EVERYONE LLC: PROFIT PARTICIPATION TERM SHEET
This term sheet summarizes proposed terms and is subject to change. Before execution of any definitive agreements, this document should be reviewed by qualified securities counsel. This is not an offer or solicitation to buy or sell securities.
1. PARTIES
Issuer: EVERYONE LLC, a Delaware limited liability company Participants: Accredited investors as defined in Regulation D
2. OFFERING STRUCTURE
| Item | Term |
|---|
| Offering Type | Profit Participation Rights (contractual, non-dilutive) |
| Exemption | Regulation D, Rule 506(b) or 506(c) |
| Aggregate Raise | Up to $4,000,000 |
| Use of Proceeds | See Section 8 below |
| Duration | Continuous until 2X return threshold is met or investment is otherwise terminated |
3. INVESTMENT INSTRUMENT
Profit Participation Rights are non-equity contractual rights to a specified percentage of Net Distributable Profits, as defined below.
- No ownership stake in EVERYONE LLC
- No voting rights or governance rights
- No board representation or observer rights
- Not convertible to equity, warrants, or other instruments
- Not transferable except with written consent of EVERYONE LLC
4. RETURN STRUCTURE
4.1 Participation Percentage
Each investor's participation percentage is calculated based on their pro-rata share of capital raised:
Investor Pro-Rata Share = Investor Capital Contribution ÷ Total Capital Raised
Phase 1 Participation (During Recoupment): Investor's pro-rata share of 100% of Net Distributable Profits
Phase 2 Participation (After 1X Recoupment): Investor's pro-rata share of 50% of Net Distributable Profits
Example: If total capital raised is $X and an investor contributes $Y:
- Pro-rata share = $Y / $X
- Phase 1: Pro-rata share of 100% of NDP (until capital is fully recouped)
- Phase 2: Pro-rata share of 50% of NDP (from 1X through 2X return)
4.2 Distribution Waterfall
After all revenue is collected from all sources (immersive, touring, streaming, merchandise, licensing), distributions flow according to this order:
- Gross Revenue from all sources
- Less: Venue/Platform Splits
- Less: Cost of Goods Sold
- Less: Direct Marketing & Promotion
- Less: Operating Expenses
- Less: Production Budget Recoupment
- = Net Distributable Profits
Typical ranges for each deduction category and annual caps are detailed in the EVERYONE Business Plan (Investment Invitation).
From Net Distributable Profits (Three-Phase Waterfall):
PHASE 1: Full Recoupment (Until 1X Capital Return)
- 100% of NDP to Participants (distributed pro rata according to capital contribution)
- 0% to EVERYONE LLC / Members
- Continues until each investor receives distributions equal to 100% of their original capital contribution
PHASE 2: Profit Sharing (From 1X to 2X Capital Return)
- 50% of NDP to Participants (distributed pro rata)
- 50% retained by EVERYONE LLC (for deferred compensation recoupment, team growth, and operations)
- Continues until each investor receives cumulative distributions equal to 200% of their original capital contribution
PHASE 3: Post-2X Distribution (After 2X Capital Return)
- 0% to Participants (participation rights terminate)
- 100% distributed per the post-2X allocation set forth in the EVERYONE Business Plan (Investment Invitation)
- All remaining distributions flow per the post-2X allocation
4.2a Post-2X Allocation Definition
The post-2X allocation categories and their respective percentages are defined in the EVERYONE Business Plan (Investment Invitation). These categories and their definitions may be updated from time to time as set forth in the EVERYONE Business Plan (Investment Invitation), provided that no update shall alter the three-phase waterfall structure or the 2X cap without investor consent per Section 6.3 of the Participation Agreement.
4.3 Distribution Cap and Termination
- Maximum Return: 2X the investor's original capital contribution
- Automatic Termination: Participation rights terminate upon achievement of 2X return to that investor
- No Continued Participation: Investor receives no further distributions after 2X threshold is reached
- Example: $50,000 investment terminates distributions after investor receives $100,000 total
4.4 Distribution Frequency
- Timing: Quarterly distributions (subject to profitability)
- Payment: Within 45 days following the end of each calendar quarter
- Minimum: Only if Net Distributable Profits exceed $50,000 in that quarter
- No Guaranteed Distributions: If unprofitable, no distributions in that period
5. DEFINITIONS
Net Distributable Profits
Calculated on a quarterly basis as:
NDP = Gross Revenue − Venue Splits − COGS − Marketing − Operating Expenses − Production Budget Recoupment
Where:
- Gross Revenue = receipts from all revenue surfaces (described below)
- Venue/Platform Splits = amounts owed to venues, platforms, distributors (typically 30-40%)
- Cost of Goods Sold = direct costs of goods (merchandise, etc., typically 16-22%)
- Direct Marketing & Promotion = marketing spend (typically 8-12%)
- Operating Expenses = payroll, insurance, admin, professional services, rent (typically 8-12%)
- Production Budget Recoupment = annual budget for new production/creative development (capped at $500,000/year)
Capital Contribution
The amount invested by participant at closing.
Participation Period
The period from investment date until earlier of: (a) 2X return achieved, or (b) dissolution/liquidation of EVERYONE LLC.
Revenue Surfaces
All revenue sources including but not limited to:
- Immersive experiences (admission revenue, ticket sales, in-experience merchandise)
- Touring productions (stage shows, pop-ups, traveling installations)
- Streaming and digital content (subscription revenue, licensing deals)
- Merchandise and goods (online and retail)
- IP licensing and partnerships
All revenue surfaces feed one waterfall; there is no priority or waterfall within participants.
6. INVESTOR PROTECTIONS
6.1 Financial Reporting
EVERYONE LLC shall provide:
- Quarterly Reports: Net Distributable Profits and distribution payment within 45 days of quarter-end
- Annual Audited Financials: Audited financial statements within 120 days of fiscal year-end (if aggregate raise exceeds the audit threshold set forth in the Participation Agreement)
- Annual Tax Information: K-1 or similar reporting for tax purposes
6.2 Inspection and Record Access
Investors have the right to:
- Inspect books and records upon 10 business days' written notice
- Request detailed waterfall calculations and supporting documentation
- Attend optional annual investor meetings (non-voting)
6.3 Amendment Restrictions
No material term of the participation agreement may be amended without written consent of holders of at least 50% of outstanding participation rights.
7. TRANSFER AND ASSIGNMENT
- Prohibited except with written consent of EVERYONE LLC
- Right of First Refusal: EVERYONE LLC has first right to purchase any proposed transfer
- Lock-up Period: 12 months from investment date before any transfer request may be made
- No Secondary Market: Participation rights are highly illiquid; transfers may be difficult or impossible to arrange
- Estate Planning: Rights may transfer to beneficiaries upon investor's death, subject to accreditation verification
8. USE OF PROCEEDS
Detailed allocation of capital raised is set forth in the EVERYONE Business Plan (Investment Invitation) (see Use of Proceeds section), which includes a line-item production budget. Allocation is subject to change based on business needs and at the discretion of EVERYONE LLC management.
9. INVESTOR QUALIFICATIONS
9.1 Accredited Investor Status
All investors must be accredited investors as defined in Rule 501 of Regulation D:
- Individual net worth > $1,000,000 (excluding primary residence)
- OR Individual income > $200,000 (individual) / $300,000 (joint) for past 2 years
Accredited investor status must be verified prior to closing through questionnaire and supporting documentation.
9.2 Investment for Own Account
Each investor must represent that participation is purchased for their own account and not as nominee for another party.
9.3 No Guarantee
Participation in EVERYONE LLC is speculative and highly risky. There is no guarantee of any return, and investors may lose their entire investment.
10. KEY RISKS: SUMMARY
- Speculative Investment: No guarantee of profit or return of capital
- New Market: Immersive experiences are relatively new and unproven consumer category
- Revenue Dependent: Success depends entirely on consumer demand for EVERYONE experiences
- Creative Risk: Audience reception of content is uncertain
- Competition: Established entertainment and immersive venues pose competitive risk
- Key Person Risk: Success depends heavily on Zak and Zev Zaidman
- Illiquidity: Participation rights cannot be readily sold or transferred
- No Fixed Timeline: Distributions depend on profitability; no guaranteed payment schedule
- Regulatory Risk: Changes in securities law or entertainment regulation could impact structure or operations
- IP Risk: Infringement claims or failure to protect intellectual property could harm value
- Technology Risk: Technical failures, venue closures, or operational disruptions could interrupt revenue
- Economic Sensitivity: Discretionary entertainment spending may decline in economic downturn
See Risk Disclosure Document for comprehensive risk factors.
11. GOVERNANCE & CONTROL
- No Voting Rights in EVERYONE LLC
- No Board Representation
- No Veto Rights over business decisions
- Management: Entirely controlled by LLC members (Zak and Zev Zaidman)
- Investor Meetings: Optional annual meetings for information only (non-voting)
- Information Access: Inspection rights limited to financial and waterfall information
12. OPTIONAL PROVISIONS (FOR NEGOTIATION)
12.1 Secondary Sale Rights
In the event of a strategic acquisition or sale of EVERYONE LLC:
- Participants receive their 50% participation in proceeds from the sale
- Until 2X threshold is met
- No participation in proceeds above the 2X cap
13. DEFINITIVE DOCUMENTS
The terms in this sheet are subject to negotiation and are preliminary. Final terms will be documented in:
- Participation Agreement: full legal agreement governing the investment
- Subscription Agreement: standard form for subscription and closing
- Accredited Investor Questionnaire: certification of investor status
- Operating Agreement Exhibits: waterfall methodologies and calculations
14. GOVERNING LAW & JURISDICTION
- Governing Law: Laws of the State of Delaware (without regard to conflicts principles)
- Dispute Resolution: Binding arbitration in Wilmington, Delaware (JAMS rules)
- Attorneys' Fees: Prevailing party in any dispute may recover reasonable attorneys' fees
15. SECURITIES LEGEND
IMPORTANT: This is an offering of securities in a private placement. Participation rights are offered under Regulation D and have not been registered under the Securities Act of 1933 or applicable state securities laws. These securities are restricted and may not be resold, pledged, or transferred unless registered or an exemption from registration is available.
EXECUTION AND ACCEPTANCE
This term sheet outlines the proposed basic terms for participation investment in EVERYONE LLC. It is non-binding and subject to:
- Execution of definitive agreements
- Completion of due diligence by all parties
- Satisfaction of regulatory requirements
- Review by qualified securities counsel
Prepared: January 31, 2026 Updated: March 2026 Next Step: Circulation to potential investors and legal counsel for review and comment
This document does not constitute legal advice. Prospective investors should consult with their own legal, tax, and financial advisors before making any investment decision.