First comes Streaming, then comes Crowdfunding, then comes Kenny cooing like a baby in a baby carriage.
What a week Broadway is having! It’s like innovation week here on the Great White Way.
Yesterday I e-talked about the two positive steps forward we’ve taken in the streaming race, and today there is some news out of Washington that will eventually trickle down and affect us all.
Crowdfunding, like streaming, is another one of those subjects that I’m uber-fond of, mostly because of how I raised money for Godspell back in the day by day. In order to raise that $5mm, we used an antiquated regulation known as Reg A, which has since been revised, thanks to one of the few bipartisan bills passed in the last decade, the JOBS Act. The JOBS Act had a number of provisions, including the revision of Reg A, the removal of the general solicitation rules, and what everyone has been waiting for (especially you readers out there based on the # of emails I get about this subject), the legalization of for-profit crowdfunding.
So in typical government fashion, they revised Reg A and removed the solicitation rules, but they’ve sat on the crowdfunding and have failed to write the rules and regulations that would allow it to be used.
But they couldn’t wait forever.
This Friday, the SEC will vote to finalize the rules on “Title III” of the JOBS Act, which will finally allow crowdfunding for non-accredited investors (click that link for a definition of what that is). And from everything I’m reading, it’s expected to get a go-go-gadget yes vote.
Then what happens?
Well, don’t go raising money for your show from any Tom, Dick or Harriet just yet. The vote will approve a set of rules for crowdfunding. Those rules will mostly apply to the portals that the JOBS Act insisted must be set up to accept these investments (3rd party portals at that – so there is a intermediary between investor and raiser). Once the rules have an effective date (and I’ve heard everything from 60 days from the yes vote to 360 days from the yes vote) then you’ll start to see these portals pop up and start accepting money.
How will this affect Broadway?
Eh. Early assessments are that this may have zero effect on Broadway shows, since we already know there is a cap of only $1mm that can be raised through this method. Find me a Broadway show that costs $1mm these days, and I’ll find you a room at Bellevue because you’re living in the 50s, my friend. That said, once these rules are published and revealed, maybe there will be a few workarounds. Who knows?
But Off Broadway?
I’ve blogged about this before, but this is where we could see an immediate and important impact. And frankly, this is exactly why JOBS was enacted . . . to jump start small businesses. Off Broadway is the small business of the theater industry, and JOBS could play a big role in helping revitalize this beaten up little brother of Broadway.
So if you’re looking to raise money for your Off Broadway show in the coming years, you might just have an easier way to do it than ever before.
Man, streaming, crowdfunding, what’s next . . . plenty of bathrooms?
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