Filmmaking / Directing : Looking for investment from the public for your film project on STAGE32 or other by Georgia Hilton

Georgia Hilton

Looking for investment from the public for your film project on STAGE32 or other

I don't want to burst your bubble but asking for investment money for your movie from passive and non-accredited investors and the general public (which this and other websites are considered ) is very dangerous, leave you open to lawsuits and is a violation of SEC regulations which could lead to breaking various laws. The solicitation of funds from either a non-accredited or a passive investors in exchange for a financial interest in your movie project will create federal and state securities compliance issues and will probably impact your ability to later distribute the movie or if your film tanks, you could be liable for some serious lawsuits because you didn't provide proper and legal investment documents. A security, in this case a movie project, “is the presence of an investment in a common venture premised on a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.” If you want to ask for investment for your project from the general public or passive investors you need to work through crowd-sourcing parts (still a long term SEC issue being resolved soon I hope ) or through a formal SEC style set of documents in order to do so legally. A Passive investors is an investor that is NOT actively involved in the management of the undertaking and invest in exchange for an economic interest. If you take money from someone and they are ACTIVELY involved as a hands-on producer in the management of the project they will be considered an Active Investor and its more fair game to take their money. The distinction between active and passive investors is important because it dictates what financing options are available to you. For example, a film producer who raises money from active investors (who act, for example, as executive producers and have approval rights over major decisions or other defined, sufficient forms of participation) is likely able to avoid dealing with federal and state securities law disclosure requirements and investor eligibility limitations. In contrast, equity investment offerings to passive investors either must be registered with the SEC and the appropriate state agency, or the offerings must qualify for an exemption and comply with any applicable state securities requirements. The important Difference and differentiating aspect of Investors and Crowd funding is that Crowd funding deals with passive investment offerings via DONATION-based funding and does not involve the sale of securities to investors, and those who donate do not receive a financial interest in the project. Equity-based crowd funding, on the other hand, involves a potential return on investment and a detailed legal framework intended to protect investors. Filmmakers interested in equity-based crowd- funding need to be familiar with this SEC regulations. You can get away with asking High Net Worth accredited investors because to an appropriate accredited investor in a movie, the investors has to be active in funding movie projects and this cannot be their first endeavor, and therefore proves they understand the risks. If I were you I would stop asking for money from the public until you you can create the proper funding/investment vehicle and associated documentation or simply do private requests with people you know or are connected to and use Crowd sourcing as well. As always my disclaimer: I AM NOT AN ATTORNEY AND YOU NEED TO CONSULT AN ATTORNEY WHO IS FAMILIAR WITH THE SEC AND FILM INVESTMENT BEFORE ATTEMPTING TO SECURE INVESTMENT FOR YOUR PROJECT.

Amanda Toney

Hey Georgia, thanks so much for taking the time to write this out and clarify this for the community! I'm sure many people who are looking for funding will find this very useful!!

Georgia Hilton

your welcome.. I don't want to kill everyone's dreams, but you need to be careful when asking for money.. And frankly, if you do a little homework. Its not that hard to do it correctly... Well, not hard to put the package together... still hard to find the money. ;)

Simon © Simon

I guess one could emulate a crowd source funding site. Maybe a barter type, or write it up as a donation...? However your exec producer 'tag' does come into play on many levels. Where you may have offered exec producer to one of the first in line and at the end you get a "Whale" who states he/she will donate large for exec producer, but IF only heshe is the only exec on the movie. Leaving one with the first promised exec producer spots that may have only garnered hundred and this last in line whale brings thousands.

Nicholas Jordan

Simon © Simon --- what she is speaking of here does not absolve one from what would be better placed as «industry-knowledge»

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