Crowd-funded film, The Patriarch, extends investment deadline
By Suze Metherell
Sept. 22 (BusinessDesk) - The backers of 'The Patriarch', a film to be directed by Lee Tamahori, have extended the
equity crowd funding deadline by two weeks to raise a minimum of $300,000 of the movie's total $9.4 million budget.
The film, based on 'Whale Rider' author Witi Ihimaera's novel 'Bulibasha', is looking to raise between $300,000 and
$500,000 from New Zealand investors through the online equity crowd funding platform, Snowball Effect. The offer had
originally been scheduled to close at the end of September, but will now close on Oct. 15, according to Snowball's
website. Under the platform's rules, if the project doesn't meet its minimum target it gets no funding, but offerors are
able to extend their deadline in agreement with the platform.
Since the offer was launched on Sept. 2, investment vehicle Patriarch Investment Co has raised $191,000, or 64 percent
of its minimum target and 38.2 percent of its maximum, from 103 investors, who have invested in non-voting 'preferred'
shares at $1 each. The minimum investment is $100. 'Pre-committed' investors have put $1.15 million into the investment
vehicle and if the film is successful, they and preferred shareholders will recoup their investment plus 20 percent,
once distributors are paid.
The Patriarch's progress compares to Snowball's only other offer, the Blenheim boutique brewer, Renaissance, which
raised $700,000 of new capital from 287 investors in one and a half weeks, a quarter of the time the offer was open to
investors to commit funds. Shares were offered with a $500 minimum investment at $2 apiece for 12.28 percent of the
Renaissance.
"Money comes in every day," Robin Scholes, 'The Patriarch' producer, told BusinessDesk. "There's no big dramatic inflow
like there was with the Renaissance one, I think they had some big numbers part way through. Ours is more small numbers
but regularly."
Scholes said she wasn't comparing The Patriarch's funding to Renaissance's quick success, as she had no precedent on
which to base the cash inflow from equity crowd funding and valuing a film was different to valuing a brewery. She was
confident the project would meet the $300,000 minimum with the extended deadline, which arose because of timing issues
with another investor.
The project is hoping to lure investors after Tamahori's success with his first, and to date, only New Zealand film,
'Once Were Warriors'. Filmed on a $2 million budget in 1994, it went on to return $6.5 million to New Zealand investors,
the offer says.
According to the offer documents the film's total budget is $9.4 million. The majority of funding for the film comes
from the government, with The New Zealand Film Commission pitching in $2 million and New Zealand on Air contributing
$400,000. The film also has secured a $3.52 million government rebate from the New Zealand Screen Production Incentive,
to be paid once the film is finished.
On a pessimistic outlook, 'The Patriarch' forecasts $2.32 million in sales, which after distribution costs and various
expenses would leave $1.66 million for investors, a return of 19 percent above the preferred equity investors' original
investment. On a 'realistic' outlook, the film would make $6.2 million in sales, with $3.2 million available to
preferred equity holders, a 94 percent gain on their investment, the offer touts.
Returns to investors are calculated on the basis of total sales rather than sales after cost of production, and
preferred shareholders are at the front of the queue for repayment to investors, although distributors who are
responsible for its local and offshore marketing will be paid before investors.
Snowball gets a fee of up to 6 percent of the total raised across its platform, provided the funding target is met. In
an email, the platform said it was under no obligation to advise investors the offer timeline had been extended. It
flags possible changes to deadlines on the offer page.
(BusinessDesk)