By Paula Bernstein | Indiewire February 10, 2014 at 3:41PM
Passion First Funding Portal, a new online film financing company,
was recently announced at The Sundance Film Festival. The new portal is one of the first to be formed under the 2012 Jumpstart Our Business Startups Act
(JOBS) which permits general solicitation of accredited investors.
Although Passion First Funding Portal has a web site, it's basically a placeholder until the SEC finalizes the regulations and implements them possibly later this year. The site describes Passion First as "a new and exciting way for experienced
filmmakers and accredited investors to meet and explore the
opportunities for working together." Just how new is it? And how will it work once it officially launches?
"It's really new. The regulations from the SEC at the moment are open
for comment. There are proposed regulations, so we're still looking at
them and trying to figure out how we would build our site to be in
compliance with the existing ones. But once they're finalized, that's
when the real work begins. It's a bit early, but it's exciting. It's the
crowdfunding concept meeting the more traditional financing," Passion First founder, the veteran indie film producer Richard Guay ("True Love," "Kinsey") told Indiewire.
Unlike crowdfunding on sites like Kickstarter or IndieGogo, Passion First projects won't have backers, but rather funders. Financiers will be able to reclaim their investments and receive returns. But Guay said the primary goal of Passion First is to establish a relationship between film projects and possible investors.
"It's a place to introduce investors to projects. There's a vetting process that will happen for the projects. There will be a set of criteria that projects will have to follow. It's not just 'hey, here's a Pdf of the script," said Guay. "The regulations right now allow for accredited and non-accredited investors (as defined by the SEC). My thinking at the moment is that I'm going to stick with accredited, more serious investors. Any of us can go into Kickstarter and donate to a project, but this would be different. Both projects and investors would have to satisfy certain requirements. Then, there's a third party - because the funding portal cannot actually handle investor funds, they would engage a third party, likely a bank, that would actually be holding the funds."
Passion First will, at least initially, only work with experienced filmmakers and will implement an intense selection process to match the filmmakers with appropriate investors. Guay noted that the regulations are generally geared to protecting investors, so that Passion First Funding Portal will do focus on protecting the filmmakers and their intellectual property rights.
"There's certainly no shortage of companies out there who are making films, but this is another place the independent filmmaker can go to look for funding," said Guay who noted that the offers are limited to $1 million so it's the place to fully fund a mini-budget or partially fund a bigger project.
Once the SEC finalizes the proposed regulations, there's no doubt that bigger players will flood the new space. "I'm hoping that what will be unique about Passion First is
that since it was started by someone who has been around for 30 years in the film
world, it will be attractive to filmmakers," said Guay. "The general feeling is the more options, the more things out there, the better. This is just another option for getting your project made."