David Marlett's BlueRun wants to leverage the success of a crowdfunding campaign into money from existing financiers in the indie film community
David Marlett knows how to ask for money. Over the past two decades, the lawyer has raised more than $100 million for oil companies, gas companies and real-estate developers to fund new projects.
Yet while those deals “put bread on the table,” he describes them as his “other life.” He is now dedicating his life to revolutionizing finance in another area — the movie business.
Marlett (at left), an aspiring screenwriter with a pair of small producing credits to his name, has just launched BlueRun Crowdfund — a subsidiary of BlueRun Media, a company he founded to produce film and television projects.
Its goal: to help filmmakers manage their crowdfunding campaigns and get sufficient capital to bring their projects to fruition. For, of course, a fee.
Certainly the timing is right. While BlueRun Media's film and TV projects languish in development, crowdfunding has matured into a viable means of raising money for film projects, evinced by the recent Kickstarter campaign for “Veronica Mars.” That project has raised more than $4 million over the past three weeks, the largest sum that a film project has raised on Kickstarter by far.
“When crowdfunding came along, suddenly both halves of my brain get to co-exist in the same head,” Marlett told TheWrap. “Crowdfunding has matured very rapidly, and it's hard to imagine a better industry suited for crowdfunding than film. But there are two basic ways we can improve it. We can polish their campaign and bring a layer of professionalism.”
And the other?
“One of the keys that made ‘Veronica Mars’ work so well is that, besides its massive following, you had Warner Bros. sitting there silently endorsing it as a distributor. That's a very powerful thing.”
While Marlett charges a small percentage to aid filmmakers in their campaigns, his ambitions are loftier. He wants to leverage the success of a crowdfunding campaign into money from existing financiers in the indie film community.
The hitch there, so far, is that the Securities and Exchange Commission has yet to decide whether crowdfunding investors can use donations to get equity in a project, a provision of the JOBS Act Congress passed last year.
It's one reason why, when “Taxi Driver” screenwriter Paul Schrader and “Community” creator Dan Harmon raised thousands on sites like Kickstarter and Indiegogo, contributors did not receive any financial stake in the projects. They got signed DVDs.
Marlett's approach sidesteps that thorny issue by going to established investors. He believes that once he identifies an existing audience passionate enough to financially support a project, financiers will be more likely to invest as well.
He declined to identify potential financiers because of ongoing negotiations.
“It's a genius move,” Matthew Lillard, an actor who used Kickstarter to fund promotion and distribution of his directorial debut, “Fat Kid Rules the World,” told TheWrap. “If you're a financier, [the crowdfunding] is free capital, free money for the price of a bunch of T-shirts and people being in a movie. “
Lillard also felt the idea would be appealing to filmmakers, who would surrender a piece of the movie to get the money they need to finish a project. “You'd do it in a second because you want to get the movie made.”
At the moment, Lillard is deciding how to fund a sequel to the 1998 cult classic “SLC Punk,” which he starred in and narrated. The filmmakers may go to Kickstarter or IndieGoGo, or they may go to traditional financiers.
Yet just because Lillard thinks Marlett's plans is "a genius move," he isn't ready to sign up.
“It was only a matter of time before a really smart lawyer started to trade on the backs of passion,” he said. “I don't want to be the guy throwing this guy under the bus, but there is something pure about a filmmaker going out, having a creative vision and reaching out into the world to raise money. Now there's a lawyer saying I want 20 percent of that.”
(It should be noted that Marlett only demands five percent — at most).
Lillard's real doubts boiled down to value added. Why does a filmmaker need Marlett to help with his campaign? What will Marlett bring to the table?
Marlett argues that he can help with everything from figuring out a budget to helping with social-media contacts. Most filmmakers, he said, would welcome someone with a great deal of experience in the area.
To that end, he's signed up Andrew Lazar‘s Mad Chance Productions, the company behind “I Love You Phillip Morris” and “Get Smart,” as well as directors like Matt Herron and Peter Bussian.
Various financiers TheWrap spoke with expressed doubts about investing in crowdfunded projects at all. Michael Roban, EVP of film finance at IM Global, noted that most of the crowdfunded projects have miniscule budgets and that his own company was self-sufficient in terms of funding.
Myles Nestel, co-founder and a partner at The Solution Entertainment Group, a film financing and sales company, expressed similar concerns about the size of the projects on the site, but also raised a larger issue.
What happens when a crowdfunded project makes a lot of money?
"I wonder what would happen if a crowdfunding structure raised money for 'Storm' or 'Insidious' or a movie that did $100M at the box office," Nestel told TheWrap.
Will their initial investors, who are rewarded with set visits and a thank you, remain quiet as their money makes other people rich?
Marlett, certain his idea will hold up under legal scrutiny, believes rewarding contributors with "a bottomless swag bag" will help. So will his own background.
“Financing a mall or a shopping center development is amazingly similar to a film,” he said. “There's not a lot I haven't seen.”