When one of our artists start a funding campaign, they sell a percentage of their artworks on creatyve in the form of shares.
An art share represents a piece of ownership in that artwork. If the artwork’s value increases, so will the value of a piece of it. By owning an art share, you are taking part in the artwork’s price behaviour: if the art sees lots of demand, by the laws of demand and supply its value will increase. If the artwork sees lacklustre demand, or new negative news comes out on that artist, the value of the artwork and of its shares will decrease.
You can hold these shares in your creatyve portfolio and once the campaign has ended you can sell them in the creatyve market.
Currently, when you buy an artshare, you will be paid off when and if the whole artwork is sold to a buyer. As an art-share owner, you probably hope that the artwork increases in value and that the artist manages to sell it to a buyer at a price higher than the initial one at which you bought your shares. Here is a simple example of the process:
Laura is a London artist. She usually sells her paintings at around £3000 and she is currently working on a new one. She decides to sell 30% of this new painting on creatyve, aiming to raise £1000 in her campaign (setting the total value of her artwork at £3333).
We create one-hundred £10 shares that investors can purchase during the duration of the campaign. After the campaign ends, shares will be freely exchangeable on our platform with prices given by demand and supply.
5 months after the campaign ends, Mr. Koch, a rich hedge fund manager, falls in love with Laura's painting and decides to buy it for £10'000.
Laura receives £10'000 and returns 30% of that to creatyve and in turn, to her shareholders. All investors are then paid out at a price of £30, given that the new 30% is now worth £3000.
Clearly, this example is for illustrative purposes only. The value of the artwork present on creatyve will not always increase in value and many times it may be the case that an investor loses part or all of his money. For instance, this may happen if Mr Koch in the example above were to buy the artwork for less than its initial value (£3333). All investors would thus receive less than the £10 they spent for each of their shares.
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