Cashing in the crowds
As crowd-funding gains popularity in India, investors and creators hope the market is regularised to ensure fly-by-night ventures are weeded out.bollywood Updated: Apr 25, 2012 15:47 IST
Director Onir has gone on record several times saying, “crowd-funding (for I Am, 2011) was more of a necessity than a deliberate decision”. His National Award-winning film was co-produced by over 400 people from 46 cities across the world and managed to raise nearly Rs 10 million. Today, it is considered India’s largest crowd-funded film.
Similarly, when despite winning the co-production challenge at MIPDOC at Cannes 2010, the documentary titled The Rat Race didn’t attract enough funding to see its completion, director Miriam Chandy Menacherry went online to ask for money. The documentary was taken to Cannes in 2011 and on April 20 made its big screen debut in India. Yet, despite these success stories, crowd-funding in India still remains unregulated. And though a recent bill in the US allows start-ups to offer securities via crowd-funding sites and social networks, in India it is still in a nascent stage with no accountabilty or structure.
“Crowd-funding is a different game. Though not illegal, it also isn’t defined. The rules are dependent on a contract and change from deal to deal,” says Sanjay Suri, who co-produced I Am. For people investing in his film, it was less about making profits and more about identifying with the film’s issues. Yet everyone who contributed had to sign a waiver stating they had no rights over its creativity. The actor adds that if a proper structure were introduced, it would make funding easier for both the creator and investor.
Miriam agrees that the current situation is complicated. She says, “It works if you are taking small amounts and keep the rules simple. People donating funds want to be associated with the end product, but don’t do it for money. So we offer them credit, either in the end credits or in the promotional material.” Her docu’s ‘co-producers’ got passes to the launch party, their names listed on Facebook and end credits as ‘valued partner’. But Miriam adds that a formal structure would protect people from fly-by-night operations.
This is where credibility comes in. Both Sanjay and Miriam agree that their past body of work meant there was some surety that the film or documentary would be released. And their investors know their money was put to good use.
Others gain credibility via crowd-funding websites like Kickstarter or Quirky who review ventures. “But there is some confusion. I tried to put my start-up for review, but you need to know a permanent US resident with a social security number, a US bank account, address, state-issued ID (driver’s license), and major credit or debit card to register,” says Kiran Shah, who wanted to put up an art project for review on Kickstarter.
And where does the law stand? “The concept of crowd-funding currently lacks definition. If it is in the form of a contribution or donations, as a large part of crowd-funding tends to be, then there is no law per se in India. In such a case, there is no obligation to return the monies,” says V Umakanth, assistant professor of law, National University of Singapore.
How did you find out about Onir’s I Am?
I follow Onir. I know when his next project is coming up.
What motivated you to contribute to this project?
I trust Onir and his way of showing the worst and darkest parts of mankind.
How much money did you give?
I am a co-producer. I contributed a bunch of rupees.
Were you asked to sign some sort of a waiver?
We signed something. I remember we did some paperwork nearly a month after I contributed.
Did you expect to get your money back when the film made a profit?
I never focused on profits. I did a good deed.
Was your money returned?
My contribution was paid back in another way.
If getting your money back wasn’t part of the deal, do you wish it had been?
I could have back my money. Co-producers get their money back. But wouldn’t it be better to contribute to a mind-blowing film?
Do you think crowd funding should be legalised in India?
Yes I do. This is the only way wonderful projects will make their way to the celluloid.
—Sonju DiCarmen, co-producer of I Am, reportedly contributed R1.8 lakh