The surge in Perks-based Donor Crowdfunding over the past few years was primarily built on the concept that creative projects dreamed up by common folks with more ideas than money could go to each other rather than impenetrable banks or brokerages. The popular site Kickstarter (one of many) started in 2009 with the premise that such ideas, ones that were still good ideas even though they didn’t have a promise of likely profitability, could be brought to the public to allow the average person to help make the ideas into reality by donating money. This is a broad concept akin to what wealthy benefactors would do in ages past, when they became “patrons of the arts” by providing money so artists could create works of art.
The idea caught on in this collapsed economy, and Perks-based Donor Crowdfunding has successfully launched many projects that would have otherwise withered and died.
Now, many people have expressed outrage because recently people well outside the realm of ‘common folks’ have brought projects that are also well outside the notion of ‘good creative ideas with no obvious chance for profit’ that some feel are the die-hard precepts underlying crowdfunding.
There is loud concern and confusion about wildly successful creators like Thomas and Braff bringing their sure-thing projects to common folks and asking for donations.
Yet, as others say, “why not?” If someone is very successful and has an audience–even a huge commercial audience–why shouldn’t they be able to tap into crowdfunding? A significant part of crowdfunding, after all, is its vibrant and unique interaction with one’s audience.
So, there is in some quarters frustration and even anger. “Hey Zach Braff, STFU and pay for your own movie!”
In other quarters, there is the attitude that obvious profitability and inevitable commercial success should have the same shot at reaching the general public.
There exists today a plan that could serve these two diverse concepts. There is the existing Perks-based Donor Crowdfunding for creators with projects that need broad community support because they do not have obvious and built-in profit potential, and there is the JOBS Act of 2012’s proposed Equity Crowdfunding for projects that need broad community support and have great promise for profit.
When someone has a successful background and wants the community to support what is essentially a ‘sure-thing’ that is bound for profitability, moreso than the common project found on Perks-based Donor Crowdfunding, they and their supporters would be best served by Equity Crowdfunding, which would allow individuals to actually invest in the project and get a return of profits.
I wrote about this in detail in FILMMAKERS, IT’S 2013. DO YOU KNOW WHERE YOUR JOBS ACT IS?
Unfortunately, a federal agency, the Securities and Exchange Commission (“SEC”), was to implement the regulations to deliver Equity Crowdfunding but has ignored the American public because it is solely interested in protecting the entrenched professional funding industry which feels threatened by Equity Crowdfunding. To be sure, the Act has contradictions, convolutions and concerns, as do most Acts, but the SEC has ignored all of the deadlines imposed on it by the JOBS Act which was signed into law more than a year ago. The SEC has stated that it relies on outside organisations of brokers, who oppose the act, for guidance. And, of course, the sound of “protecting the investors” rings hollow when it comes from the agency that knew about Bernie Madoff but did nothing to stop the damage he was doing to investors.
By the way, the JOBS Act was the most bi-partisan effort in our modern history of hyper-partisanship, supported by all sides of Congress and business (except, of course, by the entrenched professional funding industry).
But, were the SEC to suddenly become interested in serving American citizens instead of only too-big-to-fail banks and brokerages, and suddenly move forward to implement Equity Crowdfunding as demanded by Congress, it would become the proper venue for such projects. Braff’s WISH I WAS HERE and Thomas’s VERONICA MARS, which seem to be so unbalanced in the realm of Perks-based Donor Crowdfunding, would be perfectly suited in the realm of Equity Crowdfunding, where common Americans could invest money and expect a return of profits from such highly-likely profitable projects.
America and successful creators would benefit by implementation of Equity Crowdfunding.
[UPDATED JANUARY 2014]
VARIETY wrote “How Zach Braff Kickstarted a Film Financing Firestorm” regarding Sundance 2014 projects financed with crowdfunding
Zach Braff responded with this video to the Veronica Mars/Zach Braff controversy:
Kickstarter responded with this blog to the Veronica Mars/Zach Braff controversy!
Variety writes about the subject: “Zach Braff Kickstarter Success: Will Crowdfunding Transform Showbiz?”
Here’s a strong opinion from the Toronto Standard: “Stop Giving Your Money to Rich People on Kickstarter“