Crowdsourcing and equity in the film industry – the new frontier

We’ve previously written about the different ways you can fund your production.

Most common are loans, a distributor advance or through equity.

Alongside grants and any money borrowed against the Producer Offset, equity also includes independent investment.

Now, Australian legislation allows you to give equity on crowdfunding, opening up the doors on ‘independent investment’ to a whole new audience.

What does this mean?

You can now not only crowd source funding, but you can give equity to the crowd.

Previously could not offer shares in a production as part of a crowdsourcing campaign. To offer equity (shares) you would have to go to market with a full investment prospectus, which is not a cost that most productions can bear.

“Sophisticated investors” were your only investment option. People or businesses with deep pockets, who could invest over certain thresholds. But this has changed.

Crowdfunding

Crowdfunding is what it sounds like. You get money from the general public (the crowd) to finance your big idea. The concept isn’t new, but the possibility of offering equity on a production is.

Every person who contributes could own a little piece of the movie – and get a share of the return.

Obviously, this comes with it’s own accounting challenges.

This isn’t just theory – we’ve done it

We have worked with a production company who used crowdfunding to raise over $150,000 for their film.

We worked alongside them to understand their obligations, and make sure the legislation was followed correctly.We believe this film is the first of its type in Australia.

 

Are you looking at this option for your next production? Working with us starts with a conversation.

No matter what stage of production you’re in, there’s never a wrong time to talk to us.  Book your free consult today.

 

A note on this article

Information provided by the Above the Line Accounting on this website is general in nature and does not take into consideration your personal financial situation. It is for educational purposes only and does not constitute formal financial advice.

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