Due Diligence
The research and analysis an Investor should perform before purchasing CRTs, including reviewing Form C, Creator metrics, and risk factors.
Understanding Due Diligence
Due diligence refers to the comprehensive research and analysis an Investor should undertake before investing in any Channel Revenue Token (CRT) offering. This process is essential because CRTs are speculative investments and Investors may lose their entire investment.
Effective due diligence for CRT offerings involves several key areas of review. First, Investors should thoroughly read the Form C filing, which contains the offering terms, financial disclosures, risk factors, and the Creator's historical revenue data. This document is the primary source of verified information about any offering.
Second, Investors should evaluate the Creator's YouTube channel metrics, including subscriber count, view trends, content consistency, and audience engagement. Understanding the Creator's content niche and its long-term viability is important for assessing potential future revenue.
Third, Investors should carefully review the specific terms of the CRT offering, including the revenue percentage being shared, the revenue-share term (duration), and the total amount being raised. These terms directly affect the potential distributions an Investor may receive.
Fourth, Investors should assess the risk factors disclosed in the offering documents. These include Creator risk (the possibility that the Creator's channel performance could decline), platform risk, demonetization risk, and the general speculative nature of Creator Economy investments.
Finally, Investors should consider how a CRT investment fits within their broader portfolio and whether they are practicing appropriate diversification. No single CRT position should represent an outsized allocation of an Investor's total investments.
GigaStar Market provides educational resources to help Investors conduct due diligence, but ultimately each Investor is responsible for making informed investment decisions.
Key Points to Remember
- Due Diligence is regulated by the SEC under Regulation Crowdfunding
- All investments carry risk — past performance doesn't guarantee future results
- Review all offering documents carefully before investing
Related Terms
Creator Risk
The risk that a Creator's YouTube channel performance could decline, reducing or eliminating Monthly distributions to CRT holders.
Diversification
Spreading investments across multiple CRT offerings to reduce risk. No single Creator position should represent an outsized portion of an Investor's portfolio.
Form C
An SEC filing required for all Regulation Crowdfunding offerings. Contains offering details, financial statements, and risk factors for Investor review.
Historical Revenue
A Creator's past YouTube revenue data disclosed in offering documents. Past performance does not indicate future results.
Offering Documents
The legal filings associated with a CRT offering, including Form C, offering memorandum, and subscription agreement provided to Investors.
Platform Risk
The risk that GigaStar's platform could face operational, financial, or regulatory challenges that may affect CRT holders and their investments.
Revenue Percentage
The specific percentage of a Creator's YouTube revenue shared with CRT holders through Monthly distributions. Varies by offering and is disclosed in the Form C.
Risk Factors
Risk factors are the specific risks associated with investing in CRTs, including Creator performance risk, platform risk, illiquidity, and the potential for total loss of investment.
Speculative Investment
An investment with high risk and uncertain outcome. CRTs are speculative—Investors may lose their entire investment and should invest accordingly.
Frequently Asked Questions
Are CRTs cryptocurrency?
No. CRTs are traditional securities registered with the SEC under Regulation Crowdfunding. They represent contractual rights to a share of a Creator's YouTube revenue, not a digital currency or blockchain token. Unlike cryptocurrency, CRTs have regulatory oversight from the SEC and FINRA, required disclosure documents (Form C), and Investor protections built into the offering structure.
What happens if a Creator stops making videos?
If a Creator significantly reduces or stops content production, their YouTube revenue would likely decline, which directly reduces or eliminates your distributions. This is one of the key risk factors of CRT investing—your distributions depend on ongoing Creator activity and YouTube revenue generation. While existing videos may continue to earn some revenue, new content is typically the primary driver of channel performance.
What makes CRTs an alternative investment?
CRTs do not correlate directly with stock or bond markets. They represent a new asset class tied to Creator YouTube revenue in the Creator Economy. Like all alternative investments, CRTs are speculative, less liquid than traditional securities, and should represent only a portion of a diversified investment approach. Their performance is driven by individual Creator channel activity rather than broader market conditions.