Under the 2012 Jumpstart Our Business Startups Act (“JOBS Act”) the Securities and Exchange Commission (“SEC”) was required to adopt rules to allow equity Crowdfunding. The new rules promised an easier way for startup companies; and filmmakers in particular, to raise money to finance their projects. It took the SEC more than three years to adopt the rules to permit filmmakers to offer and sell securities because the SEC struggled to balance demands for fewer SEC requirements with warnings to protect investors from potential fraud.

Crowdfunding is using the internet to raise financing from the public for the purposes of financing projects. With the new rules, filmmakers can now use funding portal websites like Kickstarter and Indiegogo to find equity investors for their films.  

An equity investor is someone who invests money to make your film by buying equity shares and if the film is profitable they get their initial investment back and a percentage of the profits. The rationale is these new rules will likely encourage small investors to participate in film investments providing filmmakers with more money to make films.

$1 Million Limit

Equity Crowdfunding will be available to any investor regardless of their income or net worth. Investors with annual incomes or a net worth of less than $100,000 can contribute up to $5000 annually. Wealthier investors can contribute as much as 10 percent of their annual income or net worth, up to a maximum of $100,000 in one year. Filmmakers are limited to raise a maximum aggregate amount of $1 million through Crowdfunding offerings in a 12-month period.


Filmmakers relying on the new Crowdfunding rules are required to, among other things:

offer the securities through a registered broker-dealer or SEC-registered Crowdfunding "portal"; use one Crowdfunding portal at a time; make significant disclosures about the production company including its founders, business plan, use of proceeds, financials, any related party transactions and other key information; and file an annual report with the SEC and provide it to the investors.

Funding Portals

A funding portal, like Kickstarter or Indiegogo, is required to register with the SEC on new Form Funding Portal, and become a member of a national securities association (currently, FINRA).  Additionally, under the new rules, to reduce the risk of fraud, the funding portal is required to provide financial information to investors about the investments being offered; and disclose the compensation the portal receives for selling the equity shares.

Rules In Effect

The new rules and forms will become effective 180 days after they are published in the Federal Register, except the forms enabling funding portals to register with the Commission, will become effective January 29, 2016. 


Contact my office if you need assistance. We will organize and file the proper forms with the Crowdfunding Portal on your behalf allowing you more time to focus on your film.