The current Kickstarter campaign by Scrubs’ Zach Braff, Wish I Was Here, is a rocket success. At the time of writing, it has hit $1.5 million and 20,000 backers. (http://kck.st/11F6V1Z).
They’ve reached their $2 million goal in a month, and it’s great! Great for customers, “friends and family” supporters, and also really great for Mr. Braff, allowing him to keep creative control of his work.
At the same time, though, this approach to fund raising and the JOBS Act create various pros and cons for equity-based crowdsourcing.
The Kickstarter fund raising path is all about promising the customer a product both during and after the path of the project’s development.
The customers of Mr. Braff’s movie get value in a somewhat unconventional fashion but it is value that they willingly accepted, knowing the conditions of the product at the sale. Pledging $5,000 to attend the premiere and have Mr. Braff’s hand on your leg is a steal. Not including the t-shirt, art prints, sound track, weekly playlists, Production diary, and the script.
Purchasing equity, though, you might find yourself being more critical and somewhat more concerned with what Mr. Braff is going to do to manage the money. You start wondering, well, why should there be t-shirts at all? What is Mr. Braff doing at a Premiere, potentially creating a sexual harassment liability? Why is he not working on casting Batman and wowing Asian fans?
Purchase equity and you’ll also have full expectation of transparency and future returns. When there is any deviation from the plan, heads will roll. And that changes the project forever…even when you disclose to shareholders that you are absolutely maintaining complete creative control.
And right now, Mr. Braff certainly does have complete creative control, complete decision-making. It makes all the difference.
Since the passing of the JOBS Act, though, the SEC has been slow to sort out the rules. According to numerous articles (http://politi.co/10fl2Ha), the whole thing is a “giant mess” (actually, those were the words of a congressional aide, which says a lot in itself).
If the current SEC rules can’t spot fiduciary breaches, related party exchanges, or off-shore holdings, with the current regulations and reporting requirements, making crowd-sourcing a part of it, putting it under SEC scrutiny, would truly make an unbearable problem for the agency.
- Zach Braff’s Kickstarter Campaign: Wish We Were There, Too (fugitivecinema.com)
- Zach Braff Charms His Way to $2m on Kickstarter For New Film – Wish I Was Here (contactmusic.com)
- So Zach Braff raised a ton of money for his movie, and of course people on the internet are upset (shortformblog.com)
- More thoughts on why Zach Braff’s Kickstarter doesn’t suck (shortformblog.com)
- Zach Braff Hits $2 million Kickstarter Goal In 4 Days (variety.com)
- Zach Braff Raises $2M on Kickstarter (abcnews.go.com)
- Zach Braff raises over $1m via Kickstarter for new film (guardian.co.uk)
- Please Help Confirmed Rich Person Zach Braff Pay For His New Movie (celebuzz.com)