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Just over 24 hours later, Focus Features picked up the North American (and some foreign) distribution rights for Wish I Was Here, for roughly $2.75 million. Traditionally, in the indie film world, that acquisition fee would be used to pay back the budget of the film. According to producer Stacey Sher, however, Wish I Was Here's Kickstarter backers will not see any of the money from the film's sale. "That's not the way Kickstarter works," Sher, a veteran producer behind movies like Get Shorty, Pulp Fiction, Contagion, and Django Unchained, told BuzzFeed via phone. "That's not what we promised anybody."
The reasons Wish I Was Here's Kickstarter backers cannot reap their own financial reward from the film, according to Sher, are tied to the ever-complex world of independent film financing, and the specific obligations created by funding a film via Kickstarter. Sher said the film's budget ended up running over $5.5 million, and last May, the production took on what's known as a "gap financing" loan to literally fill the $2.5 million gap between the budget and the Kickstarter funds. (Braff also put up an unspecified amount of his own money into Wish I Was Here, which Sher called "a rather large investment.") The pre-Sundance sale of some of the film's foreign distribution rights helped pay for part of the gap financing. But much of that loan, said Sher, was given on the expectation of the post-Sundance sale of the rest of the distribution rights, especially in North America, the biggest territory for most independent film.
Before that can happen, however, Sher said the film's first financial obligation is to fulfill all the rewards the Kickstarter backers were promised when they pledged to support the film. "We have hundreds of thousands of dollars of rewards," said Sher. "We're making T-shirts for 24,000 people. We have posters for thousands of people. We have screenings in 11 cities around the world with meet-and-greets and Q&As, and Zach is flying to every single one of them. That all has to be budgeted as well." That's consistent with Braff's statement in Focus Features' official release announcing its pick up of Wish I Was Here, where he praised the company's "enthusiasm to embrace our Kickstarter backers, while we fulfill our promises and rewards."
In the meantime, however, according to a rep from Kickstarter, it is possible for projects to refund backers' money, minus any fees taken by Kickstarter and its financial intermediaries. Though possible, that is not in the cards for Wish I Was Here's backers. "There's not a refund or anything like that," Sher said.
But Sher also emphasized that, from her vantage point, the film's backers are completely fine with this arrangement. "It was never about investment," she said. "It was a donation with a reward based on their belief in Zach and wanting to see his ability to get his film made. We feel like we're the most grateful people to our backers, and we never stop thinking about them. We talked about them, what their rewards are, what are our obligations in every discussion we had about making a distribution decision. They're really excited. They believed in us when no one else did. They know that we love them. They're ready for the rest of the world to support the film in the way that they did." Sher also noted that the cast and crew worked for union scale, Braff placed his entire fee back into the film, and she and her producing partner Michael Shamberg did not take an upfront fee.
"This is a labor of love," Sher continued. "This is a small movie that we think has the ability to touch a lot of people. I wouldn't change anything because it's been an incredible, extraordinary journey with our backers, and I feel really enriched by having them all in our lives. But it's definitely not the simplest way to make a movie."
Your Business and Occupation (B&O) tax classification is based on the rewards you give your backers. You need to figure out the tax on each donation you receive. The minimum donation amount at each level is considered to be the value of the item. The amounts above the minimum donation are considered to be donations and are not subject to tax. Contact the Department for a ruling if you think a reward should be valued a different way.
By all accounts, the launch of a Veronica Mars film project on Kickstarter last week has been a swift, staggering and somewhat dizzying success. The proposed feature-length adaptation of Rob Thomas' cult-darling TV series rocketed past its crowdfunding goal of $2 million in a roughly 11 hours, and had reached $3.6 million by Monday afternoon. While its circumstances as a preexisting fan favorite and major-studio property make Mars an obvious outlier in the mostly independent realm of creators on Kickstarter, Indiegogo, Seed&Spark and other crowdfunding sites, its success calls attention to one of the oft-overlooked elements of those sites' many runaway hits: How to deliver "rewards" promised to hundreds or thousands of backers for their donations.
From conception to shipping, rewards can and should be awesome. Before you go passing the hat, consider a few dos and don'ts that will help maintain your -- and your backers' -- focus squarely on your creative effort:
Budget for the best-case-scenario: Good news! You've funded your project with $40,000, double your original $20,000 goal. Bad news! Now, in addition to making a movie, you have to deliver two or even three times the expected goodies. One of your most popular rewards packages included a Blu-ray copy, and now you're responsible for authoring, manufacturing, packaging and shipping 600 (or more) Blu-rays of your film -- which hasn't even been made yet, let alone arranged distribution -- to eager backers by an estimated deadline six months away. A guy like Rob Thomas can kick this up the ladder to the Hollywood conglomerate that owns his property. You cannot. Presumptuous as it sounds, anticipate everything for which you might be on the hook when the crowdfunding dust settles, and double it when hammering out your awards structure. And if you don't use the allocated resources for the rewards, then guess what? More money for your project.
Set a best-case-scenario deadline: Backers of hugely successful projects are known for their flexibility, but only because too often, production delays mean they don't have any choice. In crowdfunding as in life, creators owe backers realistic timelines. For me, the most frustrating element of the Veronica Mars project is its absurd one-year window to fund, produce and deliver a major motion picture and all of its ancillary backer rewards. This sets a horrible example for a funding model historically plagued with late, fluid or altogether elusive delivery dates. Furthermore, this all compounds your stress exponentially and unnecessarily. Don't be That Project. Think you'll need 12 months? Give yourself 18. Think you'll need 18? Give yourself 24.
For dramatic features, it costs nothing to factor in personalized character names, walk-ons or cameos. (Just make sure you stipulate to any interested backers that they are responsible for travel.) For documentaries, you can send those aforementioned postcards from the road, offer work-in-progress screenings, or arrange a Skype or FaceTime group meeting with you and a subject. The makers of the buzzy indie doc Bronycon offered to interview two $5,000 backers in their film, while the makers of the "Victorian ghost story puppet film" The Mill at Calder's End will hand off some of the movie's puppets after production. Director Jennifer Fox offered artwork, jewelry and even a Tibetan chest to backers of her film My Reincarnation. If any of this sounds unduly mercenary, then crowdfunding -- hell, filmmaking -- might be the wrong place for you.
Nail a $25 reward: The $25 pledge is generally regarded as the most popular on Kickstarter, Indiegogo and most other crowdfunding sites. It's a modest, low-risk commitment for a backer who's intrigued enough to eventually want to watch your project but not intrigued enough to bid on a speaking part or some other top-shelf perk. Kickstarter success stories from the microbudget feature Paper Dreams to Charlie Kaufman's Anomalisa to the series Tornado Chasers all offered digital downloads of the completed projects at their $20 or $25 price points -- statistically, anyway, the runaway favorites of the rewards offered. The upside is twofold: The more backers you get here, the likelier your campaign is to sustain its visibility among crowdfunding site admins (who can feature you on their home page) and prospective backers alike. Better still, you can allocate more of your revenue to creation and distribution instead of filling time-consuming orders for expensive swag and other gimmicks.
Water down your credits: Pretty much everyone knows that $2,500 won't get you very far in the conventional film world. So why accept that in exchange for producer credit for your crowdfunded project? Whether an associate producer, executive producer, or full-fledged producer-producer title, it's tempting to offer five or six such slots for a couple grand apiece to involve multiple backers and hedge your bets. But doubling the price point and cutting the number of available producer slots gets you more money for less work, plays up the reward's exclusivity, and appeals directly to the well-heeled backer you may already know and who -- let's face it -- doesn't want to pledge thousands of dollars to your project just to share the screen with a half-dozen other names. Use the popularity of your awesome mid-level items to attract two or three key backers for the top-level items.
Overcomplicate: Filmmaking and crowdfunding are both difficult enough without having to chisel the glaze from prospective backers' eyes. If your 16th reward level includes various permutations or packagings of the rewards that precede it, then you're trying too hard. Indiegogo reports that 70% of its successful projects offer between three and eight perks. The best of these are 25-30 words about the rewards in clear, concise English. At the end of the day, it's all variations on an elevator pitch, so keep it simple. "All of the above, plus [insert new reward here]" will do the trick.
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