Investing Through Crowdfunding: Want to Invest in a Christmas Movie?

Note: This is not a sponsored or compensated post, just my thoughts on recent communication and new knowledge.

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Would you be interested in helping fund a movie with the expectation of receiving part of the profit?

You might be thinking, “Yeah, right. I don’t have that kind of money.”

Well, that’s not true these days with crowdfunding as an investment vehicle.

Crowdfunding?  Yep, crowdfunding.

What is Crowdfunding?

If you’re not already up on crowdfunding, here’s the gist of it.

Crowdfunding is the method of raising money from many investors, in small amounts, instead of large amounts from a small number of investors.

That’s it. There’s no simpler way to put it.

Crowdfunding vs Traditional Capital Raising

Before crowdfunding, if I wanted to fund a project, say a movie, I would traditionally pitch my idea to a limited number of potential investors who each would have a large amount of capital that they might invest in my endeavor.

With the introduction of crowdfunding, I now have the opportunity to reach out to MANY individuals that don’t necessarily have a large amount of capital to invest, but have some that they would like to put into investment avenues that are out of the ordinary.

It’s all about reaching out to the “Crowd,” the crowd that has the funds and willingness to invest in my project.

Crowdfunding is all about the numbers, reaching a large number of people with money to invest.

Diversify

If you’be been investing you’ve heard the term diversify and crowd funding offers another avenue to do so. It’s best to limit your exposure though, as things might not turn out as positive as one might hope.  You know how things go up and down and some really go down.

Do some research, as there’s a bunch of opportunities out there, but invest money that you’re not going to need for a number of years when investing in start up companies and such.

Here’s Something Different

I’ve been investing since the early ’90’s, but haven’t had the opportunity to invest through crowdfunding.  Statute has only recently changed allowing the opportunity. In the past, one could only receive a reward for ponying up some dollars.  Caps, shirts, and other items were the norm.

Law passed earlier this year allowing folks to invest through crowdfunding, you know the kind of investing that makes sense, that which can pay back in funds, not in gimmicky items? I don’t know about you, but I don’t need another t-shirt, or tote bag, or water bottle, or certificate of appreciation. I can always use more $$ though.

So, where am I going with this? I was recently contacted by a Money is not Taboo reader (Associate Producer Katherine Botts) about an upcoming movie that’s being produced through crowd funding. It’s a Christmas story that’s expected for release this Christmas season.

Interesting?

I think so. The minimum investment is $100.00. That’s a small amount for folks with discretionary money.

How About a Bit More Info?

Here are some of the details, and more can be found at That Christmas Movie.

Investment type: Revenue Participation Rights.
To begin with, for investors, 100% of the adjusted gross proceeds from the movie goes straight into your pocket.

Then, once you’ve gotten 100% of your initial investment back, that ratio adjusts, and 50% of the film’s profits are yours in perpetuity. That’s forever and that’s a mighty long time.

Minimum Investment: $100.

Security Type: Revenue Participation Rights.
Round Size: 
Min: $10,000; Max: $100,000.
Interest Rate: 
Adjusted gross proceeds sharing agreement which provides the investors 100% of the Company’s adjusted gross proceeds up to the repayment amount of 100% of their investment, and 50% of adjusted gross proceeds thereafter.
Length of Term: None.
Conversion Provisions:
 None.

Pre-Money Valuation: $2,000,000.00

Okay, so who’s making the movie, what’s it about, and who’s in it?

The executive producer is Jay Kogen, winner of four Emmys® for The Simpsons and Frasier, and currently the executive producer on the hit Nickelodeon show School of Rock.

Donald Markowitz, Oscar® winner for the hit song “I’ve Had the Time of My Life” from Dirty Dancing, will be writing a brand new Christmas song for the project.

I’ll Be Next Door For Christmas is a warmhearted, upbeat comedy about a family that’s crazy for Christmas. Except for the 16-year-old daughter — her family’s over-the-top Christmas celebrations have made her life miserable. When her out-of-state boyfriend decides to visit for the holidays, she’s determined to spare him her family’s Christmas obsession, so she hires actors to play her parents and stages a fake Christmas dinner in the empty house next door. What could go wrong?

Actress Jennifer Tilly, known for her Oscar® nominated role in Woody Allen’s Bullets Over Broadway, is attached as a co-star.

This is definitely something out of the ordinary for me.  Well, to be honest, crowd funding is out of the ordinary for me, but as I’ve said before Money is not Taboo has come about from my blundering through the financial world.

I learn something new every day.

Here are some links that I’ve found worthwhile.

Crowdfunding Basics (Investopedia)

What is Crowdfunding? (Fundable)

Top 10 Crowdfunding Sites (Crowdfunding)

The Unique Value of Crowdfunding Is Not Money — It’s Community (Harvard Business Review)

Top 10 Crowdfunding Websites (Entrepreneur)

So, what do you think? Investing through crowdfunding is definitely an interesting concept. I think I’m going to look at it a bit more closely, and maybe even dip my toes in the pool. How about you, want to invest in a Christmas movie?

Any way about it, I’ll be looking forward to I’ll Be Next Door For Christmas.  Maybe I’ll be one of those that make money off of the movie.

How about you, have you done any investing through crowdfunding? If so, please let us know how it worked out.

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About Keith

Keith, aka Shin, is a 50'ish former teacher and counselor who's blundered through the world of personal finance, learning the basics later in life than he likes. It's his mission to share as much about personal finance as possible, helping others get a handle on it, much earlier than he did.
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