Slated: A New Way of Connecting Indie Filmmakers with Financing?
As reported in an October 10th, 2012 Wall Street Journal article, a website launched in early 2012, Slated.com, is being positioned as a "more exclusive and professional" source of online production financing.
Think Kickstarter behind a velvet rope.
Besides exclusivity, what's the key difference between Slated.com and all the other existing online crowd funding sites?
Return on investment.
Kickstarter and IndieGoGo backers can't (under the current law) receive a profit, while Slated’s investors can get a financial return if the film they back is profitable.
The chance of entering a "commercial relationship with the film’s producing team” - in other words, the traditional I'll-give-you-money-for-your-high-risk-movie-if-you-promise-to-put-my-name-in-lights- AND-a-chance-at-an-outsize-financial-return relationship that existed before the internet - has made the roll-out of Slated.com something Old World Hollywood types are watching with considerable interest.
Will indie films - targeted at a niche audience - prosper again when well-heeled movie investors are given a chance to become even richer if they choose well?
And is Slated.com the tool that will make those online marriages between rich investors and poor filmmakers possible?
If you ask Old World Hollywood executives about Slated.com, the enthusiasts will tell you they like the exclusivity of the site. Filmmakers and investors are pre-screened. To get onto the site both potential investors and filmmakers must impress the founders of Slated.com. Then, and only then, will the filmmakers get access to the monied movie fans and then, and only then, will potential investors get the chance to see a financial return on their investments (not just a signed DVD or a t-shirt, which are typical of the returns offered by most filmmakers on Kickstarter and IndieGoGo).
Launched at 2012's Sundance Film Festival by Stephan Paternot (Slated’s Chairman, co-founder and one of its initial investors) and CEO Duncan Cork, Slated.com claims to have already funded film projects ranging between $300,000 to $5 million, with the size of individual investments typically falling somewhere between $10,000- $500,000.
How does the site verify the legitimacy of the investors?As Duncan Cork told the Wall Street Journal: “'All members have either been invited in by the team or have had at least two existing members verify their profile...' [Then] once members are included on the site, they must self-certify their own accreditation, according to SEC definitions. The Slated team then reviews each application and contacts the investor directly to ensure they are legitimate."
How does Slated.com make money on these deals?
Unlike Kickstarter and IndieGoGo, Slated.com currently doesn’t take a percentage of the money raised. But, once they have a track record and a list of investors, that will likely change. Like their pool of investors, the founders of Slated.com didn't get into this just for the art.
UPDATE: August 22, 2013 On Aug. 4th, 2013 The New York Times published an article about Slated: "Each film project listed on Slated is packaged for investors. It must have a director, a producer, a writer and principal cast to be considered. The budget requirements for a feature film are $500,000 to $15 million; for a documentary, $250,000 to $2 million. Slated restricts its membership to investors who meet the Securities and Exchange Commission requirements for accreditation — a net worth of $1 million or annual income of at least $200,000 for an individual and $300,000 for a household for the last two years. The filmmakers and financiers negotiate the terms of the deals on their own, without Slated’s involvement. Since the company’s introduction in January 2012, nine films listed on the site have received financing. According to Mr. Cork and Mr. Paternot, investors in recent projects have committed amounts from $25,000 to several million dollars."