Equity Crowdfunding:
How You Can Invest in Hollywood Without Already Being a Millionaire
Have you ever wanted
to be a part of Hollywood?
Have you ever wished
you could share in the profits of a big movie?
For some reason, it
took a law called the JOBS Act, passed in 2012, to allow ordinary,
non-wealthy people to invest in Hollywood. You can read guidelines on
the topic from the SEC here, if you’re interested in the legalese. [I’m not...]
I find it absurd
that it took until after 2010 for non-wealthy people to be allowed to
invest in this sort of thing! Here’s why:
Mutual funds, in which a bunch of
people buy a bunch of stock in a bunch of different companies, have
been around since—as
it turns out—the 1770s! It took about 200 years for them to
become popular in the United States, but mutual
funds are very popular today. In fact, as of 2013, over $15
trillion were invested in mutual funds in the United States
alone—that’s $15 trillion with a t! I’ve advocated a particular type of mutual fund, called an index fund, before. Check out that link for an explanation of why.
And boring personal financial junk aside, people have
been contributing money to films, products, etc. on Kickstarter since
2009. But on Kickstarter, contributors have no chance to share in the profits—they simply give money
to help fund someone’s good idea.
“Equity
crowdfunding,” as it’s typically called (though some
prefer the term “crowdinvesting” instead), combines these two
ideas. It’s like a mutual fund for small-time venture capitalists!
With equity
crowdfunding, you’re not just giving money to a project—you’re
helping to fund the development of a company! If you don’t know
what a venture
capitalist is, they give entrepreneurs money in exchange for a
percentage of ownership in the company...kind of like the ABC show Shark Tank, but
without all the made-for-TV drama. Well, hopefully
without the drama…
If you’d like to
know more, I’ve included a
link to a guest-authored post by David Willis, the director and
screenwriter of I’ll Be Next Door for Christmas. The team behind this movie has set an ambitious date of having the film completed by November of 2017!
Side note: he’s the writer, director, a producer, and he even writes guest posts for blogs?!?! This is definitely a man who wears many hats! I can’t figure out how to keep more than one on my head...if I can learn how David Willis does it, I’ll start the next fashion trend! What do you think, at least 3 hats at a time?...
Okay, maybe I don’t
have much of a future in writing comedies, so I’ll just stick with
purveying information. Here’s a
link to the official press release, which contains some details
about the project and some information about equity crowdfunding as
well.
I’m afraid grad
students don’t have a lot of money to invest in such ventures.
But if this sounds interesting to you, you can visit their WeFunder page and throw some money into the pot. Who knows,
you may even strike it rich! And even if you don't have the money to invest, you can always keep updated by following them on Twitter and/or Facebook!
If you do choose to
invest in this, be sure you read the terms carefully and know exactly
what you’re getting into. And remember—as with any such
investment, there’s the possibility that the movie won’t make any
money and you won’t see a dime of royalties, so don’t give them
more money than you can afford to lose.
The upside, though, is the potential to earn royalties every year, forever! Not a bad way to spend a hundred bucks that you were just going to blow at a restaurant, anyway...
Addendum 4/15/20:
I was contacted with another opportunity, for a romantic comedy set on Christmas (actually, Christmas parties at the same house over 6 different years).
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