The Securities and Exchange Commission is accepting comments on how it will formulate rules for the new equity CROWDFUNDING act that was included in the JOBS ACT. (See my story on ReelGrok.com at http://www.reelgrok.com/jobs-act-crowdfunding)
This is important for indie filmmakers, since the ability to reasonably raise up to $1,000,000 from investors could reinvigorate the indie film biz.
SEC rule-making in the spirit of the Act should protect investors without unreasonable burdens on the filmmakers. Right now, there is an assumption that the rules will follow the extremely stringent and anti-fundraising requirements of “Private Placement Memorandums” and other Reg D exemption requirements with their huge demands that cost filmmakers tens of thousands of dollars in legal fees and time and effort.
The SEC is accepting comments. Advocate for investor protection while not burdening filmmakers (and others) with the current standards the kill the hope of raising money from investors. The elements of the Crowdfunding Act — no “life savings” catastrophes, the intermediary Funding Portals to vet offerings, the proven metrics of desired involvement shown by crowdfunding success, the lack of fraud in the current crowdfunding environment, and the fact that disastrous schemes weasel through the incredibly dense protections now in place anyway (and for greater sums of money) — bring balance to the need to free up capital flow into indie filmmaking. This would legitimately allow potential flow of possible profits back to investors. (Current crowdfunding success shows that many people want to support indie filmmaking even when profits are not possible.)
Safety for investors well within acceptable risk:reward ratios that allow filmmakers to raise $1 million could save the entire indie film biz.
By the way, the limits are per year; that means a filmmaker could fund development and production in year one, and then fund marketing and distribution in year two. This would follow common timetables for indie film and be a strong boost to the indie film industry. Current methods of seat-of-the-pants filmmaking frequently do not include real wages, equipment rental, purchases of equipment, or payment for services. Realistic budgets enabled by realistic investment opportunity would rebuild the independent film business.
FILMMAKERS: join the advocacy!
Ask the SEC to protect investors while allowing filmmakers access to the Crowdfunding Act provisions (both in letter and spirit) without onerous restrictions. If the demands and expense common for the current “Private Placement Memorandum” continue, requiring tens of thousands of dollars and months of effort be spent prior to crowdfunding, the spirit of the CROWDFUNDING ACT will be thwarted for most indie filmmakers.
Ask the SEC to find ways to protect the investors without thwarting the filmmakers.