Now, ALL Off-Broadway shows are (or should be) well under $5mm. So, this regulation should be in “play” for any commercial producer looking to crowdfund an Off-Broadway show. Still, I don’t know of anyone who has done it. Yet. See below for why.
2. It ain’t cheap to raise small amounts of money.
In our business, there are a limited # of vendors in each area of expertise. There are 3-4 advertising agencies. 2-3 accounting firms. And there are more, but still a limited number of lawyers.
And our lawyers don’t specialize in this . . . which means you’ll need to hire another attorney who does. And that adds to your budget. And smaller businesses don’t want to add to a budget that they were concerned about raising in the first place.
3. You have to work even harder to raise less money.
I remember a consulting session I had once with a writer who launched a Kickstarter campaign. He wondered why he hadn’t raised all this money in the first five days. When I asked him what he had (added) done to promote it, he said, “Nothing. Don’t people just find it in Kickstarter?”
Like anything, just because you build it, doesn’t mean ANYONE will come. You have to spread the word about your offering. And when you’re raising small amounts of money at a time, you have to spread the word every further. We spent a ton of time and money marketing the Godspell offering. That, plus the press we get (that’s where the SEC got saucy), plus my own network, is what led to a successful raise.
Most people don’t want to work that hard. Because it’s true, it IS easier to raise bigger money from fewer people. (That’s why the point of crowdfunding shouldn’t be to raise the money – it should be to raise a marketing army – because all those investors with skin in the game, will shout your show’s name from their e-rooftops!)
(By the way – I gave Kickstarter guys some marketing nuggets and the good news is – he reached his total with three days to spare.)
Wait. Was that three reasons already? But I’m not done. So here’s a BONUS reason why crowdfunding hasn’t taken off on or Off-Broadway.
4. Producers think it makes them look desperate.
This is the one that we need to get over. By not allowing the small investor to participate in the making of theater, we’re ignoring a huge portion of the theatergoing population. Small donors are what got Barack Obama elected. Small investors are what brought down giant hedge funds with the GameStop saga.
And by embracing small investors, whether through crowdfunding or by Producers dividing up $50,000 units into more reasonable numbers, we could launch more new shows, more new voices . . . and market them as well.