By Mark Hiraide, who is a partner at Mitchell Silberberg & Knupp LLP. He defends directors and officers in securities litigation and counsels companies in corporate financing transactions.
The final tremor of a monumental shift in federal securities laws took place in May 2016, and when the shaking stopped, entrepreneurs had gained unprecedented access to capital. For the first time in the history of federal securities regulation in the United States, emerging businesses may raise capital from the general public without registering a securities offering with the Securities and Exchange Commission. This expansion of the funding universe is the heart and soul of the Jumpstart Our Business Startups (JOBS) Act of 2012. The JOBS Act removed restrictions making it easier for entrepreneurial clients to fund their ventures using OPM (other people’s money).
The JOBS Act legalized equity crowdfunding, fostered private peer-to-peer lending, created a new regime for regulating “mini-IPOs,” and paved the way for the SEC to create new sources of liquidity for early-stage investors through secondary “venture markets.” The law already has spawned new and innovative financial intermediaries dispensing capital to startup and growing businesses. It has been heralded as “democratizing” access to capital by “disintermediating” Wall Street from the process of selling securities. Many hail the JOBS Act, in particular its provisions for equity crowdfunding, as allowing everyday people to invest in an asset class previously reserved for venture capitalists—crowds of small investors now may directly fund startup businesses that pique their interest. Yet others are skeptical. There is concern that the new regime for raising capital from unsophisticated investors lacks sufficient investor protections.
Prior to the JOBS Act, companies could not publicly solicit any investor unless they registered and subjected the offering to scrutiny by the SEC and/or state securities regulators. The JOBS Act’s elimination of the regulatory burdens on private offerings, and the associated reduction in cost, will make public capital markets attractive to many. No longer will early-stage financing be reserved for those few with the resources to attract and engage Wall Street investment bankers and lawyers. This “uberization” of capital markets will make capital more readily accessible to every budding entrepreneur.
The strict federal securities laws that regulate raising investment capital—well-intentioned in the aftermath of The Stock Market Crash of 1929 and the Great Depression—made the ambition of successfully raising capital for startups unattainable for most people. It relegated entrepreneurs to raising seed capital from friends and family and others with whom the entrepreneur had the requisite relationship.
Title III of the JOBS Act: Regulation CF – Equity Crowdfunding
The term “crowdfunding” generally describes campaigns that accept relatively small amounts of money from large numbers of people. Modern crowdfunding started with campaigns soliciting donations for social causes or new business ventures; in exchange for a donation, individuals typically received a token of appreciation for their donation, a t-shirt, a first opportunity to purchase a product, or a movie-production credit. A stark example of the difference between non-equity and equity crowdfunding is illustrated by the crowdfunding campaign of virtual-reality pioneer Oculus VR. Many of the 9,522 people who contributed to Oculus’s non-equity crowdfunding campaign on Kickstarter may have been surprised to learn that they would not share in Oculus’ gains two years later when Facebook announced in March 2014 that it was acquiring Oculus for $2 billion.
Promulgated under Title III of the JOBS Act is the new Regulation CF, commonly known as the “equity crowdfunding” exemption. Effective last May 26, this regulation enables entrepreneurs to raise up to $1 million during any 12-month period from anyone who wants to invest, subject to certain dollar limits on the amount of the individual investment. There is no requirement that the investor be accredited or sophisticated. If the investor’s net worth or income is below $100,000, he or she is subject to an investment cap of the greater of $2,000 or 5 percent of the lesser of the investor’s annual income or net worth. If both net worth and annual income are at least $100,000, the investment cap is 10 percent of the lesser of the investor’s annual income or net worth, not to exceed an amount sold of $100,000. These caps reflect the aggregate amount an investor may invest in all offerings under Regulation CF in a 12-month period across all issuers.
An offering statement is required, which must include general information about the issuer, officers and directors and significant shareholders, the intended use of proceeds, the company’s ownership and capital structure and financial statements for the two most recently completed fiscal years. If the offering amount is greater than $100,000 but less than $500,000, the financial statements must be reviewed by an independent accountant. If the offering amount is greater than $500,000, the financial statements must be audited, unless the company is conducting its first Regulation CF offering, in which case the financial statements need only be reviewed. For offerings less than $100,000, the financial statements need only be certified by the issuer’s principal officer. The offering statement must be filed with the SEC, but it is not reviewed by the agency. Once the offering statement is filed with the SEC, the offering may immediately commence and the company may accept investor subscriptions. The issuer is required to set forth a minimum or target offering amount, and proceeds must be deposited in a third-party escrow account until the minimum is reached.
A significant limitation under Regulation CF is that all offerings must be conducted through a single Internet portal, which must either be registered with the SEC as a broker-dealer or as a new form of regulated entity, a “financing portal.” There are limits to advertising an offering and, given the potential liabilities, consultation with good legal counsel is a must.
In theory, Regulation CF enables anyone to reach out to capital sources and raise seed levels of money. No doubt, without the benefit of professional financial intermediaries, such as investment bankers, entrepreneurs on their own will face challenges raising capital. What the JOBS Act offers, however, is a pathway for companies to access capital previously available only to the most privileged few. Fasten your seatbelts, it’s going to be a bumpy night.
Orly Ravid February 2nd, 2017
I was speaking with a producer friend of mine this week, and she told me a disturbing (if familiar) story, with a surprisingly inspiring conclusion.
She recently exec produced one of 2014’s “bigger” independent films…which is set for theatrical release soon. They did just about everything right. The film is written and directed by a well known, highly respected auteur on the indie scene, with a long career. It stars two very well-known character actors, who are just about household names if not quite “movie stars.” The budget was modest. It premiered at one of the pinnacle A-level film festivals. There it was bought by one of the biggest mini-majors in the business, and has since sold 18 territories worldwide. Even before theatrical release, the investors have all made a significant percentage of their money back…albeit not all of it (and certainly no profit).
She was lunching with one of the films other producers recently and she asked him… “If the film grosses 1 million dollars theatrically, do you think we’ll see any more money?” He said, “probably not.” So she said, “Ok what if it grosses 3 million?” And he said “probably not.” “10 million?” “Probably not.”
She said that’s when it dawned on her…. producing and selling an independent film the traditional way (i.e. selling all rights out of a festival premiere) is simply not a business. (BOOM…head exploding). In any other business, making back a percentage of your investment is not a success story. In indie film, we shrug our shoulders and say, “Well, that’s the way it goes” and move on to the next one.
The lack of a sound business model in independent film is what we at TFC have been trying to address all along. The “old way” of producing and selling indie films is actually a shell game at best, a way of moving money from one spot to the next that is equal part a gambling game and equal part a con-job. Sure, there are a few unmitigated success stories every year…just enough to create a delusional atmosphere that casts a spell over thousands of filmmakers who think they can just make their movie and walk away as it magically finds its way into the world and fills their pockets with cash.
Anyway, it just so happens that my producer friend is currently working on a new film, and with the production schedule being the way it is, she knows for sure it won’t be done for at least another year. And after that, of course the inevitable wait for the right Festival premiere, which can take several additional months. As such, she figures that this time she has plenty of time to re-imagine the traditional model, and approach the film as an actual business. My producer friend comes from an entrepreneurial background, where she created and sold tech companies.
This time, this film, she vows, she is going to approach the distribution and marketing of the film the way she did with her tech companies in the past, and build it like an actual business. Not wait around for some other company to come in later and supposedly do it for her.
My producer friend and I plan to sit down in the next few months and have detailed conversations about what that actually looks like, but for now, I am going to use this post to outline some of the basics….and (hopefully) create the beginnings of a road map that others can follow.
NOTE: I am aware that I have been vague with the particulars of the first film mentioned in this post…which may annoy some readers. This was intentional of course, A) I don’t have permission to reveal the details, and B) the basic principals and outcomes are transferable to most every film that has received distribution offers out of a major festival in recent years.
In any case, here we go…some of my basic guidelines to approaching an independent film like the building of any other business.
1) Break down and list every source of potential revenue for the film – and plan how to capitalize on them all. This may seem self-evident, but I’ll wager this is the most overlooked of all independent distribution strategies. That’s because most filmmakers want to sell their film outright, and count on the distribution company to do all the right things. But most distribution companies only do a few things well (if any), and they will inevitably leave numerous stones unturned.
Start with a comprehensive list of every way you can see your film making money, i.e festival screening fees, domestic sales, international sales, theatrical-on-demand (i.e. GATHr or TUGG), community screenings, traditional theatrical, DVD sales at live events, other merchandising, digital downloads etc. Then figure out how many of these you can do yourself, and where you’ll need help from others.
2) Know from the beginning who your audience is – and have a strategy for how to reach them. I know, I know, this is dismaying to most filmmakers. Most filmmakers see themselves as artists first, motivated by self-expression, and actually hope that their film is for everyone, not just a select target group. But remember, just by making an independent film, you are de facto not making a film for everyone (unless you have movie stars)…since the vast majority of the global population doesn’t consume independent film on any kind of regular basis.
In independent film, niche is king AND queen, and you need to think of your target audience as your core customer base. Approach them like any business would…who am I selling to and how do I reach them? And if your core customers love your product, then they’ll tell others about it too. Think long and hard and soul search on this question…if you don’t know who your film is for, you run the risk that it will be for no-one at all.
3) Smart marketing is everything. Hollywood studios find their audiences by essentially buying them, spending vulgar multi-millions on TV ads, billboards, publicity firms to access late night TV talk shows etc….basically putting their product in front of everyone who doesn’t live in a cave. But chances are you can’t do that.
Smart marketing actually stems from question 2…who is your core audience and how do you reach them? And here’s where the important question comes…where do those people congregate such that you can actually speak to them? If you determine that your audience is “women between the age of 30 and 40,” that isn’t particularly useful because that’s too disparate to reach. Not ALL of them congregate in the same place. But if you determine there is a certain set of bloggers and websites that your audience reads and by obtaining coverage or placing ads, you can reach them there, well that’s something you can wrap your head around.
I usually advise that filmmakers start well in advance and build a big excel grid of every organization, every website, every blogger, every tastemaker, every everything they can think of and methodically reach out to them with news about their film. You usually can’t do this until you’ve actually starting shooting..so you can at least share images and teasers etc…but please don’t wait until you are finished with the film. This process takes too long… often by then it is too late.
I shouldn’t have to mention that this is of course where social media comes in as well. You want your social media strategy to start on Day One of shooting if possible. And, as always, you’ll want your social media strategy to be as interactive and engaging as possible…not just a platform for naked self-promotion.
4) Have a rigorous and vigorous approach to crowdfunding. Independent filmmaking can seem downright depressing at times…but it’s times like this we should thank our lucky stars for the relatively recent phenomenon of crowdfunding. What a miracle it is….and the best part of all….you don’t have to give the money back. Plus you are building up an audience that is motivated to see your film succeed.
These days it seems reasonable…for the right project…to launch crowdfunding campaigns in pre-production, for finishing funds, and to jumpstart your distribution, as long as you have a compelling message to impart to the world. And a great video of course… it all comes down to the video (and to a lesser extent the perks). Remember, however, that a crowdfunding campaign is hard work…its like a whole other job, which can certainly seem daunting during production. But if you don’t work hard at it…it won’t work. The good news is, if you DO work hard at it, the success rate is amazing!
5) Explore the granting world. Like crowfunding money, grant money is money you won’t have to pay back (meaning the best kind). Grant money is usually a better fit for documentaries of course, but we’ve also worked on plenty of narrative features with a theme or message that attracted grantees. Also, don’t forget that there are also (some) grants for outreach/distribution, for films with an important social message. To pursue grants, you’ll probably also need a fiscal sponsoring organization to back you, which can be The Film Collaborative or a number of other independent film non-profits. To read more about TFC’s fiscal sponsorship progam, go HERE.
6) Pre-sell as little as possible. This is a quandary for many filmmakers. You need the money to finish the film, but then when it’s finished, those rights are tied up and you can’t exploit them in a way that you’d like to. And, again, unless you have bona fide movie stars, your film will be infinitely less valuable before you finish it than when it is premiering at a major festival like Sundance etc. Time and time again I hear filmmakers say, “I pre-sold my film to x territory (usually broadcast) because I needed the money, now I wish I could just give them the money back.”
7) Parcel off your rights in as many pieces as possible. This is something that TFC’s founder Orly Ravid has specialized in….i.e. engaging as many different companies as possible to handle as many different rights categories as possible. This goes back to what I said earlier, different companies are better at different things. This “parceling” is particularly important because many all-rights holders are using many middle-men companies to get to various platforms etc. You want to be as DIRECT AS POSSIBLE with your various points of sale, cutting out as many middle-men as possible.
8) Explore Transmedia. This is admittedly difficult for the vast majority of independent, character-driven narrative features…although there are some notable exceptions. But for genre/sci-fi features this is an area rich with possibility, through games, contests, spin-off stories etc. And most often overlooked is the potential for documentaries to explore transmedia, especially since most documentaries have countless hours of footage they aren’t using in the finished film itself. And for issue-oriented docs, there is usually a wealth of other sources, both scholarly and journalistic, that can be folded into your website. For documentaries, your website should be an equal “entry-point” into the issues raised by the documentary, and should ultimately lead to more viewers/consumers of the film. That is the very essence of transmedia…multiple entry points into the larger experience.
9) Have a well-thought out strategy for digital distribution. My aforementioned producer friend was in the tech business, so her focus is on possibly creating her own portal where her target audience can download the film directly, thereby cutting out all middle-men entirely.
Nonetheless, in today’s world you have to expect (hope) that the most viewers for your film will be paying customers in the digital realm. And thankfully, just getting your film onto a few big digital platforms these days isn’t particularly difficult (to read more about the digital distribution offered by The Film Collaborative, go HERE. But here is where #2 (target audience) and #3 (smart marketing) come in most importantly….if you just throw your film onto iTunes, how is anyone going to know it’s there?
Unfortunately, there aren’t a lot of great companies you can hire that work for very little money to assist you with the marketing part. So this may be yet another job you and your team might have to do for yourselves.
10) Keep the budget as low as possible. This may seem like the most obvious point of all, and yet it is incredibly subjective. I can’t tell you how many times I cringe when hear filmmakers say “we kept our costs down…it only cost 1 million dollars!” Well, a million dollars isn’t what it used to be….and I mean that in the reverse way it is traditionally meant. With the plethora of cheap digital cameras and desktop editing leading to an explosion in independent film, supply WAY outstrips demand… and a million dollars is quite an expensive indie movie these days. Most importantly, at a million dollars chances are there is probably no amount of DIY distribution techniques that will recoup your investment, and you’ll be back in the initial quandary, meaning you will NEED a significant traditional sale from a distributor to have any chance of making most of your money back.
So, when I say keep your budget low…to be honest I am talking more like $100,000. And I know that’s not always possible. So if you can’t do it for something in the low six-figures, you’re back to that place where you need to start thinking about movie stars.
11) Put a minimum of 10 – 15% of your budget aside for marketing and distribution costs. This is a VERY small percentage of your budget that really will only enable you to start building a core audience, but a core audience can grow wider if word of mouth is active.
Again, I know this is easier said than done. Even if you line-item that with the best intentions, many filmmakers will pilfer along the way for a few extra days of shooting, etc. But chances are you’ll find yourself with a finished film with no more money to get it out into the world….no money for festival trips, no money for smart marketing, no money to hire a publicist, etc. Recognizing that even the initial stages of marketing and distribution require capital, we at TFC implore you not to fall into the trap of being cash-strapped right at the time you need it most.
Most of all of what I have outlined above fall under the producer’s responsibilities, and are sometimes referred to the work of what might be called the PMD or “Producer of Marketing and Distribution.,” and are crucial to development of a producer business model for indie film.
Interestingly, sometimes I think there is a clearer business model for directors of independent film. Directors have a clearer path to a business model that makes sense…direct an indie gem, premiere it at Sundance to great acclaim, and then get hired by Hollywood to direct commercial TV and film (think Christopher Nolan, who seemingly went directly from Memento to Batman). But producers seem to start at step 1 with every script.
It is my hope that by following the guidelines listed in this post, at least some of the groundwork to planning a profitable business model for an independent film can be laid out in advance.
Jeffrey Winter August 19th, 2014
New services and new thinking finally are starting to take hold at major festivals and in the independent film world in general. Productions that can bring donation money, matching funds and/or strong promotional partners to the negotiating table have an advantage when it comes to landing significant distribution.
-At Sundance, the BFI offered up to $51k in matching funds to help market the US distribution of their 3 funded films in the festival.
-At Toronto (TIFF), Vimeo offered a $10k advance for world premiere films that gave them a 30 day exclusive streaming VOD window. 13 films accepted the offer and have started to premiere on the service.
–Linsanity, Big Joy: The Adventures of James Broughton, Love and Air Sex (AKA The Bounceback), Before You Know It, Citizen Koch have all raised distribution funds on Kickstarter and are using those funds for risk free theatrical releases.
While sales deals lagged at Sundance this year, all 3 BFI funded films secured distribution. Those films are the only World Dramatic and World Doc titles that have sold since the festival. The clear advantage of offering marketing dollars coupled with the ease of selling English dialogue to an American cinema audience attracted 3 smaller distributors to make early buys they may not have otherwise and guaranteed US distribution for films that may not have found it. It’s hard to argue with free marketing money and support from the country of origin. Though $51k is unlikely to make much of a difference to sway a major studio interested in wide release films, DISTRIBUTION INCENTIVES certainly won’t hurt the chances of a deal because everybody wins in that scenario.
Also coming out of Sundance, Strand Releasing snagged Lilting, the newly formed Amplify made their first acquisition ever with God Help the Girl and Drafthouse Films caved in to 20,000 Days on Earth. Let’s take a closer look at these three distributors.
Strand Releasing put 11 films into theaters last year and only 1 grossed over $50k.
Amplify is new to the game, but not really. Variance has been putting DIY/service releases into theaters for a while. Half their films last year grossed under $60k.
Drafthouse Films released 6 movies last year. Of those, 2/3 did not gross over $50k
Obviously, some of the films make much more in the digital marketplace after their theatrical release (or in some of these cases, during the release as many are day and date), but the point can’t be lost. Incentives really do attract distribution attention. They are like coupons for distributors and help to reduce risk.
I can bet you right now that there are dozens of filmmakers who are kicking themselves for turning down Vimeo’s offer at TIFF. Especially since the offer didn’t interfere with distribution offers for a film like Cinemanovels, that made an agreement for a traditional US distribution deal on top of their $10k advance from Vimeo.
Looking at the filmmakers who have used Kickstarter to secure funds for distribution, there is a wide range in how the films performed and a few have yet to be released, but they effectively created a risk free theatrical model. Their distribution funding was donated, there is no investor to repay so they can keep the revenue. I feel comfortable saying that in almost every case, each film will make more money than they would have in a traditional theatrical distribution arrangement. Very smart!
As I get ready for the “spam on steroids” that is SXSW, I encourage filmmakers to think of what they can offer that will make their films an attractive buy. There are so many events and screenings at any given time, it’s impossible for an organization like ours to cover them all, but if I know a film has incentives in place, it makes a huge difference when I prioritize my schedule. The film market is no different than any other business. Your film is a commodity and making a good product isn’t enough. You have to come to the table with something else to offer. Don’t wait until it’s too late. Don’t risk having a premiere with no incentives in place. Strategize now! Get partners on board, build relationships with an audience, raise extra funding through crowdfunding (this brings money AND an audience to the table) and show you know the market for and business of your art.
Bryan Glick February 26th, 2014
A guest post from director Leslie Harris. I asked Leslie to participate in this series because to me she represents what the older generation of film directors is facing. The way things are being done now is VERY different to the early and mid ’90s when film financing and large distribution deals were plentiful. A time when her Sundance winning film had a full and celebrated release on the Miramax label. New developments like social media, digital self distribution, and the idea that a creator has to gather an audience and build a personal brand have left some of the older generation shaking their heads. Leslie is diving right in and running a Kickstarter campaign for a new film and I applaud her willingness to experiment and adapt her previous experience to this new world of film finance and distribution.
Even though I have made a feature film before, the Sundance Special Jury Prize winner Just Another Girl on the I.R.T. released by Miramax in 1993, no matter how many films you have made, most filmmakers will tell you making another feature is like starting over from scratch.
When my film was released in the 90’s, it was a boom for independent film financing and distribution and somewhat a Renaissance for the indie African-American filmmakers too. Unfortunately, the boom was mainly for the young, hot, male directors not women. Black women both in front of and behind the camera, well… we were practically non-existent except for a few of us.
Fast forward to today, sure there are more Black actresses working, but not in all genres and the recent controversy about the lack of Black Women on Saturday Night Live exemplifies what we’re facing. The numbers are even more embarrassingly low for Black women behind the camera. There’s a lot of work to do to make a change and that’s why I came to crowdfunding. I think crowdfunding works best for filmmakers who have been ignored by traditional film financing sources and have something passionate to say. Projects that artists can take straight to the audience and encourage their support rather than to studios and investors purely looking at the bottom line. My new film, I Love Cinema, is a satirical comedy about sex, race and politics in a ‘so-called’ post-racial world. The story is about Professor Layla Laneaux, sophisticated, educated and African-American. Layla is obsessed with cinema both in the classroom and the bedroom, but the Professor’s film fantasy world is shattered by racial controversy and a media circus all seemingly out to get her.
The same skills that I learned in the go-go 90’s of indie film are still useful to me today. My experience applying and receiving grants from National Endowment for the Arts, American Film Institute and New York State Council on the Arts is helpful because I had to convince people in a concise way that my story is viable and worth funding. Back then, I put together a reel and wrote the grant application. I also approached people like filmmaker Michael Moore and author Terry McMillan, who both supported Just Another Girl on the I.R.T with a check. Now my reel is a pitch video and my written application is the text on my Kickstarter page. In a way, I have already run a sort of Kickstarter, but now I need to reach many more people about my film idea and need to use all of the new tools available to me.
Social media and the internet are basically the heart of a crowdfunding effort…Facebook, Twitter, Instagram etc. I have learned the value of having a great team of people to help with social media, though I found my team mid-way through my campaign…a mistake! You’ll make mistakes, but doing crowdfunding is relatively new so it is a learning process. I was so happy to find committed young people, especially women, who were internet savvy and happy to volunteer. Search around, it may take a bit of time to find the right person, but there is someone out there to help. My interns are learning new skills that will help them in their careers in film because I think crowdfunding sites for moviemakers is the wave of the future for financing. I couldn’t do this campaign alone. I have learned having your film on a crowdfunding site is similar to making a really small indie film…you have to have a team.
And ya gotta be passionate and tenacious because crowdfunding is a lot of work! I’ve gotten very little sleep, about four hours a night. But my sleep deprivation didn’t just occur during the 30-Days while my project has been live. I’ve been preparing for this campaign for months prior to the launch. First, I did my research about crowdfunding wherever I could find information from blogs, advice from other filmmakers who have done crowdfunding and even You Tube videos to see what worked and what didn’t. I didn’t want to copy what someone else was doing because, in my opinion, every project is unique and your video has to reflect your particular film. I looked at production techniques and editing transitions. For example, it’s effective to use dissolves for this format if you have a one camera set up when one person is talking directly to the potential backers. If you’re not experienced in front of the camera, and most filmmakers aren’t…it’s going to be hard not to flub a line and I flubbed a lot of ‘em! Remember, there are limitations. You can’t use copyrighted material or music in your video unless it is cleared and you have to have permission to use it. So be really creative. Keep your video short 2-3 minutes unless the subject and tone calls for something longer. For example a documentary fundraising video might be 5 minutes or longer because you have a lot of material and it may take a bit longer for the story to unfold with a doc.
Let’s be honest reaching your goal is tough. My advice is to be ultra conservative in determining your goal. Mine is set for $35,000. The style and tone of your pitch video also depends on whether you’re asking for funds in pre-production, production or post. Are you trying to get something new off of the ground or something almost finished into the world?
Remember you have to offer perks and that means you have to produce them and deliver them in a timely manner (don’t forget postage costs!) and make your backers happy. Offer great rewards that are really interesting and valuable, but don’t cost much to produce. For example, I am offering a Production Journal as one of my rewards that will detail my experiences on set during production. It is something I would probably be writing anyway. How much will it cost you to make a T-Shirt? How many do you plan to sell? How much is shipping to India? I had to use my 9th Grade math skills a lot while deciding what rewards I would offer.
Yes, raising funds this way is a tremendous amount of work. While I’ve launched, there is still a lot more to do during the campaign. Update! Update and Update! I keep my page current with photos, links, video and press…Indiewire’s Shadow and Act did a great piece on our film. This experience for me has been exciting. It’s new. Implementing the social media, creating a video that is spread around the world is very cool! I’m a storyteller. The crowd-funding process is all about telling a story. Ask yourself…why does my film deserve funding? Put yourself in the role of a backer.
Who knows if I’m going to make my goal…so take what I have written with a grain of salt, it’s just one experience. For me, it’s been rewarding already. I’ve reconnected with many friends and colleagues. Actress, Jennifer Williams, and my production team have been wonderful in making the video. I couldn’t have done this without my Editor, Jack Haigis. My producer, Erwin Wilson has been at my side all the way. Great people who supported the project… and that’s gold! I’ve met and worked with great women who are savvy in social media. I know I am doing my best. I can always sleep after December 8th the last day of my campaign. So wish me luck and stop by my Kickstarter page. I could really use your support!
Sheri Candler November 29th, 2013
Tags: African American, crowdfunding, Erwin Wilson, film director, filmmaker, I Love Cinema, independent film, Jack Haigis, Jennifer Williams, Just Another Girl on the I.R.T., Leslie Harris, Miramax, Shadow and Act, Sundance
A guest post from Lizzie Crouch. Back in December 2012, Writer/Director Dan Clifton sat down with producer Roland Holmes and co-producer Lizzie Crouch to talk about how they might approach a crowdfunding campaign for Dan’s short film, Patient 39. In this article, Lizzie explores the lessons learned from their ultimately successful campaign, raising over $8000 for the film on Indiegogo. Also included are excerpts from the diary Dan kept while fundraising.
Lesson #1 It’s not just about the campaign; it’s about the community
From Dan’s diary:
The first thing is to discuss what to do with the short fundraising appeal film I’ve made… My appeal is under 2 mins and involves me dressing in pyjamas and making a slight fool of myself (a good thing, apparently), although hopefully the tone is appropriately sincere. Thankfully my producers like it.
There’s lot of great advice online about how to build a good crowd funding campaign. Don’t underestimate how long it takes to do thorough research, but don’t be overwhelmed by it either. There is no set way of doing the perfect crowd-funding campaign, each one is unique, so the real trick is working out what’s right for you.
The most important thing is to figure out the target audience for your campaign. For the Patient 39 Indiegogo campaign we identified a number of audiences who might be interested in supporting us, but given the film’s scientific themes, it was a group we called ‘science-y culture-vultures’ – those interested in the crossover between science and art – that we thought had most untapped potential.
Despite this, we knew that other groups would play a part and ultimately become the film’s audience, so we were careful to include a broad range of content about the film to build a larger online community. The content at the heart of the campaign was aimed at short film fans and science culture-vultures, but careful curation of online content allowed a diverse range of audiences to engage with us.
Lesson #2 Building an online community is committing to a long-term relationship
From Dan’s diary:
The evidence from successful campaigns suggests that what people value above all is not material goodies, but a chance to feel involved as part of the team. After much debate we came up with a list of perks that range from Exec Producer credits at the top of the range, to visits to the set and crew T shirts for more modest-level investors.
As Dan identified in his diary, building a community is about making people feel like they are a part of something – and different audiences will respond to different things. Those who want to donate to the campaign may like thoughtful perks while others may simply want to engage with diverse, inspiring content related to the film or to filmmaking.
In recognition of this we set up a website and social media channels to disseminate articles, carefully balancing new content with our call for donations. Spanning science articles on consciousness and the history of medicine, we built our community around themes that would appeal to them; connected with online ‘influencers’ and key contacts; and kept our campaign fresh by updating the video and making announcements about team members that joined us.
But building an online community is like committing to a long-term relationship. Although most people understand who they’re trying to connect with, many don’t realize the amount of work that goes into maintaining it. Never assume a campaign will run itself – sometimes when we weren’t quite as on top of things are we could have been, we saw the consequences.
From Dan’s diary:
What I am learning is that you definitely have to feed the beast. What I mean by that is even though it seems foolish in some ways, like shouting without hearing an echo back, all the content and tweeting etc. does make a difference in reaching potential supporters. I’ve been away for five days on a shoot and consequently not able to be as proactive as I’d have liked, and sure enough we’ve had a noticeable lull in donations.
All this can be hard work, but a well-built community will reward you at every step of the filmmaking process. Don’t assume though that because you’ve finished the film, the community ceases to be – we are still communicating with ours as we build up to an online release in the future!
Lesson #3 Getting to know your community is humbling (and anxiety-inducing)
When you build an online community, you get to know your audience in a whole new way; you learn their names, where they’re from, etc. This is useful not only when it comes to later stages (marketing and distribution), but also for future projects. But it is also a responsibility that you have to carry on your shoulders!
From Dan’s diary:
Four days to go and we have reached our target, a $500 donation late last night lifting us over the line! I feel amazed and humbled by the whole experience. To feel people’s generosity and support in such an immediate way is something I hadn’t expected, but it is wonderful although I feel a great sense of responsibility too. In the last few days we’ve managed to reach out to funders beyond our immediate circle of family and friends, and it’s great to think that our efforts to widen our base of supporter and followers has had some measure of success.
I believe that our campaign was successful to due the hard work of the team to build and maintain an engaged online community, and we are very grateful for the support we received during our campaign.
Sheri Candler November 27th, 2013
A guest post from Richard Bishop of Empty Cup Media based in Oshawa, Ontario. Crowdfunding via Kickstarter has only been available in Canada since September 9, 2013. I asked Richard to share what his team learned in being one of the first projects on the platform and some of his comments on their success seem to defy conventional advice. Further proof that there is NO blueprint for success.
As a small company foraying into the independent film making industry for the first time, we based part of our film fundraising strategy around running a successful crowdfunding campaign. We first heard about the idea while attending a few Hot Docs workshops over the past two years. After committing to the idea, we did our due diligence – reading books, articles and blogs about other projects’ successes and failures- and we opted to go with Kickstarter as our platform as it had launched in Canada only a month earlier. We thought it would be possible to cash in on some of the general media press surrounding their launch.
When we launched the campaign, we had already completed the production of Heal Myself and we planned on using the crowdfunding money to cover post-production costs. We set a fundraising target of $25,000. We knew that this was a large number and success would require dedication and hard work. Throughout the production of the film, we had continually built an e-mail contact list for all participants as well as developed a solid social media following on Facebook. In our minds, we initially looked at it as a mathematical equation – with connections to over 2,500 people we only needed each of them to donate $10 and we’d be done! Well, we quickly found out that this notion was unrealistic.
We launched the campaign on Oct. 4th and watched the film become 20% funded in the first few days, then the initial flare burned out and stagnation set in. Every day a few people would donate, slowly driving us closer to the goal, but it wasn’t enough to drive us up the popularity matrix on the Kickstarter website. By Oct 30th, 4 days before our campaign ended we had climbed to 62% funded, crunch time set in. It was on that day that things started to accelerate and by the end of the campaign we had reached 106% funded. It was time to celebrate with all those who helped us!
There have been a lot of good posts on this blog already about how to build a campaign to maximize your chances at success, but we thought we’d share some of the things that we learned throughout the process (along with some numerical breakdowns) in hopes that it will help some of our Canadian friends who may be new to the concept of crowdfunding.
Here’s what we learned based on our backer reports and analytics:
-80%+ of our pledges came from people who had direct access to the film either by knowing us personally, liking Heal Myself on Facebook, being on our e-mail list etc;
-Posting update videos on Kickstarter and social media outlets is useful, but time consuming. A more effective use of our time was creating posters, such as these for the same purpose;
-Being featured on the Kickstarter documentary homepage isn’t as helpful as one might think. It did increase traffic and Kickstarter video plays (about a 15% increase), but it didn’t generate much in the way of pledges from people who were not connected to the project in any way (less than 1% of funding);
-Our two most successful award tiers were $100 and $200. The reason for this, we believe, is the rewards we offered at these levels were the most engaging for fans of the film. $100 tier included the special features DVD and $200 tier included the special features DVD and a pair of tickets to a private screening. Backers of our project really gravitated to the idea that they could be part of a physical event – we gave away over 88 tickets in this manner!
-Broad spectrum advertising or marketing had very limited success. We had advertisements on a variety of websites (through our personal connections), went on TV and a radio show, but none of these things brought in significant monetary pledges (less than 5% of our goal).
-Niche marketing was highly successful – we posted online on a variety of blogs and websites that were directly related to the subject matter of our film. Theses avenues brought in a fair amount of pledges (more than 15% of our goal).
-There is no substitute for hard work. We were using social media and e-mail all day every day to contact our personal connections. It was these people who spread the word to their contacts, creating a web of support that reached more people than we could have alone. Relying on your friends and family for help is crucial for projects of the size we undertook.
Although running a successful campaign is great in financial terms, after all you now can go ahead with the next stage of your film project. But the community you’ve built around your film is equally important. We are now in the process of thanking the great people who’ve funded our film and shown interest in our project. We believe that they will be our greatest assets when creating a grassroots campaign of screenings and events once Heal Myself is completed. Finding ways to demonstrate our gratitude and keeping these people informed as the project develops is an ongoing process, something we are continuing to experiment with and learn about. We are open to hearing any suggestions about how to keep our backers engaged going forward. If you have suggestions, please email (info @ emptycupmedia.ca) us.
Best of luck with future campaigns, we hope that some of our experiences can be put to good use!
A quick note to Canadians who are using crowdfunding:
As of early October 2013, the Canadian Government has ruled that all money received through crowdfunding is counted as business revenue. This is the case even if you are an individual raising money for a film without any company ties. This is a big deal as it really alters the amount of money you will receive in the end from your campaign as well as create some more paperwork in order to correctly deal with the tax implications.
The money the crowdfunding source takes as their cut is deductable as business expenses. Also the money that you use to fulfill rewards is deductable. I am not fully sure of all the tax implications and I am sure that this will be an evolving issue as time goes on. These tax rules will certainly inflate the initial fundraising goals for projects making successful projects that much harder to run – especially if you are private sector and don’t have non-profit ties so that you can offer tax receipts for donations!
Empty Cup Media is a video/photo company serving clients in and around the Greater Toronto Area. You may follow the progress of Heal Myself by connecting on Twitter, Facebook or joining their email list.
Sheri Candler November 26th, 2013
Posted In: crowdfunding
Today’s guest post is from Seed&Spark’s CMO, Erica Anderson. Seed and Spark is selective crowdfunding platform. Before Seed&Spark will approve a project for the platform, all components for a successful campaign need to be assembled: a strong team; the seed of a great film; and a compelling purpose behind your proposed film.
One of the hardest things to remember when you’re thinking about taking a film from idea to execution is that raising money is not, in fact, the hardest part of filmmaking, though it may be the most uncomfortable. The most difficult task is getting anyone to see it when it’s finished. It’s not only difficult, it can be really expensive. Studios spend 1-10x production budgets on marketing. Indie filmmakers don’t stand a chance in that environment (although, marketing should ALWAYS factor into your budgets). Enter crowdfunding: a way to raise money while marketing your film.
In this light, Seed&Spark would like filmmakers to start viewing crowdfunding not as a necessary evil (or a mark of a film that simply can’t get financing otherwise), but as a key tool to engage their audiences in the filmmaking process and to grow a devoted fan base. The fact that you also get to raise a chunk of change is important, but it’s the short game. (A devoted fan base will make raising equity So. Much. Easier.) The long game is your career and making sure there are people who want to pay to watch your films for as long as you can make them. That means building in to your preproduction an audience-engagement campaign. Every film is different, and there are as many ways to engage your audience as there are filmmakers. That said, we have identified some guidelines and critical questions every filmmaker should consider if they want to crowdfund (With us, and with anyone else.).
Crowdfunding is not an exact science or a paint by numbers affair, but the wheel does not need to be invented with every campaign. Lists are really helpful. Below is a list of criteria that we look for in project submissions that would like to crowdfund with Seed&Spark. These “guidelines” are largely based on the potential for a filmmaker and project to foster a supportive and engaged audience. We work with all our filmmakers to make sure they’re maximally set up for success – a tactic that has led to a 70% crowdfunding success rate (compared to less than 40% on other platforms).
Pitch video:Your pitch video should either make us fall in love with you or give us a great sense of what the finished film will be like. The best pitch videos will do both. Because this is a campaign for a film, the video has to be great and should exemplify your filmmaking abilities and techniques. Remember, people will invest in you andyour storytelling talent, rather than in a “concept.” You have to demonstrate you’re a good editor: people stop watching pitch videos at 90 seconds.
Story: The story of your project is why YOU need to make THIS film NOW. Film and filmmakers are naturally suited to building their audience using Who are YOU? What is THIS project? And WHY does it need to be made? Give me an arc! Give me Drama! Make me care as much as you do! We ask you to tell us about this project. It should be personal. What are you offering to the community such that they should want to get involved with you?
Audience: The easiest way to start telling this story is to think: who is the actual audience for this film? Where do they hang out online? (So I know where to share the campaign?) What speaks to them? If you’re saying to yourself “Well, it’s men between the ages of 18-25,” you’re doing it wrong. Do you have a sense of who your audience really is? What kinds of music, events, things do they like? This is important not just for your pitch video, but also building your wishlist and incentives. They need to be personal and interesting to your crowd.
Team: The scope and budget of the film can be aspirational, but should match your experience, abilities, and stage in the process. If you’re raising $500,000 for a big period drama, you and your team should reflect that capacity. (Also, don’t run a crowdfunding campaign by yourself. Just don’t do that to yourself.)
Outreach: Take a look at your current social media and personal reach. If 6% of those people give $20 bucks, do you reach your goal? No? Then you have to formulate a plan to reach beyond that circle. Regardless of where you are in the filmmaking process, are you already engaging with your potential audience? Examine what gets people excited when you post. Do more of that. Do you have a social media presence on as many outlets as possible? Have you organized your contact lists on email, Facebook, Twitter, YouTube, Pinterest, Instagram, Tumblr, Reddit etc? Or do you know your audience spends most of their time on just one of these platforms? Focus your efforts on what works, and don’t waste time on what doesn’t. That means you’ll have to run some tests along the way.
A plan for success: Have you thought through how to successfully complete your project and get it to an audience? Your distribution plan could range from “We’re planning to apply to top festivals and get picked up by Magnolia Pictures” to “We’re going to pursue direct-to-audience distribution as soon as the project is complete.” Frankly, since option #1 happens for 0.01% of films, you should probably have a really comprehensive, thoughtful backup distribution plan that involves just as much work as the crowdfunding campaign. Don’t assume you can jump right in to your next project after this one premieres at festivals. 99.9% of the time, you are also responsible for getting that film to market. That is also a plan for success.
Time: Do you have time to run a campaign? Contrary to popular belief, if you just build it, they will NOT come, no matter what platform you use to crowdfund. You will have to capture your audience and then keep engaging them – long after the campaign and film are finished. A crowdfunding campaign should be thought of as time added on to pre- or post- production, not as something that can be run in tandem. In order to maximize the utility of crowdfunding, you’ll want to build in time once or twice a week for your entire career to engage with the folks who have chosen to support you.
While this list is not exhaustive (though possibly exhausting for some), it’s a very good start. These are questions I pose to every filmmaker who is interested in our platform. Submitting a campaign is a process and we don’t expect all of these criteria to be met before accepting a project. However, we find these criteria and questions essential not just to successful campaigns, but successful filmmaking. As our inspiring CEO and my dear friend Emily Best said so eloquently, “Great crowdfunding is the efficient frontier between belief in your idea and the desperation to get it made. If you’re willing to put in the work to make a campaign successful, you’re on your way to a lifetime of truly independent moviemaking.”
Sheri Candler November 25th, 2013
Posted In: crowdfunding
Today’s guest blogger, Jan Selby, is in the midst of running her second crowdfunding campaign. Taking the lessons she learned from prior fundraising on Kickstarter, she is using Indiegogo this time. Find out why the switch?
Crowdfunding is not for the faint of heart. It requires months of planning, hard work, and follow-up. It’s worth it if you are prepared and motivated. I’ve launched two campaigns for feature-length documentary films and found them to be powerful strategic tools to help build a community and raise money.
Sheri asked me to summarize what I’ve learned through one successful Kickstarter campaign and a second Indiegogo campaign (currently in progress). I’ve tried to pack as much as I could in this post to share what I’ve learned. I’m not an expert, but I hope my experiences will be helpful to you as you embark on your own crowd-funding journey.
My first bit of advice is to create a team who will work with you for 6 months – 3 months before you launch, then during and after your campaign. I’m a detail-oriented planner by nature. If you’re not, find someone who is and make him/her part of your team. It’s important to avoid launching your campaign until you are fully prepared. Do all you can to be ready before you launch because you’ll be incredibly busy during your campaign.
How long should your campaign be? Most campaigns do best in the first and last week. As one friend told me, “The longer your campaign, the longer your time of suffering in the middle!” I like having a week or so to spread the word about the campaign before the 30-day countdown begins. I also plan to use the first few days to work out the kinks that are inevitable, no matter how hard you planned ahead.
Campaign 1: Kickstarter
My first campaign raised $21,112 to complete my first feature documentary, 9 Pieces of Peace (working title). You can check out the campaign home page at the URL www.9piecesfilm.com/fund. Notice this URL is not the one we were assigned by Kickstarter. Create your own URL that is easy to remember and that you can use after your campaign ends. Research how to redirect your new URL to the Kickstarter URL and then you can choose what to do with it after the campaign ends. I’ve kept it directed to our Kickstarter page, but you could also redirect it to a “Donate” page on your film website.
There are three core elements of a crowdfunding campaign home page. Before you launch, you will need:
1. A pitch video/film trailer
Having both a pitch and film trailer is important if you can swing it. It’s great if the production quality can reflect your capabilities and your vision for the film, but don’t obsess over it if it can’t. Be creative and speak from the heart. Mine weren’t as good as the film will be, but they worked. Consider combining them as I ended up doing in my second campaign.
2. Well-designed rewards
Take the time to research what others have done. Carefully calculate the direct and indirect costs to deliver each reward (including the fees you will pay to the platform and the credit card processor), including shipping and your time. Add 3 to 6 months to when you think you can deliver the reward because everything takes longer than you expect. You can’t change the reward description once someone has given at that level, so be sure to add all the details. Leave room to add new levels. Be thoughtful about the language you use and be consistent. For our Kickstarter campaign, we chose to use the words “backer” and “supporter” plus “rewards” and “pledges”. (For my second campaign on Indiegogo, we are using “donors” and “perks,” but it’s a very different film and campaign.)
3. Well-written text.
Write text that tells your story, builds trust, and motivates the reader to want to be part of the community that makes your film happen. Use subheads to break up the text and add images/graphics to make it more interesting. Remember that MANY people have no idea about how crowdfunding works, so write text for an audience that doesn’t understand it. You can change the text of your page during the campaign, but not once it’s over, so be sure you are happy with the way it looks at the end of your campaign.
Once you have your home page content defined, you might think you are ready to launch. Not yet. Here’s a partial list of what I recommend you and your team do before you launch your campaign.
Network Build up your community of followers on all your social media channels (if you don’t have them, get them), build an email list, network with organizations whose members would want your film to be made, and create a media list to use during the campaign. Meet with anyone who might be interested before and during the campaign.
Develop content and plan promotions Develop your page content, design an e-blast/e-newsletter template, design and print postcards, design a flyer that you and others can post, define your social media messaging calendar and graphics/clips/quotes/images (we used Facebook, Twitter, Pinterest, and Google+), create a graphic that tracks your fundraising progress and plan to use it to update your Facebook cover image daily, define your online advertising campaign strategy (we created and analyzed Facebook and Google ads), define thank-you surprises for supporter updates, and define incentives that you’ll use to entice prospective supporters (our Kickstarter page highlights the last one we did at the top of it).
Get lots of sleep.
Once you launch your campaign, your priority will be communication. Kickstarter (and other platforms) are designed for social media users. Yet, to maximize your chances of success, you need to reach beyond these boundaries.
I sent private Facebook messages to hundreds of people and this worked incredibly well. I also sent hundreds of email messages out to friends who don’t use Facebook and had never heard of Kickstarter. Each message briefly explained the campaign, the status of it, and a request to either contribute or spread the word. Our team distributed thousands of postcards that directed people to our Kickstarter page and emphasized the purpose of the film and the “all or nothing” aspect of the campaign to create a sense of urgency (which was real!). I set up coffee/lunch/drink meetings with friends, turning them into evangelists and sending them off with stacks of postcards.
Remember to continually thank your growing list of supporters! Most platforms make it easy to send out updates. Your supporters want to hear from you. They are also your best advocates. They are invested in your campaign in more ways than one. If you can keep them energized, they will continue to share it.
Communication is time consuming, whether it is online, by phone, or in person. Your team can help in many ways. Together, your goal is to expand your reach as far as possible to people who will care about your project. You never know where your money will come from. Sure, there will be low hanging fruit, but I was shocked when my largest contribution came in on THE LAST DAY from someone whom I hadn’t seen for a year, but who had been following the campaign the whole time, unbeknownst to me.
Overall, our Kickstarter 9 Pieces of Peace campaign was a resounding success, but I must admit, it was very stressful. It was hard for me to sleep or relax for the entire 39 days (and 936 hours). I kept thinking: How would I forgive myself if I didn’t reach my goal because I hadn’t worked hard enough? (Yes. Very type A. Can’t help it. Born that way.) Was I happy with the results? Definitely! The moment I saw online that I had reached my goal, I unexpectedly burst out crying. I think it was a combination of the joy of reaching my goal and the relief that it was over. It’s important to be honest with yourself about if you and your team are up to the challenge.
Campaign 2: Indiegogo
When it was time to launch my second crowdfunding campaign for a documentary film about the transformative power of Montessori education, Building the Pink Tower (working title), I wanted to try a different approach. To be perfectly honest, I was still burned out on the stress of an all or nothing Kickstarter campaign a year later and didn’t know if I wanted to take on that level of intensity again. But my co-producer/co-director, Vina Kay, and I chose Indiegogo because we felt it was a better match for our film.
If you conduct more than one crowd funding campaign, you may be able to build upon the community of supporters you establish with each one. For me, there wasn’t much overlap between the two audiences (except for a few family and friends).
It’s important to think about niche audiences for your film and use this information to create a strategy for your campaign. For this crowd funding campaign, we have the opportunity to tap into an existing group of supporters. There is an established Montessori network – people who love it because they have had a direct experience with it either as a student, parent, or teacher. Vina and I spent the last two years learning about and connecting with this Montessori infrastructure in the U.S. and beyond. Our fundraising trailer had been viewed more than 15,000 times on You Tube, and a short video we created that reflected the vision for our film had been viewed more than 50,000 times.
Our current goal of $50,000 is high, but we feel we have the potential to reach it with the support of this passionate Montessori community. We had secured challenge grants of $20,000 as an added incentive to help us reach our goal. Most importantly, although we are optimistic, we want to be able to keep the money raised if we fall short of our goal. For these reasons, we felt Indiegogo was the best platform for this campaign.
In addition to what we did for our Kickstarter campaign, here’s a list of a few more tricks we are trying on this campaign:
-We created fewer “perk” levels and designed them to minimize our expenses; we combined our pitch and trailer into one video; we created a digital image that “donors” could use as their Facebook profile photo; we created photo/quote graphics that are popular reposts on Facebook; and we have paid to “boost” posts on Facebook with strong results.
-In addition, we have created opportunities to have our campaign mentioned in Montessori media, at national conferences, and in school newsletters.
-We are also grateful to be working with a public relations expert who is donating her time to help us explore how we can attract the attention of the local and national media.
One last topic that is important to consider for any crowd funding campaign is whether a donation is tax-deductible. Both of my films have a fiscal sponsor (IFP MN). This allows donations made through the fiscal sponsor to be tax deductible. This means that when a donation is made through Kickstarter or Indiegogo, it isn’t tax-deductible. Many people won’t care about this, but a few do. We have handled this by having a brief mention on our Indiegogo home page with a link to our fiscal sponsor donation page. Donations made through this page do not count toward our Indiegogo goal. I have since learned that there is at least one fiscal sponsor, Fractured Atlas, who has a relationship with two platforms (Indiegogo and RocketHub) that will allow donations to be tax-deductible. It would be worth looking into whether you can gain fiscal sponsorship. [ed. It can take time to qualify, so do this long before you launch a campaign].
Our Building the Pink Tower Indiegogo campaign ends on December 18th. To follow our progress, visit www.donatepinktower.org. If you know anyone who has been touched by Montessori education, please share our campaign with him or her. We are committed to making a film that will change the national education debate. (Thank you!).
I wish you the best of luck in your crowd funding endeavors. I hope sharing what I’ve learned so far will contribute to your future success!
Jan Selby is a multiple regional EMMY© award-winning producer, director, and founder of Quiet Island Films, a full-service video production company with national clients. After 25 years in corporate marketing, Jan followed her heart to become a filmmaker and video producer/director. Follow Building the Pink Tower on Facebook, Twitter and add them to your circle on G+
Sheri Candler November 21st, 2013
Posted In: crowdfunding
Tags: 9 Pieces of Peace, Building the Pink Tower, campaign text, crowdfunding, Facebook, fiscal sponsorship, Google Plus, indiegogo, Jan Selby, Kickstarter, Montessori, network, perks, Pinterest, Pitch video, promotion plan, rewards, Twitter, Vina Kay, YouTube
We continue to look at filmmakers who successfully have run more than one crowdfunding campaign in order to learn how success builds on itself. This guest post from UK based filmmaker Christopher Bevan of YSP Media talks about the importance of setting a reasonable funding goal and communicating regularly with your donors.
As an independent filmmaker, I was very keen at looking into crowdfunding as a viable option to get our next project off the ground. I’d first heard about the idea of doing this at Chris Jones’ Guerilla Filmmaker’s Masterclass back in 2011 and, when the time came in March the following year, I made the decision to press ahead with our first crowdfunding campaign for a short film called Caught in the Headlights. I chose to use IndieGoGo due to the flexible funding option and also because, at the time, dollars were the only currency on there and I wanted it to be open for international backers.
Having watched lots of other crowdfunding pitch videos, it was clear to me this had to be well made and feature interviews with the team talking passionately about our project.
What helped was already having an existing social media base to reach out to with regular content updates. The first campaign was an overwhelming success for us and we raised $2893, or 181% of our target with backers from all around the world. From this campaign I learned a lot and it was an exhausting experience, but well worth it. The effort of continually pushing the campaign through social media can be a trying process and much of the campaign I ran alone, adding to the work involved, but again totally worth it.
The biggest thing I learned from running that campaign was perk fulfillment. I listed perks that, once factored in, cost a lot to create and took up a lot of time to fulfill. Fortunately we raised more than our goal, so this didn’t affect the film’s budget, but when we had American backers qualifying for perks that required additional postage, the numbers didn’t add up.
In the end, we wrote to backers explaining the situation, offering them the option of digital versions of the physical items to cut down costs, and all were happy to accept this to help the film. Yes, we essentially offered more than we could deliver in terms of perks, but on the one or two items where this became an issue, we were honest and upfront about it. Many backers are more concerned about the project, but giving them the information and choice is still very important. The film turned out well and went on to receive several awards and nominations on the festival circuit.
As far as sending updates to the backers through IndieGoGo, this started frequently, but as post-production continued, these updates became more sporadic as fewer events were happening that warranted passing news on to our backers. Once we began the festival journey, we updated our backers each time we were nominated for or screened at a festival. I did find it was easier to direct backers to our social media channels if they chose to follow them as this was far easier to update and more flexible too. The film is now available online and since we are no longer contending for festivals, we have ceased updates on the project and informed backers of this news. They can of course follow us through social networks still.
Our second campaign ended earlier this year for a short film called Love & Other Chairs
A similar funding target was set and this time we were fortunate enough to reach 136% of our target. This is where the lessons of the first campaign came through. We created perks that were mainly digital, cost less to produce and were easily manageable, but still valuable. They included a mention in our Twitter feed and Facebook page, thanks in the end credit roll of the film, a thank you credit on imdb, as well as a walk on role, and executive producer credit. We did away with perks that required posting, everything was delivered online.
In terms of communication with backers, we used videos to convey messages on occasion, but again this would happen more frequently depending on what news we had on the film. We did use the IndieGogo update function a lot more during this campaign, releasing concept art and casting details to backers throughout to keep the momentum going.
During the campaign for Caught in the Headlights, we found that our $25 perk was the most popular, and this is where we’d directed most of our rewards. We’d looked at IndieGoGo’s stats to back this up and when creating the Love & Other Chairs campaign, we created an equivalent £20 perk that had similar weighting and once again this proved to be the most sought after perk. So we learnt the second time round about stacking up what people were going for.
We also chose to reach out to the same backers who had contributed to us in our first campaign via a direct email campaign, details of which were available from our fulfillment spreadsheet generated by IndieGoGo after the first campaign. I would estimate nearly half of our backers came back again to follow up their support, some upping their contribution and going for a higher credit on the film this time around. I think most donors want to see a quality product at the end of it. Most perks that short films can offer don’t have huge monetary value, but offering a credit or being a part of a project have the most appeal.
Being honest and passionate about what you are creating is very important as well as sending contributors regular updates to show that you haven’t just used them for the money and ceased communication. I have seen so many campaigns that send one, two or sometimes no updates and don’t talk to the people who have already supported them. I have personally backed 6 or so campaigns now and am always more attracted to filmmakers who interact and keep in touch.
Managing the donors can be tricky, but the spreadsheet function on IndieGoGo helps in that you tick off backers who’s perks have been fulfilled as well as maintaining a list of what you still need to do. It is a challenge to run one campaign, let alone two back to back, but our success encouraged us and the results were worth it.
I think in order to have the best chance at success, you must set a target that is achievable based on having pre-existing material. Had we set out for £2000-3000 and been overly confident the first time around, we may not have hit our target. Yes it is hard work running these campaigns, but the pay off is great in that you have a ready made audience for your films. Know your audience, know your realistic funding target, know your timeframe and try to bring a track record. This is what will give people confidence to support your work.
Christopher Bevan is an award winning filmmaker specialising in directing, producing and writing. He has amassed a wealth of experience over nearly 8 years of filmmaking whilst actively working on over 60 projects. His films have been screened at festivals both at home and abroad. His award winning short film Caught in the Headlights (2012), picked up best picture and the audience award at the Transitions Derby Film Degree Showcase and has been nominated for several other awards. He is in post-production on his latest short Love & Other Chairs (2013) and the pilot episode of sitcom Jobseekers (2013). He runs production company YSP Media based out of Derby, United Kingdom. You may follow him on Twitter @chrisbevan89 @yspmediafilms and on Facebook. Also, on the Facebook page for Love & Other Chairs.
Sheri Candler November 19th, 2013
Posted In: crowdfunding
Tags: Caught in the Headlights, Chris Jones, Christopher Bevans, crowdfunding, donor communication, Guerilla Filmmaker's Masterclass, independent film, indiegogo, Love and Other Chairs, perk fulfillment, pitch videos, YSP Media