The backlash this YouTube channel received for trying to sell shares: The story of Disruptv and Jak Wilmot.
On Saturday, July 23rd, a new video was posted to the YouTube channel Disrupt titled “I’m selling this channel”. Disrupt is a popular YouTube channel that posts 3D animated stories that are entertaining to view with VR headsets. Selling a YouTube channel isn’t unheard of, with other channels being sold such as GameTrailers, AwesomenessTV, and Fred. However, this usually has been the path that dying channels take, not one that’s growing. In 2021, Disrupt LLC grossed over $200,000, a nearly 200% growth in profit compared to its meager $52,000 in 2020. With over 1.4 million subscribers as of July 29, 2022, the channel has done nothing but grow until the start of this campaign.
The face and voice of the channel, Jak Wilmot, states that he is selling 10% of the channel to raise funds in order to continue creating content and making it the best it can be. In addition to the channel, there is also the Disruptv+ platform, a paid subscription that specializes in VR 3D animated storytelling. He calls this the preferred path he wants to take, the “Equity Crowdfunding Path”. Simply put, it is an investment opportunity for the viewers of the YouTube channel Disrupt. On May 4th, 2022, Disrupt LLC transformed to Disrupt Incorporated. Thanks to this change, it is legally possible for the company to distribute shares to potential investors.
The initial announcement left viewers and fans confused, angry, and disappointed. In a document shared by Wilmot, viewers found in it that he has roughly $500,000 in debt that he must pay to his business partner and co-founder of Disrupt called Jordan. This is based on an agreement between the two individuals that if Jak can give his partner the money, he will have full control over the channel and run everything himself.
Many were initially confused as to what the $500k would be going towards, since Jak himself stated that the company was a decentralized, low-cost production studio. It was not stated that it would be going towards Jak’s defaulted payments. Therefore, the situation left viewers confused and baffled, as there are so many unanswered questions. Why not just start a patreon, or simply call what he is doing a fundraiser? How is this an “investment opportunity”, when the future profits of the company are unclear and cannot be promised? This plan was basically a bomb dropped from thin air, especially since the deadline to receive funds is less than two months away. Such a short time frame to collect half a million dollars feels nearly impossible for a channel with an audience of this size, especially when nothing immediate is given in return.
Many blame Wilmot for deceiving viewers and not telling the whole truth of the situation he has gotten himself in. Others believe that he should rather ask for donations instead of going down this path. The document detailing the finances of the company states facts that Wilmot did not address in his initial announcement. This became the main cause for controversy, as viewers thought it was deceitful to not state upfront the finances and other motives first. The video itself is more of a fancy advertisement, simply stating the content Disrupt creates and how investors can potentially benefit by being a shareholder.
As of today, a week after the video was posted, the announcement and the Q&A from Jak that followed the day after are no longer available on the channel. However, the fundraiser is still live on wefunder.com, with a bold disclaimer stating the following:
“On June 1st, 2021 Jak purchased Jordan’s 50% ownership in Disrupt for $500,000 (total amount). This would be fulfilled as multiple $29,029.32 payments from Jak to Jordan until the total amount had been realized. […] Disrupt has defaulted on a Promissory Note with a prior member of thecompany and as of May 23rd, 2022 currently owes the Noteholder a NoteBalance of $466,179.87 on which interest is accruing at a rate of 2.5% perannum. Disrupt will use approximately $500,000 of the Campaign proceeds to payoff the Note Balance, to pay legal fees to the Noteholder’s counsel, and to pay Disrupt’s legal and regulatory fees in compliance with Reg CF.” (via wefunder.com/disrupt)
It’s no question that Jak Wilmot has an innovative mind, and wants full creative liberty that Disrupt can provide. The most successful video on the channel, “I spent a week in a VR headset, here’s what happened” has over 24 million views, and the star is Jak. He is the face and voice of the best performing videos of the channel. However, there is a small team behind the creation of each video, and differing creative pursuits are what have driven Wilmot to create this viewer investment opportunity. Most large and profitable companies in the United States eventually become public entities that can be bought by shareholders. But is Disrupt large enough to become a trusted public corporation? Apparently not. A few days ago, the campaign was able to gain over $172k from investors. However as of July 29, 2022, there was less than $136k on the wefunder page.
To go to the Disrupt YouTube channel, click here.
To learn more about the investment opportunity, click here.