Wefunder: Forming Fan-Funded Franchises with Legion M
The following article was published by our friends at Wefunder on April 18th following an interview with Legion M cofounders Paul Scanlan and Jeff Annison. Check it out!
By Youree Choi on Apr 18
As you may be aware, we're big fans of the JOBS Act over here at Wefunder.
Through it, we've been able to help raise millions of dollars for brilliant founders, but the power of the JOBS Act goes way beyond raising money. It's a means of building communities around investors who really, really believe in the companies and causes that they are investing in.
Legion M is a fan owned, Stan Lee-approved entertainment company that unites its legion to create amazing content and reshape the entertainment industry that they care deeply about -- and boy, do they do it well.
Paul "Spidey Sense" Scanlan: Emmy winner, 2011 Forbes "Names You Need To Know," and CEO/cofounder of Legion M is particularly enthusiastic about this idea.
"When we unite fans together, we incite an immeasurable power to have the kind of impact that was once exclusively available to the major studios. Our goal with Legion M is to unite one million fans and take over Hollywood. But I mean 'take over' in a nice way, so that we can have an impact. We're not trying to put anyone out of business; we want to add value and attach our built in audience to introduce new ideas and franchises. The industry needs us."
A Built In Audience, You Say?
The entertainment industry is driven by "built in" audiences. Take for example the MCU or Star Wars -- when a new movie from either franchise is released, it is sure to be welcomed by an audience of fans.
In a company like Legion M where fans themselves are the shareholders, they 're not only investing financially in the company, but they are also emotionally invested in the media that they want to see being created. In a way, they will have guided and pre-approved these projects, and therefore enthusiastic to support them by the time they are released. It's an interesting recipe for success, and has worked pretty spectacularly for Legion M thus far; on the evening of this interview, the fan-organized premiere for their film The Field Guide to Evil had already sold out an entire theatre in SF.
Not only that, but they also had fans volunteering to help them set up and man tables at Wondercon in LA, as well as their fan-exclusive screening of Tolkien.
"I feel like we've discovered this perpetual circle of value: We provide something of value to our community, and they're appreciative and grateful for it. But we (Legion M) are appreciative and grateful to them for what they do because they're adding more value to us to allow us to do more things for them."
It's kind of like the Golden Rule: treat others like you would like to be treated. If you want your investors/community to do nice things for you, do nice things for them first.
The Circle in Motion: Legion M Takes Sundance 2019
This year, Legion M didn't have a film to be featured in the annual Sundance Film Festival, but like many other distributors, they went with the goal of buying a movie for future development and distribution.
Normally, distributors need to cast their subjective opinions on which movies will make it big in box theaters based on their gut instinct and ability to predict what audiences will think of the movies presented.
Legion M decided to utilize their community to filter through the 117 films that were featured in Sundance 2019, in order to determine which were most relevant to their interests and vote on which one would be bought. They ended up going into the festival with over 45,000 votes from their platform to guide them to which movies would be most desirable, based on official descriptions and teaser clips.
This process could have taken 15 minutes to 8 hours for each individual, based on how invested they were, but collectively made up over a year's worth of effort, spread across thousands of people.
This data was incredibly valuable, so as the circle of value goes, Legion M wanted to give back to the community by inviting anyone on the platform to join them in their super cool lounge at the festival.
For any given person in the community, going to Sundance can be a dream come true, or a bucket list item. And it can be pretty daunting to go to Sundance not knowing anyone, not getting into any parties, and trying to navigate the festival.
With Legion M, they're coming to Sundance as a film scout and co-owner of a hot new company in the space with a kick-ass lounge right on Main Street with free food and drinks (sponsors offsetting the costs), a community of supportive people, including celebrities, all aligned around their involvement with Legion M, and most importantly, they had a purpose for being there to help the company they all owned together make a smart decision on an acquisition target.
Absolutely mind blowing.
As Paul says, "Having fun can be good business. Going to see movies, meeting new people, and adding to the upbeat vibe of the lounge at Sundance -- that's pretty fun andit's also good business for the company."
It's true: the fact that Legion M's lounge was so poppin' made it desirable for other companies and producers to work with them, adding buzz and attracting even more fans to help them make a smarter decision on which movie to buy. (They did end up acquiring a movie, which is something to look out for later this year!)
It Doesn't Take a Superpower to Build Your Legion
We asked Paul to impart his words of wisdom on how to effectively build communities in entrepreneurship. Here's what we got:
Be authentic: It's pretty straightforward. Be transparent. Be real with your investors: They're getting involved in a startup. By nature, startups have their ups and downs, and that's what makes it exciting. We haven't had a lot of downs, but when we do, we talk about it, like, "Hey, this didn't do well -- we probably won't do it again. We're going to move on, having learned something valuable from it, so we're glad we did it."
Be communicative: It can be time consuming, but communication is worth investing in. Building community can't be forced, and the communication is key. This is something that I think Wefunder does really well. The people interfacing and managing the company can't just be doing it because it's their job, you want people who enjoy doing it because it's fun, and because it's interesting, and fun to get to know people and answer their questions. There are parts of the communication that can be a hassle, sure (Internet trolls and all), but back to that self-fulfilling cycle: we have found that the majority of people want to get involved, and the more you involve them, the more appreciative they are.
Involve people: Figure out ways where people can add value in an interesting way. We often find that there are more people that want to get involved than we have opportunities for, so we create those opportunities. For example, when it comes to naming something, we'll put that out to our community and let them chime in with ideas -- people are so incredibly creative. We also love photo mosaics. We encourage our community to upload their picture, and we use them to create our production credit in our movie. We also have huge posters of our photo mosaics at our booths at Comic Con and whatnot. It's such a simple thing to do, and so personal and really just embodies what we're all about.
It's not just the entertainment industry that relies on an audience. All products, services, and businesses rely on a consumer base, and the benefit that equity crowdfunding provides is that founders have a built in community of investors that they can lean on for guidance.
See your company first and foremost as a community. It's a community of people, and if it's big enough, it can provide you with the power to make waves in any industry.