Have you ever wanted to own a movie studio? Think you could make better greenlight decisions than the current production executives? This is your chance. An investment opportunity previously limited to the wealthy is now open to regular, ordinary people thanks to the new JOBS Act (Jumpstart Our Business Startups), signed by President Obama. Protections put in place after the stock market crash of 1929 have been eased to allow people who are not rich to invest in startups. (Remember, though, that those protections are in place because these are risky investments, so read the materials very carefully and speak to your financial advisor.)
At Comic-Con, I spoke with Paul Scanlan and Jeff Annison, co-founders of Legion M, a new movie studio that is sort of halfway between Kickstarter (where people do not invest but essentially contribute or pre-purchase) and a traditional stock-or-bond type of investment (where you risk only what you put in but the return has no limit). Legion M has partnered with people like including Seth Green’s Stoopid Buddy Stoodios, 42 Entertainment, Meltdown Comics and Alamo Drafthouse to create TV shows, films, web content, gaming, virtual reality and more, with the goal of turning the traditional Hollywood model on its head. Legion M is the fastest growing equity crowdfunded company and has more than 1,200 investors and nearly half a million in funding since launching on Wefunder in May.
Annison says, “We’re all in on the JOBS Act. It’s a revolutionary new opportunity. A lot of people look at it as a new way to fund a company, but that’s the tip of the iceberg. The real power of it is when you can have your shareholders, the owners of the company, who are also your fans, your consumer base, your audience. Content is king, but it is also a commodity. There’s more out there than anyone could consume in a hundred lifetimes. So the challenge is the marketing, the exposure, rising above the noise. If we can have a content company that is owned by a legion of fans, and if we can get them financially and emotionally invested in what we are doing, then when the projects come to market we have a built-in competitive advantage.”
“We see it as more than a company. It’s a movement,” said Scanlan. They expect to work on 10 projects at a time. “There are more ways to monetize content than in the past.” They are going to start with lower budget, independent movies but may partner on bigger projects as well. “You’ve got that emotional connection that you get from being a part of something and the financial ownership and rewards,” said Annison. They acknowledge that it’s “high risk/high reward,” but emphasize that there are still controls in place — people who are not wealthy cannot invest more than 10% of their annual salary. But Annison and Scanlan say that they prefer to have many small investors to having a few big ones. And they are very encouraged by the way their shareholders have participated with them and with each other through their Facebook page, and hope they will interact with the content creators as well. “The Legion has a voice in this whole process. Instead of paying scouts to give us feedback, we have our investors, who are even better.”