It’s official – crowdfunding is one of the hottest trends for funding creative efforts and now, new business ventures. While more and more filmmakers and celebrities are surfing the high swells of crowdfunding, now small businesses and entrepreneurs are paddling out to catch a wave of their own.
You read that correctly, stop rubbing your eyes in disbelief: crowdfunding is now picking up steam in helping launch micro- and small-businesses.
I mean, this is getting to be downright revolutionary.
This phenomena isn’t going anywhere for independent film. Just this week, crowdfunding got one of its higher-profile projects. Colin Hanks (King Kong, The Good Guys) announced via twitter his intent to produce a documentary; he tweeted on May 30th:
So what, you are thinking? Well – how about this: as of the printing time of this post, Hanks has already hit 74% of his $50,000 funding goal. All in just two and a half days. That’s just ridiculous.
Even film trades are getting into the act, trying to raise funds to come back to print; FilmThreat Magazine continues to publicize its efforts to get back to print via Twitter.
If you haven’t noticed, even more articles are appearing in the mainstream media, perhaps beginning to solidify the crowd-funding phenomena. Here we are seeing that this trend has spread its wings, helping to spur the growth of small businesses. Articles on CBS’s BNET web site and in USA Today continue to give credibility to the growing trend. Even the local news stations are picking up local spin on this new funding strategy; the CW-6 San Diego wrote:
The site is called “Kickstarter.com” and Zach Negin and James Magnatta joined about a month ago; creating a display page for their new line of mustards.
That said, I think that the final straw is not that it’s getting local media attention, but that it’s getting national attention. According to a column by Bloomburg.com columnist Susan Antilla, a recent push from Whoopi Goldberg to ease restrictions on crowdfunding regulations has made headlines.
In the article, there was a certain lament to the lack of oversight and restrictions in the crowdfunding model. The article reads in part:
“This isn’t about de-regulation, it’s about modernizing regulations,” says Karen Kerrigan, president of the Small Business and Entrepreneurship Council, a beltway lobby group.
But others fear the move would weaken investor protections and lead to fraud. Instead, they want to limit online investing to “accredited” investors—those who have a $1 million in net worth excluding the value of their primary residence.
Arkansas Securities Commissioner Heath Abshure says in an interview that crowd-funding sites advertise start-ups to a broad audience, and could easily attract people who shouldn’t be involved in speculative offerings.
“First it’s $100, then $200 and next thing you know they’re risking thousands of dollars they can’t afford,” he says. Mr. Abshure says SEC registration includes reporting and disclosure requirements that provide data investors need to make informed decisions.
Ahhh – now we have a little drama, some conflict in our story. After all, there is money to be made, and money to be spent. Don’t take my word for it, take Angus Loten’s word for it … he of the Wall Street Journal. In a WSJ blog post a little over a month ago, he reported how the White House is now partnering with another crowdfunding site, Indiegogo, to help spur the growth of small business in America
How respectable is crowd-funding becoming as a source of start-up capital for smaller companies?
- President Barack Obama speaks with Small Business Administration chief Karen Mills during the Winning the
- Future Forum on Small Business in Cleveland.
This week,crowd-funding site IndieGoGo joined Microsoft, Google, American Express and other corporate heavyweights in a White House-backed effort to boost small-business growth and drive the nation’s economic recovery
So, how do you know when a trend is legit – when the government takes notice. That is also how you know a trend is now a full-fledged business strategy.
It will be interesting to see how the SEC continues to monitor crowdfunding, and who will be cast as the champions and villains of this new small business strategy, and how the ramifications will hinder or help independent film.