This was a landmark week for US-based film investing. For the past 80 years, those looking to raise funds for their film projects – or film startups – could not declare that they were doing so to the world at large. The law required them to talk to investors individually, one painstaking meeting at a time. Now that the SEC has voted to approve Title II of the JOBS Act, this ban on “General Solicitation” has finally been lifted. Filmmakers will be able to advertise their fundraising publicly, so long as they make reasonable efforts that investors financing the film are accredited. Now promoting publicly on Slated (not only to our members), tweeting, Facebook postings, press mentions, even billboards on Sunset Boulevard will be legal…
There is a period of 60 days until the SEC allows filmmakers (and all other fundraising entities) to advertise. So expect to see some changes on Slated by mid-September. One complication is a potential pre-filing of a “Form D“, which could add time and/or cost to the fundraising process. We’ll keep you posted on solutions for that and there will also be a more in-depth Filmonomics analysis of the new ruling next week. In the meantime, if you love reading government documents, here is the full brief.
Unfortunately, Title III of the JOBS Act – which promises to open the crowdfunding gates by also allowing unaccredited investors to participate in private offerings – will not be ruled on until 2014. But with an estimated
8.7 million accredited investors in the US, the Title II ruling will already help accelerate the fundraising process by virtue of greater promotional reach. We’ll certainly be working on accredited investing using general solicitation over the next couple of months. After all, as a Forbes business columnist noted this week: this is exciting news for entrepreneurial fundraising and for investment crowdfunding platforms that connect new ideas with investors.