Written by Michael R. Barnard
FILMMAKERS, IT’S 2013. DO YOU KNOW WHERE YOUR JOBS ACT IS?
Part 2 of 3 parts.
Yesterday, in
Part 1, we looked at the general state of affairs for raising money from investors for your movie, and introduced the JOBS Act for its potential to help rebuild the independent film industry in America.
Offering securities for your film is tightly restricted and regulated by the SEC. For every rule of the SEC that you ignore, your disgruntled investor’s attorneys will accuse you of fraud and deception and other wrongdoing. They will win, and collect good sums of money for their clients.
“If somebody loses their money in a film investment,” says Jeff Steele of Film Closings, “Nine out of ten times, they’re going to sue the producer. That’s how the world works. The difference between being sued by ma and pa investors or Accredited Investors is that Accredited Investors have better lawyers.”
For the definition of “Accredited Investors,” see http://www.sec.gov/info/smallbus/secg/accredited-investor-net-worth-standard-secg.htm
In simple terms – explanations that are more complex require attorneys – the process to raise money for your movie by legally offering securities is referred to generally as a “Private Placement Memorandum,” which usually costs about $15,000 or more in time and fees.
When you have your expensive PPM, what can you do with it?
