Basics
1. What is equity-based crowd funding?
2. Who owns the film and the copyright?
3. Who has creative control?
4. What is the Hatchmeter Criteria?
Filmmakers
5. Is there a set duration for a campaign?
6. How does my film get funded?
7. What are your responsibilities as a filmmaker looking to raise funds through DreameGGs Funding Club?
8. Is there a minimum or maximum budget for my campaign?
9. How is the profit going to be shared among the investors and me?
10. What happens if the film does not make money? Am I financially responsible for paying back the investors?
11. Can I raise funds on multiple platforms such as KickStarter?
12. What if my budget goal is not met?
13. Should I give incentives other than equity to investors?
14. What happens if a filmmaker cannot complete a film as promised?
15. What are the fees that DreameGGs charges for fundraising?
16. What happens if I sell my film to a studio?
Investors
17. Will all projects guarantee a profit?
18. How do the predictions work?
19. What is expected ROI?
20. What do I get in exchange for my investment?
21. How long will I wait until I recoup my investment? What rate of payment will I receive?
22. How can I make sure the movie is going to be made?
23. Will there be a commission fee charged for managing my investment?

Basics

1. What is equity-based crowd funding?  

Equity-based crowd funding is when an investor receives shares of a company, usually in its early stages, in exchange for the money pledged.

There are three other kinds of crowd funding:

Rewards-based crowd funding: backers receive some kind of reward, instead of company shares/equity, in exchange for investing in a product/service launch (Kickstarter is an example of this type of crowd funding).

Donations-based crowd funding: individuals or charities ask for a donation without a return to the backer.

Debt-based crowd funding: lenders provide needed debt financing and the lender receives a debt instrument that pays interest return.

DreameGGs is an equity-based crowd funding platform.

 

2. Who owns the film and the copyright?  

When a film is financed, before receiving funds, filmmakers will start a company in the form of an LLC whose sole purpose is to produce their film and to assign all of the film’s rights to this company, making the company the legal owner of the film’s copyright.

 

3. Who has creative control?  

Our investors join as Limited Partners, which means that they invest money in exchange for equity in the company and the film, but they don’t actively participate in the production. DreameGGs joins as General Partner, and manages the company and the film on behalf of investors, but DreameGGs lets filmmakers have their own creative control.

 

4. What is the Hatchmeter Criteria?  

The Hatchmeter responds to the social media activity information of each project. The larger the fan base of a film, the higher its Hatchmeter will be. Facebook, Twitter, and YouTube are social media sites that will impact the Hatchmeter the most.

 

Filmmakers

5. Is there a set duration for a campaign?  

During the Incubating stage when a film is growing its fan base in order to unlock the Hatchmeter and to proceed to the Hatching stage, there is no fixed duration or time limit. During the Hatching stage however, in the event that a film is partially financed through DreameGGs, there will be a 6-month time limit for filmmakers to secure third-party investments.

 

6. How does my film get funded?  

There are two ways your film may receive funding:

  • Increase your social media attention. The Hatchmeter will automatically keep track of your social media interactions. Once the Hatchmeter reaches 100%, your film will be unlocked and proceed to the Hatching stage where investors will be invited to finance your film.
  • If one of our investors wants to lead and invest in your film before the Hatchmeter reaches 100%, your film will immediately go to the Hatching stage.

 

7. What are your responsibilities as a filmmaker looking to raise funds through DreameGGs Funding Club?  

Grow your fan base on social media. Promote your film through DreameGGs Funding Club. Provide pitch packet, treatment and all development materials available, including but not limited to: back stories, picture or text references, concept designs, storyboards, video teasers/trailers, etc. A full screen play may be needed per request from individual investors. Once the film is funded, you are responsible for pre-production, production, post-production, and delivery on schedule and within the budget.

 

8. Is there a minimum or maximum budget for my campaign?  

The budget of a film you look to raise funds for depends entirely on you. However, the larger budget for your project, the larger the market potential you must show through the Hatchmeter. You must also have a reasonable budget that will pass the assessment conducted by the completion bond company before you can receive the funds raised.

 

9. How is the profit going to be shared among the investors and me?  

After the investors recoup the investment plus interest (refer to question No.22), the profit sharing will be based on the percentage of equity owned by all parties of the film’s company.

 

10. What happens if the film does not make money? Am I financially responsible for paying back the investors?  

You are not personally liable for paying back the investors. But before you could receive any revenue made from the film, investors will recoup their initial investment plus interest (refer to question No.22).

 

11. Can I raise funds on multiple platforms such as KickStarter?  

Yes. You are encouraged to show initial funds raised from other platforms.

 

12. What if my budget goal is not met?  

In the event that a film is not fully funded, but DreameGGs has received funds transferred from investors, DreameGGs will freeze the account for the filmmaker to secure the remaining funds needed. If the filmmaker fails to secure the remaining budget needed within 3 months, all the funds that have been raised through the platform will be returned to investors.

 

13. Should I give incentives other than equity to investors?  

Producer credits, opportunities to attend a premiere, a role or other types of perks are highly recommended.

 

14. What happens if a filmmaker cannot complete a film as promised?  

It’s a filmmaker’s responsibility to complete his/her film, but a completion bond company will be hired. Since the completion bond company is financially liable for the film completion and delivery, it works with you throughout the production to ensure that the film is on schedules and within the budget. The bond fee is typically 3-5% of the budget depending on the risks as assessed by the completion company. You should include the fee in your budget proposal.

 

15. What are the fees that DreameGGs charges for fundraising?  

DreameGGs takes 5% commission from the funds raised through DreameGGs Funding Club. You should include this in your budget proposal.

 

16. What happens if I sell my film to a studio?  

If you did not enter into an agreement with DreameGGs to receive funds, then DreameGGs will take no commission unless the studio will continue to finance the film through the DreameGGs platform.

If you did enter into an agreement with DreameGGs to receive funds, then the studio will be responsible for ensuring the investors are paid according to the percentage of their shares plus interest. This arrangement must be formally agreed to before DreameGGs will release the film for the sale.

 

Investors

17. Will all projects guarantee a profit?  

No, but our statistical algorithm based on our big data analysis can predict a film’s profitability. It is an effective tool that can effectively eliminate the films with poor market potential and point out the films with high profitability.

 

18. How do the predictions work?  

Our internal research has demonstrated a strong relationship between social media buzz and a film’s profitability. Based on this information as well as other data, we have developed an internal algorithm, integrated in the Hatchmeter, that can predict the lifetime global box office for each film.

 

19. What is expected ROI?  

Expected ROI varies from film to film, but the films that we recommend are the ones that have already demonstrated strong market potential with higher ROI.

 

20. What do I get in exchange for my investment?  

You will receive up to 50% of shares of the company that owns the copyright of the film and the film itself. The percentage that you own is based on your capital contribution to the film. When the film is released, the profit sharing will be based on this percentage. Before any profit sharing occurs, you as a limited partner will be the first to recoup your initial investment plus interest.

 

21. How long will I wait until I recoup my investment? What rate of payment will I receive?  

Before any profit sharing occurs, you will recoup your initial investment plus a premium (typically between 15% and 25%), depending on the offer by the production company. 

After you have recouped the investment plus the premium, the profit sharing will be based on the percentage of equity owned by all parties of the film’s company. 

All movies in “Hatching” stage will present the investment offer details, but only the “Verified Accredited Investors” have access to those details. To become a verified accredited investor, click any movies in “Hatching”, or click your profile picture on top, select “My Profile”, then click “Verify My Profile”, from there simply follow the instructions to complete the verification process.

 

22. How can I make sure the movie is going to be made?  

A completion bond company will be hired. They will be financially liable and will make sure the production is on schedule and within the budget.

 

23. Will there be a commission fee charged for managing my investment?  

A 10% management fee will be charged from the profit and premium we collect for you, after you have fully recovered your initial investment.

 

 

For more information or referral to a law firm to advise on starting an LLC, please contact: info@dreameggsfc.com