Legion M

Unfortunately, the movie industry is dominated by publicly owned companies that sell on Wall Street, and have investors to answer to on a quarterly basis. They rarely are willing to take big risks on making truly original and unique content.

Legion M is not beholden to proven entities, because the investor base, which is already 7,000 individuals and the community which is 40,000 strong are an, “engaged vibrant community that have meet ups, book clubs, and go to film festivals together,” says Paul. Together they can decide whether or not they want another romantic comedy or if they want something new because they aren’t guessing on what they want, they are collectively informing what they want produced.

In addition to being a more informed group of investors in new productions, the Legion M community is a, “group that you know will come out and see the film on opening day and build a grassroots word-of-mouth movement that a studio would kill for, but money can’t buy,” says Jeff.

Put simply the Legion of investors and community members behind Legion M are, “probably not enough to make a bad movie good, but they do have the ability to make a good movie a hit.” And that could be the difference between a studio making back their money back and having an out-of-this world mega-success.

This community based differentiation gives Legion M a unique seat at the table alongside more traditional sources of investment and the team has, “already seen in the early days that [Legion M] is being sought after by top entertainment projects,” says Jeff

Legion M ultimately aims to be an award winning production house much in the same way as a Paramount or Universal Pictures, but in the early days the team will invest in a balance of in-house and outside productions. The mix will start as 60/40 outside projects, with an eventual shift to more in-house production.

Legion M’s investments in films are at the “print and advertising stage,” which is the last money in once a film is ready for distribution to theaters, and is also the first money out of the investment. This is a purposeful investment strategy by the team that see’s this approach as a, “much lower risk,” with a, “quicker turn on investment.”

The team is clearly on a mission to show the Legion they are part of movies coming to market, which drives engagement and helps to entice more potential Legion members who want to get in on the excitement of movie releases. Once the team has proven that the Legion model works, the team will, “eventually be focused largely on internal production and distribution,” says Paul. The value creation will ultimately come from Legion M becoming an, “entertainment company that produces, invests, and monetizes content,” says Jeff.

As a start, the team has put together a, “community with, “weight and influence,” to decision making through its, “scout program, extensive forums with diverse opinions on IP, and votes on projects.” In fact, the team will be releasing a, “Shark Tank like elevator pitch show where the winning idea will be developed by Legion M,” says Paul.

By taking a portfolio approach to entertainment investing, the founders think they can create a successful media production and investment company that is representative and diversified like their investor base, which in Jeff’s eyes is the only way to build a, “sustainable production company.” This diversification will come from investing across internal and external projects, across movies, television and VR, and across all genres.

1. Ability to raise capital & influence: To date, Legion M has been able to raise over $4M from 7K+ investors who have joined the Legion. Another 33,000 have joined the Legion M community so that they can weigh in on what projects get produced in the world of Hollywood. As the Legion grows in size, the team is continuing to get a better seat at the table and Hollywood is on notice.
   1. On average their investors are putting in, “about $500,” which means if they accomplish their 1 MILLION investor goal, they will have raised HALF A BILLION and position themselves to become, “the most influential media company on the planet,” says Paul.
2. Early successes: To date, Legion M has already backed projects such as Colossal that starred Anne Hathaway, and Jason Sudeikis and secured an 80% Rotten Tomatoes score. The Legion has also invested in, “safer bet horror films that have bigger international markets than romantic comedies,” making it more manageable to, “monetize those projects really effectively,” including the likes of Bad Samaritans, and Mandy (which crushed at Sundance). The team is showing that the Legion knows how to make great picks, when it comes to what projects to get involved in.
3. Industry buy-in: It goes without saying that the team would not be involved in such terrific movies if they couldn’t get Hollywood’s buy-in. But the grassroots nature of Legion M, and the significant capital raised by the organization make it hard for Hollywood not to pay attention. It helps that the industry is in desperate search for “different” at this current point in time.
4. Experienced founders: Paul and Jeff were also the co-founders of MobiTV, a startup that they grew into a, “$100M business, and won an emmy for, which continues to disrupt the entertainment space.” With that kind of pedigree and experience of building successfully in the entertainment space is assuring as we think about how they plan to build at scale in one of the most competitive industries in the US.

The Recommendation

Legion M, by all means comes with a set of additional risks to that of a traditional startup in that you are investing in a startup that is investing in essentially “startups,” because so many movies are flops. With that lens, the question becomes, has the Legion M team founded a company with a winning model to compete in the crowded Hollywood landscape?

After getting to know the founders and how the traditional Hollywood model works, I became bought in that Legion M actually does have a leg up to current competition. By engaging the crowd on production decisions, and by providing a built in fan base, Legion M has taken a lot of the guesswork out of movie production bets.

The fact that the founders have envisioned a world where Title III provides, “a once in a lifetime opportunity,” to build a, “co-owned entertainment company,” is also intriguing. In the words of Paul, “there is no other industry that is more fan driven than entertainment,” and he hasn’t been proven wrong as they have pulled off a couple of the most successful equity crowdfunding raises to date.

Considering that the team has already shown an ability to raise funds from 1,000s of investors, invest in top-tier productions, build a diversified portfolio of content, and begin to produce early in-house content with promise in just a couple years time, the vision of, “opening the doors to hollywood,” starts to seem very feasible.

These early signals mixed with the paradigm shift in shaking up the old boys club in Hollywood, I think Legion M is in the right place at the right time.