Save the dates! Join Gini Graham Scott, author of Finding Funds For Your Film or TV Project, on Thursday, December 5th for a free party from 7-9pm to introduce the Crowdfunding Film Society, http://crowdfundfilmsociety.com, and its San Francisco Chapter, found at http://www.meetup.com/CrowdfundingFilm. On the 6th, from 10-4pm, there will be a program with speakers on crowdfunding, followed by a pitch to select films to be featured in the Film Society’s showcase to be promoted nationally: http://crowdfundfilmsociety.com/category/film. Below is a brief excerpt from Finding Funds For Your Film or TV Project.
Creating a Crowdfunding Campaign
Crowdfunding, also known as crowd financing, involves individuals collectively networking and pooling their resources, usually through the Internet, to help the efforts of other individuals or organizations. While it has been used to fund all sorts of activities, from the creative work of artists and musicians to community programs and software development, it has become an especially popular means of funding films. For example, out of the nearly 6,500 individuals and organizations who met their funding goals as of November 5, 2012, about 10% of these were for films, or about 650 films.
Until recently, crowdfunding strictly required those seeking funds this way to clearly indicate that any funds received were to be considered contributions in return for rewards or voluntary donations to support the cause and perhaps receive recognition as a result. But on April 5, 2012, President Obama signed into legislation the JOBS Act, which permits equity crowdfunding, in which a company can sell small amounts of equity to a large number of investors. The SEC has been charged with setting forth specific rules and guidelines specifying what kind of investments are possible.
One rule that has already been advanced is that crowdfunding offerings will count toward the higher limit of investors permitted without having to register the offering with the SEC, permitting companies to raise money from publicity and other media such as the Internet. Moreover, crowdfunding offerings will count toward the higher registration threshold that permits up to 2,000 or more accredited investors, or up to 500 unaccredited investors, without registering.
This new equity crowdfunding approach is quite different from the contribution model of crowdfunding used so far, in that a company seeking money through equity financing can sell up to $1 million in securities in any 12-month period to an unlimited number of investors, rather than seeking contributions that involve no company ownership. Moreover, companies using the crowdfunding exemption must make this offering through an intermediary that is registered as a broker (who can promote securities and solicit investors) or a “funding portal” (who cannot) with the SEC. And in contrast to making donations in traditional crowdfunding, these contributors will be investors getting shares in return for their funding.
Generally, the advantage of the crowdfunding approach is that it reduces the risk of starting a company or seeking money for a film. It also helps to filter out the bad ideas, because they won’t find investors – although another big reason for not reaching your goal could be that people don’t know about your offering because you didn’t sufficiently promote it.
Finding Funds for Your Film or TV Project includes a complete overview of the many different ways to get funds for your film – from preparing the materials you need, such as business plans, private placement memorandums, trailers, sizzle reels, and crowd-funding pitches – to how to make effective presentations to prospective funders, from as family members, friends, and business associates, to angels, private investors, established producers, and film financiers. Scott provides a comprehensive introduction to the many options for fund-raising, and includes information on how to prepare the materials necessary, from business plans and Private Place Memorandums to video and PowerPoint presentations to using crowd-funding techniques.
Covered are these key topics:
• The overall film industry and trends in film production
• Deciding what to produce, preparing a script or treatment, determining your needed cast and crew, and coming up with a rough estimate of your budget
• Putting together the needed documents, including creating a schedule and budget, preparing a producer package, business plan, and private placement memorandum
• Creating a crowd-funding campaign
• Developing a trailer and sizzle reel
• Creating your marketing and promotional materials and getting a publicity buzz going
• Developing and presenting your pitch to prospective investors
• Closing the deal and getting your money