Crowdfunding vs. Investors

AlexDarke

AlexDarke

Active member
Hey everyone.

Have you considered attempting crowdfunding for a feature? The thought has crossed my mind many times and I always talk myself out of it.

I had the chance to sit down with Michael Rousselet who successfully raised $500,000 for the feature film Dudebro Party Massacre 3 and ask him all about the process.

You can see that interview here, if you want to check it out: http://cinemasummit.com/interview-crowdfunding-vs-raising-funds-feature-film-michael-rousselet/


Do any of you have Kickstarter success stories?

Best,

Alex
 
Something always irks me about essentially asking for charity to...make a movie. Not like, give to the poor, build a shelter, cancer research, etc., but give your hard earned money to the charity of filmmakers. Uh, get a real job?

Investors makes more sense to me, even if crowd funding can work. I feel like crowdfunding would be more sensible if you treated them as investors, meaning, don't give them a T-shirt and a good seat at the premiere in exchange for their $5,000 donation, instead give them $7500 in return after your film makes a profit such that their investment becomes profitable if you're profitable.

Whenever I want to make a short film instead of trying to crowdfund for it, I'll self fund it from the money I have which I made through working hard, as opposed to asking people for charity because I'm too lazy to make my own money to put into my passions. Not that this would be as practical for a feature film's budget, but I still see lots of people out there trying to raise a few thousand dollars for their short films through essentially charity services like Kickstarter and as I said, it irks me.

End rant.
 
Crowdfunding isn't necessarily a charity situation. For Sharknado 3 there was a crowdfunding round with various levels of rewards, such as attending events, copies of the film, having your scream included in one of the scenes, etc. They had a lot of fun ideas with their fundraising effort. But the usual case, on Kickstarter at least, is that folks get something for their money. They are taking a risk just like accredited investors would be putting up investment capital.
 
Almost every project I've looked at seeking crowd sourcing had other options to get financing. If a handful of filmmakers aren't able to put 25k together in a year or so it is pretty sad. It's usually a matter of not willing to sacrifice or clever enough to gather those resources on their own. Or a pattern of bad choices financially. Hope I didn't offend anyone because it has nothing to do with how good a person or filmsker you are.
 
J Michael said:
Crowdfunding isn't necessarily a charity situation. For Sharknado 3 there was a crowdfunding round with various levels of rewards, such as attending events, copies of the film, having your scream included in one of the scenes, etc. They had a lot of fun ideas with their fundraising effort. But the usual case, on Kickstarter at least, is that folks get something for their money. They are taking a risk just like accredited investors would be putting up investment capital.
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If the "rewards" were actually worth what people were donating, then it wouldn't be charity. Typically merchandise is sold for around half of what it costs to provide. But if say you donate $5000 to fund a film, and in return you get $25 of merchandise, free tickets to a screening which would otherwise have cost $15, your scream in the movie (which they otherwise would have paid for from a stock site or hired a voice over artist), etc...that still sounds like charity to me. You pay $5000 and get $50 back in return. Pretty much the same as going to a charity dinner event, donating $5000, and getting a meal in return.
 
Investment requires a business plan that forecasts potential revenue. Short films don’t generate revenue. They are art projects and may, IMHO, be eligible for donations. The artists, often students, may offer “perqs” and are not meant as compensation. The funding is often managed under a non-profit umbrella group such as Fractured Atlas. This type of arrangement is very similar to community theaters, local orchestras or regional dance companies.

No one is ever forced to donate to a project and the donors are usually friends, family or members of the artistic community that want to foster new work from new artists. In some countries this sort of thing is funded with tax dollars.

If you find this repugnant then don’t avail yourself of it but try to be mindful not to disparage artists who may not share your privilege
 
hscully said:
If you find this repugnant then don’t avail yourself of it but try to be mindful not to disparage artists who may not share your privilege
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I don't think privilege has much to do with it. When I was in college I made a feature film on a $400 budget, which I then made back about $500 in DVD sales to turn a $100 profit. The short films I did in college were closer to $20-$50 budgets on average. My first film had 20 actors, 10 locations, was 17 minutes long, and filmed on a $25 budget. So, you don't need a lot of money to make movies. To make a better film, money certainly helps. But, I just see earning your way to bigger budgets through investors and clients as a better (more ethical) business model than asking for charity along the way.

And now-a-days everyone has a camera with their phones which actually have better image quality in many ways than say the handicam or DVX100 I used in college. Starting out, all one really needs is a camera and ideas, and with that they can make movies without having to rely on charity from others. Without money their original movies may not be great, but they can gradually improve until they get good enough for investors to offer them money for the work they do.

I just get tired of Kickstarter charities. A friend of mine did a KickStarter to fund his honeymoon, I saw a video online of a KickStarter to buy a couple's first home. It can get ridiculous at times when people aren't willing to work hard to achieve their dreams, and instead hope people will hand it to them on a silver platter through methods such as KickStarter.

A person who is not privileged means what, they have little money? At least in America most people who lack money lack money because they haven't worked hard to make more money. They get complacent with their job, they don't try hard enough to find work, etc. Any KickStarter trying to raise say $5,000 to fund their short film is probably being done by someone who could easily find more paid work in their free time to raise the money on their own, but they just think it'd be easier to ride on the charity of others instead.
 
Eric Coughlin said:
I don't think privilege has much to do with it. When I was in college I made a feature film on a $400 budget, which I then made back about $500 in DVD sales to turn a $100 profit. The short films I did in college were closer to $20-$50 budgets on average. My first film had 20 actors, 10 locations, was 17 minutes long, and filmed on a $25 budget. So, you don't need a lot of money to make movies. To make a better film, money certainly helps. But, I just see earning your way to bigger budgets through investors and clients as a better (more ethical) business model than asking for charity along the way.

And now-a-days everyone has a camera with their phones which actually have better image quality in many ways than say the handicam or DVX100 I used in college. Starting out, all one really needs is a camera and ideas, and with that they can make movies without having to rely on charity from others. Without money their original movies may not be great, but they can gradually improve until they get good enough for investors to offer them money for the work they do.

I just get tired of Kickstarter charities. A friend of mine did a KickStarter to fund his honeymoon, I saw a video online of a KickStarter to buy a couple's first home. It can get ridiculous at times when people aren't willing to work hard to achieve their dreams, and instead hope people will hand it to them on a silver platter through methods such as KickStarter.

A person who is not privileged means what, they have little money? At least in America most people who lack money lack money because they haven't worked hard to make more money. They get complacent with their job, they don't try hard enough to find work, etc. Any KickStarter trying to raise say $5,000 to fund their short film is probably being done by someone who could easily find more paid work in their free time to raise the money on their own, but they just think it'd be easier to ride on the charity of others instead.
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There may be projects that, again, don’t make any money that may cost more than $25 that are worthy of accepting voluntary donations from people who see the value in them. For example, I know of a documentary photo journalist who crowd funded a project to illuminate a particular genocide in South West Africa. Nobody walked off with any money but the costs such as airfare, travel, etc. were substantial. Their donors thought that it was a good cause. What’s wrong with that?

Yeah, some people use the platforms frivolously but maybe not. Even the honeymoon could be a valid use of the platform if it gave the couple’s family a way to “donate” to their “cause.” I would bet that they didn’t get a lot of strangers donating.

Not all people who don’t have money don’t have it because they “haven’t worked hard enough.” Yes there is such a thing as privilege even in America
 
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hscully said:
There may be projects that, again, don’t make any money that may cost more than $25 that are worthy of accepting voluntary donations from people who see the value in them. For example, I know of a documentary photo journalist who crowd funded a project to illuminate a particular genocide in South West Africa. Nobody walked off with any money but the costs such as airfare, travel, etc. were substantial. Their donors thought that it was a good cause. What’s wrong with that?

Yeah, some people use the platforms frivolously but maybe not. Even the honeymoon could be a valid use of the platform if it gave the couple’s family a way to “donate” to their “cause.” I would bet that they didn’t ge a lot of strangers donating.

Not all people who don’t have money don’t have it because they “haven’t worked hard enough.” Yes there is such a thing as privilege even in America
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Fair enough. Perhaps I'm more so complaining about privileged people asking for more money. In other words, people who spend money on a smart phone, vacations, a nice car, etc., and then ask for donations to make their action short film because they don't want to work hard on their own to make the money themself, or would rather spend it on a nicer car. The documentary example you brought up sounds like an actual charitable cause, whereas doing an action film with your friends on other people's donated money, not so much.
 
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Eric Coughlin said:
Fair enough. Perhaps I'm more so complaining about privileged people asking for more money. In other words, people who spend money on a smart phone, vacations, a nice car, etc., and then ask for donations to make their action short film because they don't want to work hard on their own to make the money themself, or would rather spend it on a nicer car. The documentary example you bought up sounds like an actual charitable cause, whereas doing an action film with your friends on other people's donated money, not so much.
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Yeah, I’m a DIY film guy too so I get it. Another thing is that you can’t go to that well very often so you can’t make a habit of it. I worked on a couple of shorts that used crowd funding. The bulk of the money went to food, transportation and renting stuff including locations, hair and makeup, Soundy. The filmmakers didn’t get anything. Definitely some are more “worthy” than others.
I know I’m not donating to anyone’s honeymoon! ;)
 
Eric Coughlin said:
Something always irks me about essentially asking for charity to...make a movie.
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...But then there are crowdfunding projects where you like the creator's other work enough to kick-in some cash to make the film project happen. With "Dudebro Party Massacre 3" this was from one of the original creators of the 5 Second Film Series, which are absolutely brilliant given what they are.

Then there are crowdfunding projects that convince you to support them as soon as you see their pitch...



I also supported the crowdfunding effort for the Veronica Mars movie, which was more of a marketing gimmick that helped convince the studio funders that people really wanted to see this movie...


I got a t-shirt and a DVD for supporting it.
 
Eric Coughlin said:
I don't think privilege has much to do with it. When I was in college I made a feature film on a $400 budget, which I then made back about $500 in DVD sales to turn a $100 profit. The short films I did in college were closer to $20-$50 budgets on average. My first film had 20 actors, 10 locations, was 17 minutes long, and filmed on a $25 budget. So, you don't need a lot of money to make movies. To make a better film, money certainly helps. But, I just see earning your way to bigger budgets through investors and clients as a better (more ethical) business model than asking for charity along the way.
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See, though, those 20 actors and the owners of the 10 locations donated their time, effort, and space to you. I assume they did so happily, but not being paid, that was a form of charity as well. Also, you didn't mention how you fed them -- was the food donated, too?

I don't see this as too different from crowdfunding.

What difference does it make if people donate time/work/props/locations/catering, etc., or just donate money? Either way, it's giving value to you for your project, value you couldn't get just with the money in your pocket.
 
"At least in America most people who lack money lack money because they haven't worked hard to make more money. They get complacent with their job, they don't try hard enough to find work, etc."

Wow. Boy howdy does this reek of both blinkered lack of awareness privilege and basic lack of knowledge... this can quickly get political, so I'm just gonna leave it at 'you need to get out more, look around and do some learnin', son'.

"I'll self fund it from the money I have which I made through working hard, as opposed to asking people for charity because I'm too lazy to make my own money to put into my passions."

and

"If a handful of filmmakers aren't able to put 25k together in a year or so it is pretty sad. It's usually a matter of not willing to sacrifice or clever enough to gather those resources on their own. Or a pattern of bad choices financially. Hope I didn't offend anyone because it has nothing to do with how good a person or filmsker you are."

LOL. You almost got it right with "it has nothing to do with how good a person or filmsker you are." - stop, listen and think. Fundraising is a skill. It is a valuable skill. There is a reason why the position of "producer" and "executive producer" exists. If raising money was not a skill, and just about anybody could do it, most producers wouldn't get paid for raising money. Hello, yes, just as with acting, directing, candlestick making, some people are good at it, and many are not. You can be a perfectly fine director, and not be able to raise squat. You might be a great director, but lousy animal wrangler on set, or a lousy fundraiser. It says nothing about you as a filmmaker if you can't raise money.

There are many great directors (example: Bergman) who come out of systems where there was state funding - they didn't go out and raise the money, they got funded by the state. They were still great directors, and might have never had careers were it not for that system, and world culture would be the poorer for it. Some who got funding were lousy directors. Same as everywhere. How you got the money is no sign of your directing skills.

Here's a hint for people about how others make financial decisions: DON'T JUDGE. Nobody is expecting you to contribute to causes you don't like. But don't judge others. Live and let live. Open your mind. Learn something. And mind your own business - what someone does with their money does not affect you, you never have all the info about somebody else's situation, so why pass judgment?
 
for those going the investor route, makes sure you do it right and check with a lawyer. Not only can it be against your countries securities and trade commission rules to issue & sell shares to investors, but you can also be sued by your investors later you have not set this up right. You may need something like a private placement memorandum, again it depends on your country rules.

Get a lawyer. This stuff is to be taken very seriously.
 
Eric Coughlin said:
Something always irks me about essentially asking for charity to...make a movie. Not like, give to the poor, build a shelter, cancer research, etc., but give your hard earned money to the charity of filmmakers. Uh, get a real job?

Investors makes more sense to me, even if crowd funding can work. I feel like crowdfunding would be more sensible if you treated them as investors, meaning, don't give them a T-shirt and a good seat at the premiere in exchange for their $5,000 donation, instead give them $7500 in return after your film makes a profit such that their investment becomes profitable if you're profitable.

Whenever I want to make a short film instead of trying to crowdfund for it, I'll self fund it from the money I have which I made through working hard, as opposed to asking people for charity because I'm too lazy to make my own money to put into my passions. Not that this would be as practical for a feature film's budget, but I still see lots of people out there trying to raise a few thousand dollars for their short films through essentially charity services like Kickstarter and as I said, it irks me.

End rant.
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i completely agree with your rant.
david
 
I partly disagree.....

What do you call it when hollywood studies sell theatre tickets and double their spending??

In the case of the little guy, its more like asking for the ticket to be paid in advance...

You already pay streaming services small amounts. Whats wrong with asking people for 5 dollars if doing in the end creates a movie they want to see? Over here we pay around 50-60 dollars for a theatre ticket.
Id rather pay those 5 dollars and watch something made by enthusiasts who really really wanted to succeed out of love for their project... than financing Avengers 7.
 
Equally bad options

Equally bad options

Eric Coughlin said:
Something always irks me about essentially asking for charity to...make a movie. Not like, give to the poor, build a shelter, cancer research, etc., but give your hard earned money to the charity of filmmakers. Uh, get a real job?

Investors makes more sense to me, even if crowd funding can work. I feel like crowdfunding would be more sensible if you treated them as investors, meaning, don't give them a T-shirt and a good seat at the premiere in exchange for their $5,000 donation, instead give them $7500 in return after your film makes a profit such that their investment becomes profitable if you're profitable.

Whenever I want to make a short film instead of trying to crowdfund for it, I'll self fund it from the money I have which I made through working hard, as opposed to asking people for charity because I'm too lazy to make my own money to put into my passions. Not that this would be as practical for a feature film's budget, but I still see lots of people out there trying to raise a few thousand dollars for their short films through essentially charity services like Kickstarter and as I said, it irks me.

End rant.
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Eric, I totally see your point on this. And don't completely disagree. But, unfortunately at these budget levels I think your options are equally bad either way. It irks me too, on a personal level. I don't want to be holding my hand out to my friends and family to support my dreams. But on the other hand, what also irks me is approaching investors with what is essentially the worst possible investment for anyone ever. You may as well be trying to get them into a network marketing business because they are, in all seriousness, more likely to make money doing that than by investing in your micro-budget or low-budget film.

If we are talking a movie sub-$100,000, the chances of that movie succeeding in its effort to become profitable are unbelievably slim. Everything is against you in that scenario. You likely don't have any actual bankable talent (no, a guy who co-starred in 3 episodes of The Flash isn't "bankable"). The sales agents are going to put a hefty marketing cap on your agreement, and likely bundle your movie in with a more appealing movie, wherein your film will probably get a tiny split of the MG, if any at all.

In these types of movies, the majority of them never see an actual return at all, because there are so many people taking cuts of the pie, by the time it gets to you and your investors, there's not a whole lot left.

Where I do disagree with your statement is the idea of crowdfunding being charity at all. I would equate the cause to giving money to the local school district to give kids the chance to play the saxiphone in the school jazz band. Who is that helping other than the kids? No one really. No one is buying those kid's CDs of them squeaking through a jazzy rendition of "Let It Be". But in my opinion, it's still a worthy cause and perhaps not as crucial as helping flood victims or curing cancer. But, hey, to each their own. If people want to support the arts and artists, good for them.

But then on the otherhand, you have crowdfunding campaings where people are tapping into their already existing audience to essentially pre-sell or validate their idea. Which is a totally acceptable practice in my opinion. And one that I think most people would take advantage of if they had the opportunity.

Who wouldn't want to say, "Hey, I want to make a movie about XY and Z. But before I put all that time and effort into it, I want to make sure there's a big enough audience for it. So, I'm going to pre-sell it. If we get enough people who are interested, we will do it!"

That doesn't strike me as charity or anything unsavory. It seems more like a smart business move to me.

That's my counter rant.
 
So many people on here are fixated with the business side of things. That it has to make money. For me filming is equal amounts art and a way to make a living.

Crowdfunding is a great way to finance the art. However, it works best if you already have an established fan base. And in that case it’s not charity, people pay because they like what you do and want to see it.

To quote the great Oscar Wilde:

“We can forgive a man for making a useful thing as long as he does not admire it,
The only excuse to make an useless thing is that one admires it immensely.

All art is quite useless”

Some people are more than happy to pay for art. So I don’t see the charity reference at all. In that case buying a painting at a gallery is also charity.
 
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Keep in mind, a lot of fundraisers are actually used for marketing purposes, not necessarily as a primary function to get funding. this is actually quite a common strategy,. ie. do a fundraiser before the film, or during a film, or after a film to raise awareness of it, build momentum etc.. its a type of PR. So before everyone gets too caught up it being charity, well in fact it might not be at all.

Just a thought and perspective I thought I would share.
 
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