Ten days ago I posted a piece on my blog that analyzed the need for an incubator for entertainment start-ups (A version was also posted on Tribeca's Future of Film site and on

The fascinating feedback I received was punctuated all last week by the unfolding of a related drama -- US Senate passage of the JOBS Act (Jump Start Our Business Startups), a law designed to allow start-up businesses to raise investment capital from virtually anyone, unconstrained by most of the current regulations. Efforts like a petition created by Angel List helped corral support. 

The law passed, tweaked with certain safeguards in the crowdfunding provisions. Many consider passage a miracle, given that there was opposition from the Securities and Exchange Commission, public interest groups and others who fear an avalanche of fraud. One observer from within the investment community even called the bill "a train wreck." 

Espect existing crowdfunding sites like CrowdfunderWeFund, Symbid, Peerbackers and Sprowd to pivot their models. Expect an onslaught of new crowdfunding sites. Expect a ripple effect through the start-up and investment ecosystem. 

For instance, raised $2 million in a Series B round just this week. Slated is sort of an Angel List marketplace for film finance, with productions and investors meeting. For now, investors must be "qualified," but with the passage of JOBS Act, it will be interesting to see what happens. 

Some have compared Slated with Kickstarter, which has certainly played the starring role when digerati need to explain how "crowd-based" markets might work. Funds raised for films and other projects on Kickstarter are donations --- no strings attached, especially no equity in the property or company.

The JOBS Act will flip that model on its head, allowing equity to be acquired by a vastly larger body of investors than is currently possible. Even so, Kickstarter is already having a huge impact on film funding, with an estimated 10% of the recent SXSW slate had funding from the site.


Crowdfunding for the equity markets is likely to further stimulate the surge of early stage start-up incubators and accelerators that we have seen in recent years, and will likely morph some models away from focus upon a narrow group of VCs and angel investors. 

Moreover, if a true and open marketplace evolves for broad public investment in start-ups, consumer-facing content start-ups could benefit. "Average" people may find a company producing a digital media property more understandable than a specialized tech startup. 

In which case, an incubator for show biz should be even more desireable a week after I wrote about it!

In the meantime, here are some factoids gleaned in the week since my post went live:

  • A new "start-up academy camp for Media Innovations called "Media Camp," was launched by Turner Broadcasting during SXSW. I spoke with its director, former Apple technologist David Austin, who told me that MC's focus us early-stage tech companies working on problems that would impact the broadcasting business in general, and Turner in specific. The unit is premised on the assumption the start-up and VC culture simply don’t understand the media business – the revenue flow, importance of rights, business models, etc. The accelerator's boot camp helps startups understand the media biz. Applications can be submitted theough April 16 for the summer session. 
  • MovieLabs, the Hollywood-backed R&D center in the Bay Area does not invest in start-ups, but VP Kip Welch told me that they do informally confer with start-ups, investors, incubators and the whole Silicon Valley ecosystem. While a big chunk of the unit's budget is piracy-related, MovieLabs supports standards and research in metadata, identifiers, and other technical issues that make consumer media work better. 
  • New hybrids emerge all the time: for instance the MIT Open Documentary Lab: it seems to be part think tank, and part incubator for filmmakers and hackers. 
  • Not everyone loves the incubator idea: “Most incubators are cultivating a garden of startups that are dead on arrival,” said Kendall Wouters, a Cleveland-based entrepreneur and investor. He suggests that incubators fail to assess the market potential of ideas that entrepreneurs bring to them. As a result, companies won’t make it through the dreaded “valley of death” -- the time it takes to identify a sustainable and repeatable business model. 


Transmedia Hollywood 3 is coming up on April 6 at USC --  organized this year around the topic "Rethinking Creative Relations." I'll be on a panel moderated by Henry Jenkins called "Creative Economies: Commercial vs. State-based Models", along with Morgan Bouchet from France, Sara Diamond from Canada, Christy Dena from Australia, Jose Padhila from Brazil,  

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Reader Comments (1)

Hi Nick, thank you for this market overview and your future predictions. Sprowd will go in public beta next saturday. Our first goal will be to fund ourselves, the Sprowd way. From then, everyone who invests becomes a believer and will co-benefit financially when Sprowd becomes a success.

Please visit us again soon. We'd love to hear your thoughts about our platform.

All the best,

The Sprowd team

Wed, March 28, 2012 at 2:18 PM | Unregistered CommenterThijs Geerdink

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