Kickstarter for the rich and famous? New crowdfunding site offers the chance to back Hollywood movies - but only for people with a net worth of at least $1m
San Francisco based Junction is running a campaign to fund movies starring Kate Winslet and Tom Hanks
Thursday 27 March 2014
Hollywood is joining the crowdfunding movement. A new start-up is offering film fans the chance to invest in big name films, such as Triple Nine starring Kate Winslet. But there’s a catch - you have to be (very) wealthy to be able to join in the fun.
Junction, the new crowdfunding company based in San Francisco, was founded by Brian Goldsmith and former Goldman Sachs banker Adam Kaufman. Unlike crowdfunding sites such as Kickstarter and Indiegogo, where the funds raised could make or break the projects seeking backing, Junction will be supporting films that already have all their necessary funds in place. Any novice online investors will be investing alongside those in the know, and will get the same terms as the original backers.
"Investors aren't being asked to put money into projects that more experienced financiers have already passed on. Experienced investors already have skin in the game, " Goldsmith explained.
If the money raised on Junction isn’t essential to the making of the film, where will it go? The plan is for the extra cash to provide a safety net and help the original financiers recoup their investments.
Another major difference with sites such as Kickstarter is the minimum investment required. Rather than contributing a couple of pounds in return for a signed mug, investors at Junction have to prove their worth to be at least $1 million (£600,000) or be earning over $200,000 a year.
Those who fulfil these criteria can now opt to back Junction’s first project, A Hologram for the King. This adaptation of the Dave Eggers novel is set to star Tom Hanks and will be directed by Tom Tykwer. Next on the horizon for aspiring investors is Triple Nine, a thriller featuring Kate Winslet and Chiwetel Ejiofor of 12 Years a Slave fame.
Crowdfunding is becoming an increasingly important way of funding film projects. The filmVeronica Mars, following on from the series of the same name, was made with $5.7 million raised through fans on Kickstarter. But the format has received criticism due to the fact that producers are not obliged to reward their investors if the project makes a profit. Investment schemes such as Junction, on the other hand, are set up as a money-making opportunity for those lending their financial support.
This new formula has been made possible by the 2012 JOBS Act (Jumpstart Our Business Startups Act), designed to encourage funding of small businesses in the United States. Kaufman and Goldsmith believe that the same set-up could work in other areas of the entertainment industry.
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