Equity crowdfunding for film can be very compelling to potential investors, given that the ultimate value can be sky-high if they are correct about your project. Equity crowdfunding for your indie film can also be a great choice because, in the beginning, there is nothing to repay at a time when you need capital the most. Here is an excellent article about your choices for equity crowdfunding for TV or film.
In this post, we go over the basics of equity crowdfunding for your film project, and we are also happy to talk things through at no cost – our goal is to help as many indie films get made through crowdfunding.
Risks of Equity Crowdfunding for Film
Despite the positives, equity-based crowdfunding for film is one of the riskier ways to take in money. Unlike other forms of peer-to-peer lending, the investor takes the risk of coming away with nothing for their initial investment. If the film does not profit, the equity is not worth anything. And you take the chance that the initial investment made by the crowd will have to be paid off at a massive multiple if your project makes it big. In some cases, the perfect balance is struck, and everyone comes away happy, most commonly when the movie does well, and the investor does a bit better than expected. However, the filmmaker is still quite pleased with the financial outcome.
Equity Crowdfunding for Film Negotiations
For the above reasons, equity crowdfunding for film leads to an initial push-pull between the investor and the company to find the percentage that will be given up and the amount that needs to be invested. Invariably, at least initially, the investor will want a very high rate. At the same time, the company will believe so strongly in the potential of the movie or TV show that they will want to keep that percentage perhaps too low. Sometimes, the pair can work out some safeguards in both directions, capping how much the equity can be worth but also putting a floor on the value. Crowdfunding platforms can often give some guidance and advice about terms.
Advantages of Equity Crowdfunding for Film
Equity crowdfunding has advantages for independent movies on both sides of the equation. For an investor, equity-based crowdfunding offers a variable payoff that can be quite high if the investor has chosen the right project. Instead of there being a certain amount that the investor can expect back when debt funding is provided, they could get a lot more than expected if the project does exceptionally well. The payoff can last a long time – instead of a fixed period after which the investment and the relationship end, equity crowdfunding leads to a lasting relationship as the film gets views over time.
Advantages for the Producer
For the person or company receiving equity crowdfunding, the advantages include not having to pay back any capital when cash is needed for the production and distribution and often having a motivated business partner who is in it for the long haul. Equity crowdfunding leads to a built-in and long-term group of cheerleaders for your project who will help spread the word when the movie or show is released. They all have their own social media connections and friends and family!
In a separate post, we cover the pluses and minuses of equity crowdfunding for film.
Applying for Equity-Based Crowdfunding
Applying for equity crowdfunding for your film project revolves around its potential. You need to first capture the attention of potential investors with a great idea and plan and convince them that your experience and drive will make it a success. If you fail to capture their attention with a compelling idea, they’ll never check out your value proposition. On the other hand, if you do capture their attention with a great idea but cannot link it to a great plan and a high chance for execution of that plan, you are not likely to get an offer.
The Equity Crowdfunding Pitch
The first step in applying for equity-based crowdfunding for film is fully developing your product or service idea. Ensure that your presentation is detailed enough to seem realistic, actionable, and promising and that you have done your homework about similar successful projects.
Always remember that the crowd is assessing you on two levels: First, they are reading the pitch for your movie or show for its content, but then they are also evaluating you – how much time and effort you are putting in and the quality of the result. So, your initial product description has to be clear, well-thought-out, and compelling. Potential investors, especially in movies and TV, will like multimedia to truly understand what you want them to invest in and the quality you are capable of.
How to Make Your Equity Crowdfunding Stand Out
Here is the most challenging part about applying for equity-based crowdfunding: There are a ton of independent film and TV pitches out there, and they are easily accessible for any potential investor. Most of the pitches are quite compelling and interesting so that indie film investors can make many choices. You need to ensure you’ve wrapped your idea into a quick and compelling pitch that grabs their attention and keeps it so that they read the details and see what more there is to the idea. Do not skimp on that first-look pitch to investors and think of ways to use everything from multimedia to attention-grabbing statistics.
Equity Crowdfunding for Film Follow-up
Now that your hook is out there and you are hoping that a potential investor will bite, whether through an independent pitch or a platform, you should be ready to respond quickly if you get any inquiries. The key word there is “quickly.”
Some investors may reach out to several projects and ask a few questions that will help them decide whether this is the right one for them, and just like we mentioned above, there are two reasons why you need to be responsive. First, they genuinely want the information to decide whether to invest in your equity crowdfunding film or TV project and second, they want to know a little about you and whether you will be responsive to them if they do invest.
Make sure you are entirely upfront when you do answer their request for information – exaggeration or leaving information out will only serve to come back around. Give a fully open and honest view of whatever they ask, and do not be afraid to say you need time to get the answer they need.
Equity Crowdfunding for Film: Our Services
We wish you luck as you seek your funding and would be happy to discuss your choices, including equity crowdfunding for film, if it would be helpful. We do not charge for that consultation; many other services are free. We also have connections at many equity crowdfunding platforms, and we can put you in touch, even if you want to just explore and compare.
Of course, we can also be helpful, fully guaranteed, in helping you choose the perfect platform, connect with that platform, and get accepted. Contact us if you have any questions about our equity crowdfunding for film – we always provide initial guidance for free!
