Have crowd-funding laws for filmmakers finally caught up to the promise of the internet?
Well, up to $1,000,000 it has.
Up until now it has been generally illegal to crowdfund filmmaking because films are treated as an investment by the Securities Exchange Commission. So posting an ad on Craigslist was illegal because you were soliciting money for a risk venture (an security), filmmakers often didn’t know how to vet potential investors (taking whatever money they could from whomever made it available), and almost never realized that they were only allowed to solicit investment from a small pool of potential investors. You basically needed to register your security (your high risk film investment fund, which is what it was) with the SEC. But with the new JOBS Act, created to help loosen rules on small business funding, crowdfunding of films is now much easier and legal.
But what about Kickstarter, you ask?
Kickstarter crowdsourced through GIFTS. If you offered return (money) for the investment, it was not allowed.
These new rules on investment should really excite filmmakers!