Legion M, the entertainment company owned by fans, will hold their fourth-round of fundraising starting from November 16. They recently announced that they had over 5,000 interested participants that joined this round and the company is hoping to surpass the last fundraiser with their target goal of raising $1.25 million dollars and is legally capped at $2.5 million.
Fans rule the company and have the power to invest at Legion M
Legion M’s fundraising is regulated by SEC, which means investors are only allowed to invest when a qualified round is open.
Reservations are now available to individuals interested in investing by visiting Legion M’s website to guarantee a spot and avoid missing the opportunity to invest. The minimum amount to invest is only $100.
Legion M fans invest in various original film, virtual reality, television, and comic book themed projects and want to expand and move their company to the next level. Their recent projects include the successful critically-acclaimed revenge thriller, “Mandy” starring Nicolas Cage, “Colossal” starring Anne Hathaway, the upcoming Western Comic book and film, “Girl With No Name” and the fan-friendly steampunk science fiction television series, “Evermor.”
A conversation with Legion M Founder and CEO
I spoke to one of the co-founders and CEO of Legion M, Paul Scanlan, and he elaborated more on how he and his partner Jeff Annison collaborated and worked together.
He spoke about the process of owning shares in the company and about Legion M’s fan-owned business model. He and Jeff founded the company in 2016 and is the first to incorporate fan-owned start-up which is continuing to expand with the help of the Legion M fan community and the fundraising efforts.
“Jeff and I have worked together for 18 years.
We started another company a long time ago called, Mobi TV that we had a great amount of success with,”—explained co-founder, Paul Scanlan. “That company is still going and I’m on the board of it. It’s based here in the Bay Area and is still doing amazing things. One of our experiences when we started that company; we had a business plan where we went out to raise some seed capital with friends and family.
That tends to be how a lot of Silicon Valley start-ups get born.
They raise a little bit of capital with friends and family to test out prove the business and build it from there. And when we did that, we had friends and family, brothers and sisters that wanted to back us and this was prior to the JOBS Act so there weren’t large amounts of money, maybe $5,000-10,000 so we pulled all this money together when we met with the lawyers. They told us that all the investors that wanted to own stock in the company needed to be what the SEC defines as an "accredited investor.”
He continued, “They proceeded to explain to us what that meant—meaning that an accredited investor has $1 million dollars in assets not including their home or makes over $250,000 a year.”
“Unfortunately, not all the people willing to back us in that phase of the company met that standard; so, we had to give them their money back.
We paid them interest and apologized and then we went on to create a company (Legion M) that had incredible value. We grew like a rocket ship, we won an Emmy--had offices around the world. We grew the company to $100,000 in revenue—it always felt a little unsettling that the people that believed in us; even siblings weren’t legally allowed to invest in our start-up company."
"The rules were kind of antiquated and it always left kind of a sour taste in our mouth that the people that went on to benefit from the value and the growth that we created were the people that probably needed it the least; they were already wealthy and everyone else was locked out of it.”
The JOBS Act made Legion M possible
Scanlan discussed the JOBS Act and how it transformed investments in start-up companies.
“The JOBS Act was created and signed into law in 2012 by President Obama. Jeff and I started tracking it because we felt like as entrepreneurs, the time where you really need access to capital and your shareholders can have an impact on your business is in that “start-up’ phase. If you look at our economy—we have an economy that’s dominated by start-up growth."
"Some of the biggest companies in the US were start-ups a couple of years ago. It was a couple of months before they implemented what’s called the Regulations C Title 3 JOBS Act. We announced our company, Legion M, explaining that we were going to set out to unite fans together to co-own the company. It wouldn’t matter if you met the FCC definition - anyone can participate, and we were very disciplined about making sure that people understood the risk involved."
“Our goal would be to unite 1 million fans together over time.
That’s our goal and that’s built into our Legion M logo. Our ‘M’ in our logo is an M with a bar over it which is the Roman numeral for 1 million.”
“We are very clear with investors that we don’t want your life-savings we don’t want anyone investing more than they can afford.” Typically, we’re a start-up and most start-ups fail, but the ones that succeed can go on and change the world. Having been through that Mobi TV experience and having the success of it, we really felt like the opportunity to unite fans together to create an entertainment company that was owned by fans—it’s truly a once-in-a-lifetime opportunity.”
Paul noted that Legion M is the first fan-owned company to raise $1 million dollars under the JOBS Act.
“On the first round, we were the first company to raise $1 million dollars under the JOBS Act. We’re the first company to get to 10,000 investors—we’ve got a track record now of firsts and we’re not slowing down at all. We feel more bullish of our long-term goal of 1 million investors than we ever have.
Paul explained what the JOBS Act entails.
“What the JOBS Act has enabled us for the first time, since our securities laws have been implemented, is an opportunity for anyone, not just accredited investors, to invest in start-ups. It’s still SEC regulated and monitored and there are still rules around it. They do some background checks so it’s an opportunity for everyone to participate in this “start-up” phenomenon that we’ve seen from a financial market standpoint."
"Start-up investments are more “binary,” meaning that you might end up with massive returns if you invest in the right start-up but statistically, most start-ups go out of business and when you go out of business it means all of the investors lose all of their money.
People who invest in start-ups should not invest too much money and that they’re diversifying their portfolio to spread that risk out across multiple start-ups.”
As with any start-up, Paul said it’s a hit-driven business that involves taking risks. “We’re bullish on our company business model and our prospects and Jeff and I are betting our careers and our reputations on this business. Investors should understand that there are risks involved," Paul stated.
"The return on an investment comes from our ability to create value in the company so if we increase value in the company, our share price should go up. But we can’t guarantee any returns because that’s how start-ups work. We’ve had good growth on our community and we’ve had a lot of success with our projects so far—so we’re feeling really optimistic and we believe as we grow."
"Legion M grows like a snowball and if we grow faster our impact on projects is larger we have more control and take more of a leading role in those projects but start-ups are risky and entertainment is risky.” We want to have a diversified portfolio of projects like “Girl With No Name,” “Mandy,” “Evermor,” and we have several others that we’re developing now.”
Anyone can join the Legion M community on their website for free.
It’s optional to invest. As a community member, you can participate in all Legion M events without investing. If you choose to invest, you own shares in the company. Legion M’s events include the Sundance Film Festival, L.A., San Diego, and NY Comic Con.
All the funds raised go towards direct investment of upcoming and future projects, company expenses, marketing, and operating costs. Paul said he sees Legion M as profitable in about five years, independently producing their own projects.
“We’ve got a super-highly valuable engaged community that’s supporting in helping us bring new franchises to market. Our whole philosophy is that if you look at the entertainment industry, the projects that are the most successful and the reason why the studios focus on these are projects have a built-in audience.
What that means, is that you ensure your downside risk to a certain degree. (Example: They know a Star Wars movie will draw a certain amount of revenue no matter what the cost.) And if it’s really good, it will exceed expectations. But even if it’s like the last film, it will still make money. We want to find a creative way to build our audience in the community so that instead of just replicating the same title or franchise, we can actually bring a new franchise to market. The other thing that this community offers is an ability to take more risks and be more daring with the types of projects that we back.
Paul emphasized that the Legion M community likes to back and create great content.
“Mandy was a really good example for us because it’s not a typical standard “run-of-the-mill” movie—but it is a movie that found its audience that is successful in the marketplace but probably would have struggled to be gotten made.” As a community, we can’t make a bad movie good just by supporting it, but we can make a good movie a hit.” In the case of “Mandy,” we backed director Panos Cosmatos and the SpectreVision team and their vision for this project and they created a great movie.
We were able to help them make a great movie a hit.”
The producers were very appreciative to the value and the viral wave that the Legion M community brought to the Nicolas Cage film, “Mandy.”
“When that movie came out, a lot of people didn’t realize that it didn’t have any marketing budget. It was all pretty much “word of mouth” and grassroots kind of momentum and Legion M deserved a lot of the credit for that.”
With the recent passing of Marvel Comics founder, Stan Lee who Legion M has worked with, arrangements are now being made to host a fan memorial at TCL Chinese Theater. Paul also mentioned details of the huge event honoring Stan. He will soon be memorialized in cement.
“We organized to get his hand imprint at the TCL Chinese Theater (Los Angeles).
We’re talking to the theater as to what we might be able to do as a fan memorial. Legion M led that initiative to get Stan’s hand and footprint at the Chinese Theater.” That was only a year and a half ago that we made that happen. We did it in the way that makes sense for us which was, “Fans should be there with Stan.” Normally, the studio's executives are there and a few press but all the fans are on the outside looking in. We flipped that around. We said that this is being done by fans for Stan and fans should be there with him. We made it a huge event."
The Chinese Theater told us it was the biggest handprint ceremony they’d ever seen from not only an attendance standpoint but from the press and visibility and exposure. Stan was just amazing and so appreciative. He’s always been all about his fans from Day 1. We had a huge party that night with Stan and other Celebrities. There were 600 people in attendance. This was a demonstration of the power of fans. By ticketing and selling sponsorships we paid for it and made it happen.”
Fans will soon be able to view Stan Lee’s foot and handprint at the Chinese Theater and point to it, saying they played a role in making that happen.
Legion M’s motto is, “Having fun can be good business” and “Onward and Upward!” There are opportunities for fans to get involved in the Legion M community by visiting their website. Fans have the power to make decisions on projects and invest in Legion M as a shareholder.
