FILMMAKERS, this is very important:
WHAT CONGRESS DID
The house has passed the Entrepreneur Access to Capital Act which offers a tremendous opportunity to rebuild the independent film industry. The Act is designed to allow businesses to raise capital through crowdfunding. Under current securities laws, filmmakers can only ask for donations, and donors support the film without any participation in its potential profit.
This legislation will allow businesses to use crowdfunding to sell unregistered securities (equity investments as participation in the financial rewards–if any–of the film) to raise up to $2 million.
WHAT CROWDFUNDING IS
Currently, the only way most filmmakers can even make a film (but without any profit), is to use crowdfunding, which is a process of creating a web presence on specific sites and then vigorously and broadly requesting donations from the public. In place of financial participation, gifts known as perks are given the donors. Crowdfunding efforts are considered very successful if they top $50,000 in donations, and some have raised over $100,000 in donations. A million dollars in donations is almost unheard of. All of this effort is strictly controlled to avoid coming under the very strict rules and regulations governing the sale of securities. Offering any equity position of any form is forbidden.
STATUS OF THE INDIE FILM BIZ
The common thinking in today’s independent film business is that the pre-2008 logical range of $3 to $5 million for good production value has now dropped to $1 million or less, so this legislation hits the “sweet spot” for independent filmmaking. It could mean real money for real budgets, with salaries (now rare) for workers, which in turn will mean re-building the infrastructure of the independent film business.
Congress has passed the Act, but now it goes to the Senate. President Barack Obama has endorsed the bill, saying it would reduce “the red tape that prevents many rapidly growing startup companies from raising much-needed capital.” But, we never know what the Senate will do with the bill. They need to know you support it.
Also, “Hollywood” is often ridiculed in today’s political environment, and the presumption that everyone is as rich as Steven Spielberg is popular. In this environment, it is possible that independent filmmaking could be excluded from the ultimate bill.
WHAT YOU MUST DO
In this environment, and with something this important to our future, you need to contact your representatives. Thank your congressperson for passing the Entrepreneur Access to Capital Act and explain your optimism for the indie film biz. Encourage your Senators to pass the bill and assure that filmmaking is not excluded.
FIND YOUR CONGRESSPERSON AND SENATORS HERE: http://www.contactingthecongress.org/
For a couple sample letters to inspire you to email, fax, or mail to your representatives, download here: http://www.box.net/shared/mqd6ltrou4p8r8ozndyb
SYNOPSIS OF THE ACT: http://www.cbo.gov/ftpdocs/125xx/doc12514/hr2930.pdf
ALSO: the Entrepreneur Access to Capital act is *endorsed* by the National Taxpayers Union http://www.ntu.org/news-and-issues/economy/yes-on-hr-2930-2940.html