Tuesday, December 30, 2008

Film Investment Raising Web Sites

I had a comment on my last blog entry about Film Investors stating that Web sites like IndieGoGo are helping filmmakers to take the reins of building the financing for their films in small chunks from large groups of people. I am aware of this concept and have seriously considered it for my own projects but have never attempted it -- it always seemed like it would be difficult to raise a substantial amount of financing this way. 

I haven't personally encountered a filmmaker who has successfully raised enough funding this way to make their film. I would love to hear from any filmmakers who have been successful doing this. 

I know other sites exist as well and I found an April 25, 2008 blog entry from Scott Kirsner's Cinematech blog describing a couple:

1. IndieGoGo

In its first few months of operation, IndieGoGo has helped two films raise $10,000 each; in neither case was the $10,000 the film’s complete budget, but rather a “first round” of funding. Financial contributors may be rewarded with invites to wrap parties, DVD copies of the film, film credits, or signed memorabilia. Creating a project profile for a film is free, but once the financial goal is reached, IndieGoGo takes a nine percent cut. Filmmakers can post any material they like – some, like a budget or script, may be password-protected in a private area for certain potential contributors. Non-profit enterprises can use IndieGoGo to solicit tax-deductible donations, too.

2. ArtistShare

Used so far mostly by musicians, ArtistShare is allowing at least one filmmaker, Paul Devlin, to raise money on the site for his “science-adventure” doc ‘Blast.’ Donors can pre-purchase the DVD ($49.99) or, for $150,000 go out to dinner with the filmmaker and star of the movie, get a personal lecture from the star, and be listed as an Executive Producer. ArtistShare charges a set-up fee for all accounts, plus a monthly fee, in order to be able to raise funds through the site. Unclear how open they are to helping other film/video projects raise money. Rick Moranis has used ArtistShare, as have jazz guitarist Jim Hall, Phish co-founder Trey Anastasio, and Maria Schneider, who won a Grammy this year for “Best Instrumental Composition.”

Scott also mentioned Indieshares. This site looks interesting as well. Screenwriters upload their scripts, which then go through a "proprietary" review process. Three screenplays are chosen from this pool to be optioned. At this point, information on each, including synopses, pages from the scripts and bios of the filmmakers, are made available to the masses, who then vote on the story they like best. A company is then created for the production of the screenplay with the most votes. Shares are then offered through a registered public offering at a minimum price of $10 and a maximum of $2500 each. For more on their system, check out their FAQ page. It seems like an overly complicated screenwriting contest but if it gets a quality film made then great!

Another site that I have considered using is Fundable. This Web site provides the means to build a sum of money for a specific cause, and, yes, the cause can be a film. All you have to do is list the amount of money you are seeking and if enough people contribute in order to meet your goal then you will be cut a check or sent money via PayPal for that amount of money (minus a 10% fee). If, however, you can't get enough funds raised to meet your goal then you either have to lower the amount you are seeking or none of the money will be collected from those who pledged funds. 

And, last but not least, some filmmakers start their own Web sites in order to raise financing for specific projects. Perhaps they offer swag in exchange for a certain amount that allows them to build a budget. A $10 T-shirt can be sold for $50 and now you have $40 for your film. There are endless ideas for building financing for films. Web sites can be a useful tool in your financing strategy.


gogodanae said...

Hi there, I'm with IndieGoGo and just stumbled upon your entry. You are correct; we have had many filmmakers raise various sums of money and various percentages of their budget. Some filmmakers whose budgets are quite large and fully funded are still carving out a percentage of their budget to raise via fans on IndieGoGo purely as an audience-building and marketing strategy. They understand the value of 1000 people contributing $10 for a credit in the film is much greater than 1 person contributing $10,000. In the former case, you now have 1000 people talking and buzzing about your film with all their friends and possibly even bragging about how they got to be a film patron with only $10. It's great viral/grass-roots/organic marketing. So what's happening is that Fundraising is becoming the new Marketing. Plus, by building a fanbase before and during the production, you're making your project more attractive to other more traditional types of financiers and distributors. The risk profile of investing in a project with a fanbase is much more attractive than a project with no embedded audience. At IndieGoGo we believe the future of film finance rests in a hybrid approach - pulling together all types of funds, and using each type to spur others. Also, on IndieGoGo all contributed funds go directly to the filmmaker, whether or not the project reaches its goal. if it does reach a goal, the filmmaker can always open another goal to fund the next phase of the project. The number of funding goals is limitless too. I hope that helps and clears things up a bit. Good luck with your project! Cheers and Happy New Year! GoGoDanae

Jane Kelly Kosek said...

Hi GoGoDanae,

You are so right about needing to build an audience and I hadn't really thought of using IndieGoGo as a means to build one. You learn something new every day! I do have a new project that would benefit greatly from this service so I may just do it! Thanks for the comment and Happy New Year!


MrIrish said...

Just catching up on your posts. It's a great idea! Def something to think about doing.

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