So just curious on this one. If an Equity Funding campaign is succesful and the film is being shopped around to distibuters, how do the profits get shared around. It's well known that distibuters falsify their profits. How can this be transparent for all investors involed?
Do you distibute yourself?
If sales and distibution are interested would the investor 'problem' be a problem?
Solicitors would come in at the start for the investors and the paltform but just how will it work once the film is ready for distibtion?
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Rob Kelly Hi Rob, I don't understand the question. If an equity campaign is successful, then the question of how profits are divided is already decided - because that's part of the campaign. You have no real control over whether a distributor pays you honestly or not; but there should be a contractual right to examine their records. Finally, no distributor cares about your investors, if they are equity investors (assuming a corporation) because they have no say in contracts with them.
Exactly. So how does Equity investing work for the investor? If I invest 100 in a equity crowdfunding campaign, I recieve whatever percent of percieved profits. Great. themn I hear that the studio has ade a collosal amount more in distibution, whats the course of action?
As an investor... you probably have no recourse at all. Assuming a corporation or limited partnership or similar, you have equity (ie. shares) but as an owner you trade away your ability to affect management and deal with company contracts in return for shielding you from legal liability for company debt and wrongdoing. A shareholder has no standing to complain about a contract the company enters into, and no legal relationship with anyone the company contracts with. Your recourse would be to seek the matter to be addressed by the directors of the company, at the annual general meeting, assuming you have voting shares. There are other permutations, but they all kind of boil down to "no practical recourse."