Investing vs Crowdfunding & why I chose the latter for a/b studios
tl;dr—My experience is primarily in entrepreneurial investing, but for Lavender Fields Forever, crowdfunding made the most sense. My logic is: Before I take an investment ina/b studios, I want to prove there’s something worth investing in.
No type of fundraising is easy. In both investing and crowdfunding, you’re doing everything you can to convince people to part with money, knowing that if you don’t raise a certain amount, the whole effort is for naught. Because if the vision you’re raising for costs a certain amount and you only raise a portion, you can’t deliver on the promise of the raise. There’s a little wiggle room, but it’s usually an “all or nothing” scenario (though you can ask investors for more money).
I’ll keep these explanations brief, as I know many of y’all are familiar with one or both types of fundraising mentioned here. Indulge me in some external processing as I lay out what each of these terms means to a/b studios? I’m adding visuals in case you’re like me, and blocks of text don’t translate well in the imagination.
Typically, investing in a company implies the entrepreneur relinquishing equity (percentage ownership of their company) to the investor, who sees enough potential for return (share of business profits) to take the risk of “buying in.” Investing in startups is typically organized into “rounds,” and for the sake of a/b studios, we’re looking at an “Angel” round, typically $100k - $350k.
Angel investors take a big risk, sometimes investing pre-revenue because they believe the entrepreneur (in this case, me, Amelia) can deliver on their projections.
Crowdfunding, on the other hand, is much of what startup investing is not. It rarely results in equity for the person providing funding. Money is raised through “campaigns,” and individuals “contribute” rather than invest. Their contributions usually range from $25 - $2,500, and in many cases, “incentives” are provided as a thank you as opposed to a return.
This DM I received from a local creative who contributed to the Lavender Fields Forever crowdfunding campaign sums it up better than I ever could:
When you contribute to a crowdfunding campaign, you’re chipping in alongside many others to help someone you know or simply believe in to pursue a vision they’ve laid out in a campaign. You hope they’ll be successful, but you also know that what you get in return is what contribution means to you.
So, why try to raise $10,000 when I could try to raise $100,000?
I’ll repeat myself from the tl;dr —
I want to prove I have something worth investing in.
Remember the pitch decks I mentioned? I’ve seen enough to believe that plenty of people can put together (or acquire) a pitch deck that tells a compelling story. But there’s something much more valuable that, when done well, can deliver the credibility an entrepreneur needs to prove their potential to investors.
A prototype.
I wrote about “what this production company actually does” previously. To sum it up, a/b studios makes movies, and the majority of making a movie happens long before and long after the cameras roll. But the product we make as a business is the movie.
For all in tents and porpoises, a/b studios has not yet made a movie. The last eight months of effort feel in contrast to that statement, but the market has no idea if I’m a good writer & director, if my team are good producers, and if we have what it takes to deliver on our projections.
It’s a big risk to go this long creating a company without income, paying a team without revenue, and asking literally everyone we know to contribute to our vision for a prototype. But, if I’m going to ask investors to take a risk on me in the future, I’m going to take that risk first.
Here’s an example of projections telling a story:
a/b studios chose to crowdfund a $13k proof-of-concept short film because it directly supports the vision of the Lavender Fields Forever feature film, an asset with a $2.5 - $4.5m budget the potential to earn $5m - $25m in revenue within a 2 - 3 year window.
Investors may look at a/b studios and think, “I don’t want to just give money to a crowdfunding campaign, I’m in this to make money.” And that’s fair! When we’re in a position to provide equity in exchange for capital, we’ll be well on the pathway to making money, too. At our Prototype stage, we’re looking for a different kind of partner.
Remember that DM I shared above? That’s the vibe.
It’s not about how much someone can contribute to our crowdfunding campaign, but how much it means to them to support women filmmakers, neurodiverse creatives, and the prospect of realizing a dream.
At the time of writing, we’re just over $2,000 away from the “greenlight,” the financial milestone that unlocks all the pledged funding and guarantees we have enough to make our short film.
Many of you have probably received at least one message from me or another a/b studios team member about Lavender Fields Forever. You might have seen an uptick in social content or articles about a/b studios featured in Teknovation, Inside of Knoxville, and live on WATE — Living East Tennessee.
You may be one of the 50+ people who have already contributed and shared this project with your communities. I am so grateful for your belief in this vision!
If you or someone you know would like to talk to me directly about becoming an Associate or Executive producer — a higher financial contribution that gets you directly involved with the production process and a top-of-the-line credit for your IMDb — please reply to this email so we can chat.
I truly can’t thank you enough for being here, for supporting my journey and the a/b studios vision… but I can hopefully make you proud to be a part of Lavender Fields Forever.
