Largest-Ever Crowdfunding Campaign for a TV Show Issues Equity to Investors

'The Chosen,' a streaming series about Jesus, used equity crowdfunding, a technique (rarely used in Hollywood) made possible through a provision in President Obama's JOBS Act.

A series about Jesus Christ has become the king of crowdfunding among TV shows and films by raising nearly $9 million and, in doing so, setting a template others could follow by offering equity to investors instead of the usual trinkets, like tickets to screenings, DVDs or lunch with actors.

The project, called The Chosen and produced by a limited partnership under the same name, used "equity crowdfunding" to raise enough money for several episodes of the scripted show, offering one share for each dollar invested. Its record-setting campaign ends at midnight Saturday and, when it does, might reach its goal of issuing 13.9 million shares.

The shares cannot be resold at this time, but managers of The Chosen Productions have guaranteed that they will receive none of the profits — should there be any — until all investors make at least 120 percent on their investments. Those investors could potentially make more, as they will be partial owners in perpetuity.

The Chosen will be distributed by VidAngel, the entertainment company that lets parents seamlessly skip scenes they deem inappropriate for family viewing on Netflix, Amazon Prime, Roku, Apple TV and other platforms (though the company is engaged in a lawsuit with several studios over its service). VidAngel and The Chosen (and crowdfunding investors) hope to make a profit via streaming and broadcast licenses, VOD and DVD.

The production company was allowed to issue equity to investors because of a provision in President Obama's so-called JOBS Act that went into effect in the middle of 2016. The "equity crowdfunding" provision is highly regulated by the SEC, but it basically stipulates that production companies (and other entities) can offer a share of the profits to online strangers who financially back their projects.

Some observers predicted equity crowdfunding would be a boon to the independent entertainment industry, though it's mostly been a nonstarter until The Chosen, which has beaten out the previous crowdfunded champ among TV and film, Mystery Science Theater 3000, which raised $5.8 million on Kickstarter before the show was picked up by Netflix. The top film project is Veronica Mars, which raised $5.7 million on Kickstarter.

On Indiegogo, the main competitor to Kickstarter, the record-holder for film and TV is Super Troopers 2, which raised $4.6 million. None of the projects at Kickstarter or Indiegogo offered equity to investors, only baubles, such as a limited edition Veronica Mars T-shirt or a copy of the Super Troopers 2 script with handwritten jokes in the margins.

VidAngel and the production company released a concept pilot of The Chosen, a reverential retelling of the story of Jesus, on social media that was viewed 15 million times, which encouraged them to launch the equity crowdfunding effort. They are seeking $13 million to produce a full series order. It's directed and co-written by Dallas Jenkins, who most recently directed the comedy The Resurrection of Gavin Stone for Blumhouse Productions and Walden Media.

"We started this campaign with no built-in audience and we based it on a short film I made on my friend's Illinois farm for my church's Christmas Eve service after my previous film had disappointed at the box office," Jenkins said. "What's happened has blown us away, but it's an indication that there's tremendous demand for something like this. I love binge-watching original series, so why not one about Jesus and his followers?"