If you recall, back in April 2012, Congress passed and the President signed theJOBS Act (Jumpstart Our Business Startups) into law.

The rationale behind the Act was to stimulate the economy by relaxing regulations on raising capital for startup companies. This was great news for filmmakers because the Act made it so much easier for filmmakers to raise financing for their films.

However, the Act did not go effect because the Securities and Exchange Commission (SEC) required additional fine-tuning of the rules and regulations in order to protect investors.

On March 25, 2015, after three years of prolong waiting, the SEC finally announced the final set of new rules, Regulation A+ offerings, which makes it easier for filmmakers to access equity finance through crowdfunding.

With the new rules taking effect within 60 days, filmmakers can now utilize crowdfunding to offer more than just t-shirts and coffee mugs for donations.

The New Regulation A+ offerings

Equity Crowdfunding Websites: Now filmmakers can use Regulation A+ offerings to raise equity finance on crowdfunding websites. Essentially, this means you can use the internet to find equity investors for your film. Unlike the donation paradigm, an equity investor is someone who gives you money to make the film by buying equity shares and if the film is profitable they get their initial investment back and a percentage of the profits.

All Investors: For the first time ever, filmmakers can solicit investments from allinvestors, not just accredited investors (net worth exceeds $200k), but the general public. In other words, you can raise money from the entire “crowd.” For the first time, unaccredited investors (net worth $200K or less) can invest up to 10% of their annual income or net worth (excluding their home).

Money raised: Since the SEC significantly increased the funding limits, now you can raise up to $50M in equity financing.

Advertisement and solicitation: You can publicly solicit, market, and advertise to investors anywhere, including all forms of social media.

Disclosure Documents

The new law is a game changer. It will change the landscape for film financing forever. However, you still must comply with the existing SEC rules that include: completing lengthy documentation, submitting detailed information to the SEC and waiting for approval before accepting money from investors.

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