Firms that raised equity financing via crowdfunding are now maturing. Early stage ideas now have business plans, customers, and financials. Many early equity crowdfunding campaigns are tangible and succeeding – some of the most promising early-stage firms starting up in the United States today.

A high-profile campaign is Legion M. Legion M raised more than $5 Million from more than 10,000 investors across multiple funding rounds.

Equity crowdfunding is more than startup capital for Legion M, it is core to their business model.

Recognizing the long development cycle of film, TV, and VR, Legion M uses equity crowdfunding to finance an ongoing stream of projects or invest in larger film productions. The firm invested in high profile projects with known actors, producers, directors, and writers such as:

  • Kevin Smith’s Jay and Silent Bob Reboot.
  • Mandy starring Nicolas Cage.
  • Colossal Starring Anne Hathaway and Jason Sudeikis.
  • Bad Samaritan starring David Tennant.

Fast work in three years.

Legion M offers access to shareholders that can include in-person and online events. Shareholders also volunteer for the firm holding local meetings, operating online forums, and acting as a focus group to vet pitches.

Source

Legion M’s Fundraising and Current Investments

Legion M secured a pre-seed round from accredited investors before they launched their equity crowdfunding campaign. They raised 400K, which provided adequate resources to launch their crowdfunding campaign. Their first campaign raised over 1 Million USD.

Legion M quickly mobilized thousands of investors and executed on their operations primarily to finance and commercialize film, TV, and VR projects.

According to financial statements for the fiscal year 2017, Legion M provided partial financing for several films and began development on longer term TV and VR projects. We are beginning to see evidence of their performance:

Project Release Budget Box Office / Other Sales Source
Mandy 9/14/18 $6,000,000 $3,700,000 Source
Colossal 4/27/2017 $15,000,000 $4,700,000 Source
Bad Samaritan 5/4/2018 4,300,000 $4,430,000 Source | Source
Jay and Silent Bob Reboot 2019 ~$9,000,000 N/A Source

The film industry is uncertain. Film operates much like Venture Capital. Financiers place reasonable bets knowing that many ventures might fail. One successful venture can generate enough return for an entire portfolio of investments.

Legion M leveraged strong industry connections to invest in films that were critically well-received but underperformed financially. Not unusual for the film industry. Jay and Silent Bob’s Reboot is arguably the strongest film in the firm’s portfolio, which is yet to be released.  

Legion M is in post-development of a virtual reality series called Icons: Face to Face. The show features filmmakers interviewing filmmakers, but in VR. Fans can “be in the room” of their icon. The series shot one episode starring Stan Lee and Kevin Smith.

Legion M does not release financials for each project or film investment. However, expenses are published via the firm’s Annual Report. The firm’s largest expenses relate to executive compensation and marketing.

There are a couple of key questions about Legion M:

  • Does the firm have enough capital to finish independent TV and VR projects?
  • Is the investment into the Jay and Silent Bob Reboot enough to overcome losses incurred on other titles?

Pushing the Envelope

Legion M will likely continue to fundraise their way to sustainability. The firm should communicate with investors the upside to investments so that investors know if future capital raises can overcome current debt.

The Legion M model might work. After all, the firm invests in projects that receive positive reviews and include talented casts. Icons could lead in VR entertainment.

As one of the highest profile and earliest campaigns to launch, Legion M pioneered equity crowdfunding. The firm will continue to push the envelope to how much capital a firm can raise via the crowd to prove commercial viability.

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