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Equity investment platform Untold.io wants to reinvent how entertainment is funded with a platform that allows anyone, including regular, unaccredited investors, to invest in movies for as little as $1,000 per movie.
Headquartered in Universal City and New York, Untold was founded by filmmaker, director and entrepreneur Ali Aksu, who was seeking to address the loose and uncensored financial model used by the entertainment industry, which, according to Aksu, was subjected to unworthy The impediment of trusted financiers has shaken investor confidence.
“In Hollywood, we don’t necessarily have people trying to do things step-by-step. It’s mostly financiers going around and really cheating a lot of people,” Aksu said. “Every time I speak at an event, I ask the crowd, ‘Hey, have you ever invested in a movie? What’s your experience?’ It’s almost always 50-50, with half being scammed and half being profitable.”
Untold isn’t Aksu’s first foray into the intersection of entrepreneurship and entertainment. He also founded Auteur Academy, an online film platform that teaches any type of producer how to create a product in the industry and make a successful exit.
But when it comes to Untold, which will be piloted in 2019, Aksu hopes to bring more certainty to the financing of movies, shows and streaming content.
The platform is registered with the Financial Industry Regulatory Authority or FINRA and is an SEC-registered funding portal. These registrations allow companies to accept investments from accredited and non-accredited individuals. (Accredited investors are those who meet a fairly high financial threshold and are authorized to buy unregistered securities. Non-accredited investors are people with average incomes who should not buy such securities, which are considered riskier.)
Registering with these institutions is a challenge, according to Aksu. Previously, the platform could only raise funds through private investors.
The licensing process took Untold about a year and a half to complete, a hurdle Aksu likened to passing the bar exam. “You have to have some background to show that you can sell securities and market securities,” he added.
Untold is the only entertainment-focused investment platform on FINRA’s list of regulated funding portals.
Impact of the pandemic
Another challenge was launching the business months before the Covid-19 pandemic, which rocked the film industry with production shutdowns, financial distress and accelerated consumer adoption of streaming content. Aksu noted that the shift to streaming has led to increased content acquisitions by companies like Apple and Walt Disney.
However, as the pandemic recedes and entertainment content production resumes, Untold has shrugged off the flip side of the challenge of finding people to use its platform.
The company has yet to receive seed funding, but has received pre-seed support from its lead investors Forty33 Ventures and Prescient Capital. Aksu himself has funded part of the startup, according to Crunchbase. Pre-seed funding took place in 2020 with $500,000 in funding.
Untold operates in an established digital space that includes crowdfunding sites for entertainment financing, including Patreon, GoFundMe and Indiegogo.
Through these sites, filmmakers, often at the indie level, enable fans to support their projects through subscriptions or one-time donations ranging from pocket money to thousands of dollars.
However, investments made through Untold and movies hosted on the platform work differently.
For movies with well-known directors and actors, it is possible to invest as low as $1,000 on the Untold platform. Untold hosts “Road to Comeback,” a film starring Robert De Niro, Morgan Freeman and Tommy Lee Jones, on its portal. Potential investors can watch the film and decide if they want to invest; in this case, the money will be a refinancing of old debt.
The first film on Untold was “Alaska,” which used the platform as a budget source for its entire production.
“We offer many different levels of investment, and just like if you invest in a startup, you can be an angel investor, a seed investor or a Series A, B or C investor,” Aksu said. “Alaska came to us in this case as a seed with a script, and we raised money almost like an angel and a seed (funder).”
Investments through Untold go to vetted projects and people, an important part of Untold’s model.
“Our job is to really make sure the producers have passed due diligence, the film has passed due diligence, bad actors checks, we check everything for them,” Aksu said. “(The film team) complied with SEC requirements when we opened them up for sale.”
no hits… not yet
Untold evaluates film executives based on their past business performance, personal and industry reputation, awards, and more.
In terms of investing in the platform, investors using Untold may have to carefully consider the potential box office numbers of movies hosted on the platform. So far, Untold has not been significantly impacted on its platform.
Untold has only held three films to date, but it has big ambitions, not only in terms of superficial growth but also in terms of sustainability.
“We want our content to be relevant to the UN’s 17 Sustainable Goals, and we want that content to be impactful from the start,” said Aksu, who is also a Young Professionals Ambassador for the South of the United Nations Association of California, USA.
The UN’s 17 Sustainable Development Goals include eradicating poverty, tackling climate change and promoting inclusive institutions.
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