FilmHedge, an Atlanta-based financial technology startup, raised $2 million to triple its team and released its lending software for movie and TV production companies.
WOCstar Fund, a by New York-based early-stage investment firm, led the oversubscribed round with participation from friends and family, according to CEO and founder Jon Gosier.
The startup spent the last year in stealth mode while the team built out the lending software, which is now live — meaning production companies can go to the site and apply for a loan.
FilmHedge provides fixed-interest loans of up to $1 million and lines of credit up to $5 million to help finance movie and TV productions. Gosier, a whose spent his career in technology and in film production, founded FilmHedge because of the inefficiencies in financing media projects.
Unlike the startup ecosystem, Gosier said there’s no network of venture capital firms willing to invest in movies and shows. Instead, production companies must solicit funding from family and friends, which often turns into a long and complicated process, he said.
In order to make part of the process more objective, Gosier and co-founders Janelle Alexander and Mickey Vetter founded FilmHedge.
FilmHedge fills a specific niche for production companies. Gosier said there’s three reasons production companies may turn to FilmHedge: at the beginning of the project, to get a loan in order to hire a popular actor; during the project, if they need extra cash; and at the end of the project, to reshoot or add extra scenes.
To be approved, a producer must already have a letter of intent from a company, such as Netflix or Hulu, that wants to buy the film once it is finished. FilmHedge is a strategic funder, Gosier said, specifically for professional or semi-professional filmmakers.
Gosier started lending to production companies in 2017 but started to develop software to make the process scalable in February 2020.
FilmHedge is an objective process, Gosier said. If the company meets the criteria, it gets funded.
"There’s no reading scripts,” Gosier said. “There’s no, ‘I’ll fund it if you put my son or daughter in the movie.’”
A production company goes onto the site, fills out a prescreening application and goes through a verification process. Gosier said it takes about a week from the application to the approval.
FilmHedge partnered with an investment bank that declined to be named in order to provide the capital, Gosier said. The loans are usually for nine months to a year. FilmHedge produces revenue through interest rates.
Gosier said he expects to receive 400 applications and approve about a quarter of them. The startup has already financed more than a dozen projects, which Gosier declined to name but said some are already on streaming services.
Gosier said the next step is to expand his six-person team to 20 — adding mostly technical talent from financial institutions and film financing experts.. FilmHedge has an office at No18 Buckhead, a co-working space at Buckhead Village.
