by Bob Carson

Editor’s Note: The USTA website is pleased to present freelance writer Bob Carson and his popular “Outside the Box” features. This monthly series is a menu of outlandish proposals presented with a wink — but the purpose behind them is serious. The views contained in this column are that of the author alone, and do not necessarily represent the opinions or views of the United States Trotting Association.

“It’s easy to meet expenses – everywhere we go, there they are.” — Anonymous

Bob Carson

If you don’t chase your dreams, you can’t catch your dreams.

What are yours? Opening a hostel in Tuscany? Sponsoring a young player on the professional golf tour? Hiking the Appalachian Trail? Purchasing a trotting yearling and then watching it train and hopefully race?

Some dreams marinate for years. Others can arrive in the night and disappear like a soap bubble. To keep the elusive ones, many of us keep a pad of paper next to our bed. Here is one of mine.

Jan. 12, 2005

… make a movie, a full length documentary, show the struggles and pressures that face professional baseball players at the bottom of the professional ladder that leads to the major leagues, set it in a small town. ….

In the morning, I tore the paper off the pad, scrambled out of bed, got dressed, made coffee, sat down at the computer and began typing a list of plusses and minuses. I have made more lists than the New York Times book club.

Reasons for making a movie:
1) I like movies
2) Seems like fun

Reasons against making a movie:
1) Zero knowledge of filmmaking
2) Do not know a single person in the movie business
3) Do not have a script
4) Do not have a complete story
5) Do not have a clue
6) Few financial assets
7) Cleveland is several thousand miles from Hollywood
8) My wife and daughter will need to endure more lunacy
9) No fund raising experience
10) Am unable to master operation of my cell phone to take a photo of my dog.

I started on the film project immediately.

Since I was at the computer typing lists, I began, as many projects do these days, with the Internet. I typed OHIO/DOCUMENTARY/FILM. A screen of web sites popped into view. I scrolled to a site that listed the Ohio University film department, clicked the link, rooted around the site and found the e-mail address of the head of the film school. Then I wrote an e-mail asking for names. Soon I was involved in a project that occupied a solid year — a wonderful year.

This odd escapade was an instant replay.

Two years earlier, I had a different wild idea, made an almost identical list, made the same cold calls and spent a year in a brand new arena — purchasing a trotting yearling. Making a movie and buying a yearling had a lot in common; they are dreams, high risk adventures, involve some luck, require patience and cost a lot of money. The money issue can be a problem, especially for those of us who do not have a lot of it. This is where many dreams flounder.

Making a movie, buying a yearling, or moving to Italy? Unless you are the ultimate bohemian, you will need a cash flow. I knew the bills would roll in before the 2-year-old might race or the film might premier. I did not know where the money would come from. The need for financing is nothing new; some of us need to be creative. In a strange way, raising the money can be part of the fun.

There are financing options in the film business and the racing business. You can pay the bills yourself, bring in partners, drain your savings, bring in investors, borrow from people, run up credit card debt, apply for grant money, knock off a liquor store, sell your house or take a second job.

Before looking for money, you need to decide at what level you want to play. Are you going to make a five-minute short or a full length indie film aimed at breaking through to the Academy Awards? Are you looking at a $3,000 yearling with a struggling trainer willing to train and race the horse or shoot for the Grand Circuit?

It is probably a good idea to make your first attempt, your learning year, a modest budget affair. In both harness racing and film, this is how I rolled.

A modest budget means economy is important. Corners will be cut. For the baseball film, I wrote the outline, the script, arranged the locations, carried the camera, set up the sound equipment and worked in the editing process. In racing you can find ways to save, maybe even do some work (once I jogged horses on weekends in lieu of a training bill).

Many of us loathe asking others to subsidize our madness. But it’s a pickle. In these risky games you need to have some financing and the unhappy situation with both movies and yearlings is that the more money you have the better your chances of a great end product. Next year, our chances may improve thanks to the SEC. The amended regulations may improve your ability to buy a yearling or make a movie or chase some other dream.

After completing the baseball film, enjoying the entire process and learning plenty, I was itching to do a documentary on drug addiction. My hope was to up my game and multiply my budget. Just as if you race your first yearling on the fair circuit; it makes you want to try racing at a higher level; this means the expenses will rise.

At this point, I considered Crowdfunding. This is where you raise money via the Internet to fund a project or business. The idea is to ask large numbers of small donors to pitch in and help you pay for your dream. People looking for funding on online platforms or funding portals explain their dreams, the dreamers or small business people make a pitch for others to pitch in. The investors do not receive anything except for perhaps a t-shirt and updates on the project.

This did not appeal to me. The idea of bringing hundreds of new people into your dream was exciting but anonymous benefactors not allowed to be compensated did not feel right. Starting next year the feeling will change because the rules will change.

Crowdfunding is on the cusp of a new frontier that may be of value to people wishing to attempt exotic endeavors such as racing a yearling or making a movie. New rules out of the SEC will essentially allow companies like Kickstarter and Indiegogo to offer those who contribute funds to receive something in return. For the first time, dreamers will be able to offer a share of the profits in a project with supporters.

The SEC press release is 686 pages long. This is about 685 pages more than most of us wish to wade through, so let’s read a summary by Mark Litwak, a veteran entertainment attorney, professor and producer. As you read, see if you see a possibility to swap the words film with yearling.

“Because investing in film is such a risky endeavor, being able to spread that risk among many small investors may substantially increase the amount of financing available for indie films.

Essentially the new rules will allow companies like Kickstarter and Indiegogo to offer those who contribute funds to receive more than posters, t-shirts and the other swag they now get in return for a donation. For the first time, promoters will also be able to offer a share of the profits in a project.

Previously, Internet platforms were limited to donations, unless they complied with complex and costly SEC regulations governing investments. Under the new rules, however, if an indie film is a hit, the backers can share in its profits. This will likely encourage small investors who want to participate in film or other startup businesses, but can only afford to make a modest contribution.

The new rules limit the amount of individual investments to relatively small sums, but collectively, they will constitute enough of an investment to make a big difference for many start-ups. Investors with annual incomes or a net worth of less than $100,000 can contribute up to $2,000 or five percent of their net worth or income, whichever is greater. Wealthier investors can invest 10 percent or the lesser of their annual income or net worth in these transactions, with a cap of $100,000 over a 12-month period.

While this cap limits investment to what amounts to the catering budget for major studio films, it will allow many indie filmmakers to raise enough to produce a film or pilot program.

Funding portals are platforms that provide investors with information about investments being offered. These portals are designed to allow Internet-based platforms or intermediaries to facilitate the offer and sale of securities without having to register with the SEC as brokers. Portals are required to register with the Commission and become a member of a national securities association (currently, FINRA).”

Is help for creative harness horse racing dreamers embedded in these new SEC funding rules? More importantly, do these new rules offer help for the entire racing industry, especially expansion of the breeding marketplace? It would seem that if hordes of people who love the thrill of raising a racehorse are able to reach out and easily solicit small amounts to make their dreams come true, growth is possible.

Movies, yearlings or that hostel in Italy….while we slept, our dreams may have been nudged closer to reality.