Dvdplay Funding ◉

DVDPlay’s story is not one of technology or consumer habit. It is a story of —of desperate rounds, convertible notes, and the brutal math that happens when you try to out-spend a giant selling dollar bills for ninety cents. This is the anatomy of a capital war. Act I: The Bootstrap Years (2002–2005) Long before the kiosk wars, DVDPlay was the side project of Mark and Sharon Phillips, two serial entrepreneurs who had made a small fortune in the Oregon wine distribution business. Their first machine—a clunky, beige box that held 300 discs and required a customer to swipe a credit card and manually return the DVD to a slot—was funded with $80,000 of their own savings.

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. dvdplay funding

Phillips raised one final round: from a group of angel investors in Portland. The terms were a Hail Mary: 20% discount to the next round’s valuation, but if no round occurred by December 2011, the notes would convert at a $0.25 per share valuation (down from the $4.50/share of Series B). DVDPlay’s story is not one of technology or consumer habit