Leveller's Ethereum-based digital investing platform aims to connect underrepresented creators with sources of funding—but can it take on the studios?
Tech entrepreneur Eric Vonfeldt’s previous startup, Predictive Media, combined machine learning and historical data sets to predict the chances of success for a creative project.
While working on the venture, Vonfeldt discovered that independent projects were less likely to be funded compared to those that worked within Hollywood’s studio system. Niche entertainment projects face hurdles and women directors are rare.
To rectify matters, Vonfeldt started Leveller Media, a platform for independent and creative professionals. Their first product, a digital investing platform, will be launched within the next “six to 12 months,” according to Vonfeldt.
The platform plans to solicit submissions from creators all over the world to “return diversity to storytelling.” Hollywood’s old guard is represented at Leveller Media by advisor Marty Katz, a former executive vice president at Disney.
The platform’s functioning is simple. Creators can upload their project details and terms and conditions for investment onto the platform, and machine learning software will match them with investors. Creators will also have access to a distribution channel for their final product. “The idea is to have an easier conduit for creators to have the distribution channels, if they don’t already have them,” Vonfeldt told Decrypt.
Leveller Media’s platform uses the technological underpinning from Vonfeldt’s previous startup. “Blockchain and tokenization […] was the perfect perspective to look at these [independent] projects and help creators get funding,” he says.
Vonfeldt says their platform will change the existing state of affairs by “aligning incentives between creators and investors.” That alignment occurs through the use of tokens, planned for launch at a future date, in financing independent projects. The tokens are used to fund each project and also act as an investment tool.
The Ethereum blockchain will be used to fashion smart contracts where invested funds are held in escrow on Paxos, a cryptocurrency exchange, and released in tranches based on the project’s progress. Third-party auditors will be used to monitor the project’s progress.
Each project has a unique token based on the “terms and conditions” specified by creators, when they upload the project. As an example, Vonfeldt says project tokens can be used to purchase equity. Presumably, that equity will be cashed out at a later date if the project is successful. A Levell token with multiple use cases and the ability to purchase project tokens is also planned for the future.
Ryan Clarkson, co-founder of the platform, says their use of tokens distinguishes them from other, similar sites like Kickstarter that use a comparable approach to funding independent projects. The tokens are meant to guarantee returns and profits for investors. “You cannot get a return on investment (ROI) for your investment on Kickstarter,” says Clarkson.
For a startup, the project has the ambitious goal of taking on Hollywood’s entrenched, century-old studio system. But there is little clarity on how it plans to go about doing this. Leveller Media is yet to divulge details relating to the different actors in its ecosystem. For example, it is not yet clear who the third-party auditors, responsible for tracking project progress and ensuring release of payments, are. The startup also has not released the number of partners it has signed to ensure compliance with AML/KYC regulations.
The use of tokens, especially in the current regulatory climate, opens up a Pandora’s box of questions. As they are planned currently, the tokens on Leveller Media’s investing platform are securities, according to Clarkson. And given that each project has its own token, this would also mean that the digital investing platform is also a Securities Token Offering (STO) platform.
Its founders have stated that they are working with “partners” to ensure that they are on the right side of lawmakers. Project security tokens and Levell media’s token may also be listed on exchanges, said Clarkson. But the logistics of this arrangement have yet to be revealed.
The firm also plans to adhere to AML/KYC requirements “where appropriate,” meaning it will not require investors in certain jurisdictions to submit their identification and other details.
Tech entrepreneur Eric Vonfeldt’s previous startup, Predictive Media, […]