Crowdfunding

One of the blog readers, Linh Mai, sent me an email that he's started a crowdfunding project. What's crowdfunding, some of you may ask? 

Basically, it's a way to raise money. Legally. Sort of.

How much money? A band from England raised $90,000 to cover costs of a US tour. I've seen some crowdfunding requests for $1200. Linh is looking for $25,000 for his project.

What kind of project? Almost anything. Movies, music, charities, surgeries, theater, you name it, anything that needs money to happen. I have thought of doing one as well for Casualties of Love, for maybe $50,000.

Okay so what is crowdfunding? Wikipedia describes it as this: "The collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the Internet, to support efforts initiated by other people or organizations. " 

Easier description: You ask the public for enough money to do something. It doesn't have to be a movie, it can be $10,000 to write a screenplay; or $10,000 to make a movie. Or, as Linh is doing, $25,000 so that he can do a demo reel of a movie project called The Last Cause that would then help to raise money for the real thing.

The idea is that anyone who comes across your website decides to put in money into the project because they have faith in it's potential. You can put in $1, or $100, or any amount as the project people are asking for. And in return you might not get anything. But losing $1 isn't that big of a deal anyways.

Think of it as being a "patron of the arts", like those rich Europeans who paid Van Gogh to paint them and at the same time, gave him money to eat and get paints.

But is this legal? What about the Securities Commissions, they have strict rules about investing in something.

The answer is simple; it is totally illegal.

It violates the Security Act of 1933, which was passed after the stockmarket crash of 1929. For the most part, at least so far, it's overlooked. And mostly because the majority of the projects seeking Crowdfunding are individuals doing simple, basic projects that are spelled out in a minimum of words. In other words, you're dealing with a guy or girl who needs some start-up money for a project. Or maybe the project itself. We're not talking millions of dollars.

Well, with the exception of President Obama, whose helpers did this during the election and look how much they got.

My first encounter with a version of Crowdfunding was way back in the 60's, when, as a kid, I watched Soupy Sales on Channell 7 in Detroit. Soupy was a kid's best friend, and once he asked his kid audience to go to their parent's wallets and mail all the pictures of presidents to him.

It was a joke. But it turned out to be no joke when kids did send him money and the FCC was not pleased.

How do you do it? Right now there are a few websites like kickstarter.com devoted to film, music and other arts and they will, for a percentage, give you a web page of your own where you can post information, photos, video and music clips, or anything that you think would persuade those people who view your website to toss a few bucks in.

The website holds the money until the amount needed is raised. If it isn't raised, some let you use what you have or cancel everything and the money is returned. Linh's is on Kickstarter and there's also indiegogo.com and you can look at his and the other people, all of whom are hoping to raise money.

It's something that doesn't really cost the artist anything, and if the project is good, word-of-mouth will spread and pretty soon, the artist has the money they need. There's no real idea of how many actually get what they're asking for, but the odds are far better than trying to get it out of Hollywood.

And finally, David Lynch himself is using Crowdfunding to help fund a documentary he wants to make. In return for a $50 investment, Lynch sends each and every Crowdfunder a self-portrait he drew.

Maybe I should consider this... hmmnn...