Soliciting For Film Funding Using The Internet

June 27, 2009
posted by sheric

I see a lot of filmmakers using social media sites to solicit funds for their projects. The tag lines usually read “Funds needed for film production” or something like this. Did you know that there are a myriad of laws and regulations that must be complied with when someone buys a security (invests) in your project? SEC registration is required, a time consuming and costly option, unless you qualify for an exemption.

Exemptions that are most commonly available to low budget producers of entertainment are covered under SEC Regulation D. These exemptions are intended for private or limited offerings, rather than offers made to the general public. The regulations prohibit the use of advertising in the offer and sale of the securities. Guess what using the internet to solicit funds is considered? Advertising.

I came across an article written by entertainment attorney Gordon Firemark that clarifies this process and why you must be careful in using the internet to attract financing.

Here is the link to his site with the article. It will probably make you think twice before using this method.

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