It’s too early to tell if movie crowdfunding just got a platinum card membership level or if serious investors now have a new way to potentially reap the rewards of a hit pic but Junction Investments is looking to evolve at least one of those business models. With Midas touch producer Jason Blum and casino king Steve Wynn on board as advisors and the Tom Hanks-starrer A Hologram For The King as its first offering, the San Francisco-based members only investment start-up launched today. The basic idea is that big-ticket investors will get “the chance to invest in fully-financed movies, film projects that will get made regardless of whether Junction participates,” according to Junction. In the case of Hologram, financier Silver Reel Entertainment are offering a piece of their deal in the big screen adaptation of the Dave Eggers novel via Junction’s online platform to outsider investors.
Unlike Kickstarter or Indiegogo, the upmarket oriented Junction isn’t about getting the pics off the ground at all. Instead it aims to allow original investors to offer Junction investors a portion of what they put into a particular film. The real selling point here is the access and that the new Hollywood newbie investors get the same terms as the original investors. Which means, unlike more wide spread reward or credit granting crowdfunded movies like the Zach Braff-directed Wish I Was Here or the recently released Veronica Mars, backers who get onboard a film via Junction make cash if the movie makes money.
The approach may be a bit more finessed from traditional populist crowdfunding but the idea isn’t anything new. For one thing, this sort of thing has been going on offline for years. Secondly, Passion First Funding, who I wrote about in January, has a similar crowdfunding plan. Which makes sense because like Passion First, Junction’s born out of the 2012 Jumpstart Our Business Startups Act. The still evolving legislation permits general solicitation of accredited investors with an annual income of $200,000 and a net worth of over $1 million, not including their house. Of course, the real proof is in the payout and, in the digital world or the more traditional realm, that takes a while to determine if it works out.
The start-up was founded in 2012 by former Goldman Sachs banker Adam Kaufman and former CBS News producer Brian Goldsmith, which is why the company got a shout-out today on Twitter from the latter’s former boss Katie Couric after the New York Times wrote about them. “Because of our partnerships, we can provide access to a caliber of deals that have never before been seen on the Internet,” says Kaufman and Goldsmith. Besides, Silver Reel, Worldview Entertainment, who are financing Triple Nine that Open Road picked up the rights to last month, has also penned a deals with Junction. After Hologram, the John Hillcoat-directed thriller is set to be the next pic Junction will offer up. QED International Endgame Entertainment and PalmStar are also working with the company.