Crowdsource Funding for Feature Films, Kickstarter etc

M

maestro1d

Well-known member
We usually use traditional development models when raising money for our projects, but was wondering about a popular new method some folks are using known as crowdsource funding.

One of the sites that is currently offering this type of service is kickstarter.com, which is not limited to film projects (we have no affiliation to them, btw).

Just wondering if anyone has used their site for raising funds for a feature or other project, as we are considering trying their site in conjunction with our current feature development, along with social networking for buzz etc.

Also, anyone know how to obtain an invite for kickstarter?

Thanks,
 
I have yet to see any actual successes using this model, certainly none that wouldn't have been better off going with a traditional type of fundraising.
 
I have friends who have raised in the vicinity of $5k to $15k. haven't seen any higher than that for an indie film. These are mostly for finishing funds so there is some credibility established already by the fact that its in the can. I'll post two examples of projects that are already over their goal.

Mike Ambs http://www.kickstarter.com/projects/mikea/for-thousands-of-miles
Open Indie http://www.kickstarter.com/projects/arincrumley/openindie-100-pioneering-filmmakers-embrace-moder

The key to successful crowdfunding, is having a "crowd" in the first place.
 
RE: Crowdsource for Feature Fundraising

RE: Crowdsource for Feature Fundraising

Cassius said:
I have yet to see any actual successes using this model, certainly none that wouldn't have been better off going with a traditional type of fundraising.
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OK. Thanks for the reply...
 
RE: Crowdsource for Feature Fundraising

RE: Crowdsource for Feature Fundraising

Zak Forsman said:
I have friends who have raised in the vicinity of $5k to $15k. haven't seen any higher than that for an indie film. These are mostly for finishing funds so there is some credibility established already by the fact that its in the can. I'll post two examples of projects that are already over their goal.

Mike Ambs http://www.kickstarter.com/projects/mikea/for-thousands-of-miles
Open Indie http://www.kickstarter.com/projects/arincrumley/openindie-100-pioneering-filmmakers-embrace-moder

The key to successful crowdfunding, is having a "crowd" in the first place.
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I agree about having the crowd in the first place. As both a director and producer, and before that a concert and live show promoter, I have been steadily growing a fan base for a few years in orlando and across various parts of the country. It may be time for me to give this a try as part of finishing funds for our feature film "The Manslaughter"...

Also, I watched Arin Crumley and Kieran cross the finish line on kickstarter with OpenIndie.com a few weeks back- that's what piqued my interest. Also, I found out about both sites through twitter.

Oh yeah, hey Zak- Speaking of twitter, I think I've been seeing your posts their once and awhile- Didn't you tweet recently about renting a theater venue in LA or something? I think so, if memory serves... Unless there is another fillmaker named Zak Forsman runnin around. :D

Any way- thanks for the input- I think the bottom line here is that a) twitter played a hand in all this cross referencing, b) there is some potential in new paradigms like web 2.0, social networks & crowdsourcing, if handled right.

Perhaps the way to go is... rough cut (or very good trailer/demo) in can... Web site to advertise it, spread the word about site & the project with twitter, facebook, linked-in, sites like DVXUSER, to develop the base and get the buzz going, then crowdsource for completion funds and further buzz, and use the same venues to announce that, and if distribution is a problem, maybe use OpenIndie, and direct to market Indie-DVD platforms like CreateSpace.com (formerly CustomFlix) and Amazon etc.

Of course, it all still comes down to sweat equity from buzz, promo, and of course having a good film that people want to see.

Thanks for all the input... Now if I can just figure what to do with those extra 17 minutes each day... :thumbsup:
 
Zak Forsman said:
I have friends who have raised in the vicinity of $5k to $15k. haven't seen any higher than that for an indie film. These are mostly for finishing funds so there is some credibility established already by the fact that its in the can. I'll post two examples of projects that are already over their goal.

Mike Ambs http://www.kickstarter.com/projects/mikea/for-thousands-of-miles
Open Indie http://www.kickstarter.com/projects/arincrumley/openindie-100-pioneering-filmmakers-embrace-moder

The key to successful crowdfunding, is having a "crowd" in the first place.
Click to expand...

Zak, just curious, does this thing really work? I mean do people really get say a check in their hand...LOL! just curious since you said you have friends who've done it.
 
I had a chance to play around on the site and its pretty cool. The only thing I'm confused about is how is this legal, what happens with all the SEC laws? Oh well, they must have good lawyers because I remember several discussions here on the boards where Barry Green mentioned SEC laws when asking for donations and such. But if there is a loophole somehow that's great, it's a wonderful thing they got going on there.
 
These are not investments or loans. You are not permitted to offer any points or ownership in the movie. These are no strings attached contributions with a tiered "perks" structure giving away anything from DVDs to special thanks credits to live appearances. If the artist had 501c3 status, the donations could be tax exempt.
 
Right, if it's a straight-up donation, you can ask for donations from anyone. The only limit on donations is that a gifter cannot give more than $11,000 to one person in one year, without there being tax consequences (for the giver, not the recipient).

Just don't offer them any ownership in the film or make any "investment" promises, and as long as they give a free gift with no expectation of anything in return, then it's perfectly legal.

It's when you start promising them a return on their money or offering ownership in the project that you have to start abiding by SEC regulations.

If you're a registered non-profit, you can sweeten the deal by telling them that the gifts are tax-deductible, which means that the $1000 the person gives you might actually reduce their net wealth by only maybe $550. That can be appealing and help sell the idea; if someone was willing to give you $100, when it's tax-deductible they might go $200 just because that other $100 is either going to the IRS or to you, so why not you?

If you're not a tax-exempt nonprofit, you can still make it happen by pairing up with a nonprofit organization that offers Fiscal Sponsorship. Fractured Atlas is one such organization; people can donate to your project through Fractured Atlas and they will receive tax-deductibility on their donations. Fractured Atlas then takes 6% as their fee, and passes the rest on to you in the form of a grant.
 
Barry_Green said:
Right, if it's a straight-up donation, you can ask for donations from anyone. The only limit on donations is that a gifter cannot give more than $11,000 to one person in one year, without there being tax consequences (for the giver, not the recipient).

Just don't offer them any ownership in the film or make any "investment" promises, and as long as they give a free gift with no expectation of anything in return, then it's perfectly legal.

It's when you start promising them a return on their money or offering ownership in the project that you have to start abiding by SEC regulations.

If you're a registered non-profit, you can sweeten the deal by telling them that the gifts are tax-deductible, which means that the $1000 the person gives you might actually reduce their net wealth by only maybe $550. That can be appealing and help sell the idea; if someone was willing to give you $100, when it's tax-deductible they might go $200 just because that other $100 is either going to the IRS or to you, so why not you?

If you're not a tax-exempt nonprofit, you can still make it happen by pairing up with a nonprofit organization that offers Fiscal Sponsorship. Fractured Atlas is one such organization; people can donate to your project through Fractured Atlas and they will receive tax-deductibility on their donations. Fractured Atlas then takes 6% as their fee, and passes the rest on to you in the form of a grant.
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Okay I got you. I was reading some of the success stories on there and someone actually promised Executive Producer credit on a film, so I guess that's okay as long as the person doesn't say you get money from the film. But I would assume having an Executive Credit means if the movie sees money then the Executive Producer sees money?

I was reading the whole thing on how the set up is, it's pretty cool, all the transaction is done through Amazon.com and amazon gets a cut so does the website. But if they are dealing with Amazon I assume their legit enough not to worry about the SEC because amazon is a big dog and I'm sure they wouldn't make deals if they were any red flags.
 
Payment is due someone based on a contractual relationship between the parties, not on whether someone has a particular credit in the film.
 
SEC regs and filmmaking

SEC regs and filmmaking

capitalP said:
I had a chance to play around on the site and its pretty cool. The only thing I'm confused about is how is this legal, what happens with all the SEC laws? Oh well, they must have good lawyers because I remember several discussions here on the boards where Barry Green mentioned SEC laws when asking for donations and such. But if there is a loophole somehow that's great, it's a wonderful thing they got going on there.
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Your concern about the SEC is valid- Back in the 70's, congress passed legislation known as "blue sky laws." These were laws designed to protect little old ladies and others who were getting bilked by filmmakers promising them, in effect, the sky (ala "The Producers") and then never proceeding with the film, or at least failing to make a profit.

Yes, when you solicit, you are limited to how many individuals (or entitities) you may solicit for funds, before SEC regs kick in- I believe it's twenty pitches for money. TIP: this doesn't mean PEOPLE. You could have a group or company that you pitch, and that counts as one pitch out of twenty. But I believe you need to know ALL the people you are asking for funds personally first- it can't be like cold calling or newspaper ad kinda thing.

Now the other folks on here are right- crowdsourcing is okay, because you are NOT offering a piece of the film, merely swag and tickets and t-shirts and screen credits and what not.

I double checked this very subject about a month ago with an entertainment attorney I met through Twitter. His name is Roger Goff, and he lives in LA. Look him up on twitter or google him- he is very friendly and knowledgeable and I'm sure can answer these questions for you.

Hope that helps! :Drogar-BigGrin(DBG)
 
Barry_Green said:
If you're not a tax-exempt nonprofit, you can still make it happen by pairing up with a nonprofit organization that offers Fiscal Sponsorship. Fractured Atlas is one such organization; people can donate to your project through Fractured Atlas and they will receive tax-deductibility on their donations. Fractured Atlas then takes 6% as their fee, and passes the rest on to you in the form of a grant.
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Yeah, we're using fractured atlas. Funny though, we just received a sizable cash donation and the person did not want to go through FA, because they preferred us to have all of the money.

We had considered filing for our own non-profit status as it seemed an ideal fit for what we wanted to accomplish, and my partner has been in theater for 25 years, so knows the ins and outs of applying. But we settled on FA for our first feature to kind of see how it all worked out before making the full jump with our own company.

But when Kickstarter first started, I brought up fiscal sponsorships as an alternative with the added benefit of using their 501c3 status to sweeten the deal.

There are other benefits to belonging to a group like fractured atlas as well. For instance, we get access to Materials for the Arts here in NYC, which is a city-sponsored program where big companies donate stuff they no longer need and "artists" can come get that stuff for their offices, productions, etc. It ranges from office furniture to entire bolts of fabric to whatever. Theaters all over the city use it all the time, and I think it's also a perfect fit for small indie films for set-dressing, and such.

We are going to start a kickstarter campaign as well. I've seen it succeed a bunch of times on very limited amounts for very focused ends. So I think we will start one to say: Fund our rehearsal process and ask for the $3K or whatever we estimate that will cost. I think at least two of our actors have enough of a following that we can meet a goal like that.

I've also recently been talking to an author who liked my work and wants to see about making a short out of something. I suggested that, since this author is published and has a strong following, they should consider a kick-starter to raise, say $5K to do a nice short, get the word out to all of their fans.... I think that might work too.
 
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One more thing people might not be aware of, is FA, and probably many other fiscal sponsorships, have WAY cheaper production insurance than the quotes I got out in the market. Big benefit. And we're getting an annual policy out of it, so reshoots, etc are no prob.
 
Fractured Atlas enters the discussion...

Fractured Atlas enters the discussion...

Mark Harris said:
Yeah, we're using fractured atlas. Funny though, we just received a sizable cash donation and the person did not want to go through FA, because they preferred us to have all of the money.
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Yes, I had heard about Fractured Atlas as well- We were considering going that route for a TV show I directed and co-produced (as opposed to my film project).

For the TV show, the pilot is currently running "locally" on PBS regionals in Daytona and Miami, and there have been several in person meetings between the writer, myself and the execs at the presenting station in Daytona Beach.

The good news: we have been asked for 26 or more additional episodes. Station will provide all the gear, crew, facility, etc on a deferred basis based on a possible future pickup by a large PBS national affiliate, there's just no pre-production or post/animation & salary money available for myself as director, nor for the DP and the show creator/lead actress. This is where I was going to pick up the loose ends with either kickstarter and/or FA.

We are going back next week to discuss firm shooting dates in spring, and to go to a "Plan B" line item on the budget. I figure if I can get us this close to the finish line, crowdsourcing might be the way to go. Unless of course there are any millionaire angel investors out there that want to support a TV show for kids with an arts/crafts recycling theme... if so, please PM me of course... :Drogar-BigGrin(DBG)
 
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