Tyler Hersko reported on the front page of the business section in yesterday’s Los Angeles Times that, “Leesha Davis, a part-time actress and stuntwoman, has worked around movie sets for years. But she never felt she had a stake in the film business — until now. The 38-year-old Oregon resident recently became an investor in Legion M, a Silicon Valley start-up that bills itself as Hollywood’s first fan-owned entertainment company.
“Shareholders like Davis get to pitch ideas for films or television series and help determine which projects get approved. They also go behind the scenes with Hollywood creators via live streams and online hangouts with directors and cast members and participate in shareholder events and meetings.”
Yesterday’s article explained that, “Until recently, only wealthy individuals — those with incomes of $200,000 or more — could become accredited investors in companies like Legion M. But that has changed thanks to a federal law — the Jumpstart Our Business Startups Act — that has allowed people like Davis to become equity investors in new businesses.”
(Note: For more background on the Jumpstart Our Business Startups Act, see these BartellPowell blog updates from May 12 and May 16.)
The L.A. Times article also noted that, “Crowdfunding isn’t new to entertainment. A number of filmmakers have used sites such as Kickstarter and Indiegogo to finance movies. In return, fans might get T-shirts or DVDs of the film. With Legion M, however, fans can buy a stake in the company’s success — or failure — for $7 a share.”
Hersko added that, “Though Legion M has yet to release a single project, it has already recruited some 2,100 investors. Shareholders are required to buy a minimum of $100 in stock. Under SEC rules, individuals can invest an annual maximum of $2,000, depending on their net worth or income.
“Although Legion M is not a publicly traded company, anyone can buy shares in the company. Once purchased, an investor’s shares are legally locked for a year, after which they can be freely sold. The shares are expected be traded on a formal exchange like other stocks though a central trading platform has yet to be established.”
