08 Jul CROWDFUNDING IN CHINA?
Where does a filmmaker look for investors? Besides your friendly banker and rich relatives – another option is crowdfunding.
What is crowdfunding? It is the process of funding a venture or project by raising small amounts of money from a large number of people – typically via the internet.
What are the different types of crowdfunding?
The article “Crowdfunding in China: Overcoming the Differences to Access a Unique Market” reported that “The most common forms of crowdfunding are: Equity-based crowd funding, Reward-based crowdfunding, Debt-based crowdfunding (peer-to-peer lending) and Donation-based crowdfunding.
How is crowdfunding in China different from the United States?
The article “China’s Crowdfunding Witnessing a Boom” stated that “Unlike its US counterparts, the Chinese crowdfunding industry is dominated by major e-retailers, such as JD.com, Alibaba and Suning, who can take advantage of their huge consumer bases.”
Additionally, the article “The Growing Potential of Crowdfunding in China” stated that “Chinese crowdfunding platforms, more so than their counterparts in the West, offer more tangible rewards for their contributors.”
In the article “Crowdfunding in China: Overcoming the Differences to Access a Unique Market” it reported that “There is a difference in regulations and investment culture…In China, there are essentially no regulations or oversight agencies that vet crowdfunding ventures.”
The author delineates the main differences between the U.S. and Chinese crowdfunding.
Half of China’s population is online and most have smartphones (almost 700 million people). That’s a huge incentive for film-makers looking to tap into China’s huge crowdfunding pool.
But where to begin?
First – who are the major players?
- ALIBABA: Its e-commerce site – TAOBAO launched a crowdfunding site – YULEBAO where investors can support domestically produced films.
- JD.com: Another large e-commerce site launched its own crowdfunding platform called Coufenzi as well as JD Equity. Crowdfunding.
- BAIDU CROWDFUNDING: and TENCENT SUCCOR (aka Tengxun Lejuan) are other big players in the crowdfunding space.
In the article TOP 7 CHINESE CROWDFUNDING SITES – the author lists the following sites:
Demohour. One of the biggest they self-proclaim) In China.
- AngelCrunch: Connects entrepreneurs with angel investors – and potential funding.
- Dreamore: Is an all or nothing crowdfunding model.
- Fundator: Is another all or nothing crowdfunding model. (This site is also in English).
- Musikid – music related projects. Offers a Fixed or flexible crowdfunding model.
- CTQuan: equity crowdfunding platform
- ZhongChou: Is a rewards based platform.
Tao Meng: Is an online crowdfunding site too fund amateur filmmakers, recruit crew and feed their movie making dreams.
Fringebacker. This is a bi-lingual crowdfunding Hong Kong platform dedicated to artistic projects whether in film, music, performance or technology.
Furthermore, the best reason to consider crowdfunding is that Chinese investors are actively looking for great projects. The article “The Growing Potential of Crowdfunding in China” also reported that “Chinese investors are actively on the hunt for attractive investment projects to place their money – about US$4.6 trillion worth. At the same time, startups and entrepreneurs have difficulties accessing loans, both from commercial banks and institutional investors, and a low percentage of all bank loans are directed towards them.”
Despite many success stories – there has also been fraud and Ponzi schemes. Additionally, China has weak IP laws with the potential for IP theft. The China Securities Regulatory Commission (CSRC) in August 2016 announced Crowdfunding’s first official rules and that crowdfunding will be subject to more specific regulatory requirements.
BETTER TOGETHER – The best of both worlds would be to connect with a partner in China and launch your crowdfunding projects together. Tapping into China’s immense online audience could be the step to getting your own greenlight.
Would you be willing to crowdfund in China? Why or why not? Please leave a reply in the comments.