40 rentals at $1.50 per night, plus late fees), Phillips plowed 90% of that back into building the next machine. By 2004, DVDPlay had 47 kiosks in Oregon and Washington. They were profitable, but tiny. Total capital raised across all rounds and debt: