Wednesday, May 20, 2009
Friday, May 8, 2009
Monday, May 4, 2009
Okay, so you get the general idea about investing, right? Lots of rules required to keep your head above water. The SEC also wants to make sure that investors aren't blindsided by ruthless con artists who will do whatever they can to swindle them. Previously, I wrote about the investment package. That would include the PPM, the Business Plan (or Prospectus) and the last piece is how you structure the offering.
What does that mean? LLC, C-Corp, S-Corp, LLP, GP, etc., etc. It's the umbrella underwhich the movie is housed. This is where the novice filmmaker's eyes gloss over and they start daydreaming. "But I'm a filmmaker", they say, "I don't need to know anything about financing movies". Sure you don't, that's why you probably won't ever get your film made. Sorry folks, you're delusional if you think I'm going to be like everyone else and tell you, "write a great script, attach actors, and the money will flow". Here's the reality, as an independent producer, the structure is the real gold. Sure, it's nice that the script is good...it's even better that you have a direct connection to a certain actor...however believe me when I say, if they're not an A-List actor, your investors won't be that impressed. Unless you're independantly wealthy, or have a rich uncle or something like that, it will be a challenge to get money.
Here's the best advice that I can give, the more prepared you are when talking with investors, the better your chances of earning their trust, and ultimately gaining their investment in the picture (and more importantly, you). If you don't know the investor, then you're probably dealing with someone who is a "professional" investor. These guys are shrewd businessmen and don't part with their money easily. One of the easiest ways to get them on your side is the compelling argument in your favor...the movie's package. You show them the answers to all of their questions, and they're likely to invest.
How the film is structured is up to you, and a qualified attorney, to answer. Different structures have their different advantages. Personally, I prefer the LLC as a structure, due to the fact that any investor is a limited partner. That means, they're limited in the decisions of how this movie will be produced. Actually, in most situations, they have no say at all. They are also limited in their investment....meaning what they invest is all they are liable to lose (in the unfortunate event that somehow, someway your magnificent film doesn't make any money...but that won't happen to you, right?).
There is still more involved in investing in film, so for those of you that haven't had your hopes and dreams dashed yet, then stay tuned for more.
NEXT TIME: Is Slate Financing Dead?
Thursday, April 16, 2009
Thursday, April 9, 2009
Filmmaking is only made possible by those that invest in it. As a filmmaker, I can tell you, I'm really in the fundraising business. Investing in film can be fun and exciting, profitable, and simple...not always easy. There are so many ways to structure a project or package that it could make your head spin. I'll keep this pretty simple to start with.
Investing in film can be just like investing in any other product, security, commodity, or private investment. There are rules involved with those that want to invest. So, you can't just start asking everyone out there to invest in your film. Since there are rules and regulations, you need to consult an attorney (preferrably an ENTERTAINMENT attorney). A good Attorney will make your life a lot easier by helping you set up all of the forms (see PPM) needed to register your investment. The following are a (short) list of the essentials in any investor packet:
What is it? PPM stands for Private Placement Memorandum and it will be your friend when you are talking with potential investors.
Business Plan or Prospectus
The Business Plan is just as important as the PPM to help get your investors. Fact is, the PPM has all of the legal mumbo jumbo, while the Biz Plan has all the glitz and glam of a marketing slick. That's the intent. You want them to want to invest in you and your film....so you add all the frills such as the projections of the film, comparables of other films like yours, your marketing strategy, and a cashflow projection (how you'll spend their money).
There is a lot more involved in this, but I won't go into it just yet. Check back soon for the next post.
So, now it's your turn to come up with something special. The winner gets a very special reward. Stay tuned for more details.