President Obama has signed the Jumpstart Our Business Startups (JOBS) Act, laws making it easier for startup firms to raise capital. The act will allow small businesses, such as production companies, to take part in internet “crowd funding,” raising capital by soliciting investments from others online. Unlike kickstarter.com, which permits filmmakers to seek donations and gifts, the JOBS Act allows them to raise up to $1 million in equity investments from the general public without following current security regulations. Filmmakers have found it difficult to finance projects in both public and private offerings: Public offerings require SEC approval and the registration can be tedious and expensive (costing hundreds of thousands of dollars); private offerings, which generally prohibit advertising, are less pricey, though crafting a Private Placement Memorandum can still exceed $25,000. Entertainment law blogger Mark Litwak’s offers his take on the JOBS Act here.
JOBS Act offers filmmakers financing options
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