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Taking Care of Business
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Old January 24th, 2004, 10:18 PM   #1
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Finding Investors

Hey guy's,
Important Question you've seen before, I'm sure. Here is the situation. A group of friends who enjoy filming no budget short's in thier spare time, choose to get a bit serious.

so they sat down and wrote an actual story. at first it wasn't anything special but re-write after re-write and months later it turned into something they believe would make for a GREAT movie, something they could shop around at film festivals.

they start on some pre-production, the free and easy steps, like, location scouting, story boards, gathered information on rental equipment, ect, ect.

then SMACK. everyone knows what is needed to go any further, yet, they have no idea how to proceed. what these young determend film makers needs is FUNDING.

they start the prosses of creating proposals and seting budgets but they are new at this and want the advise of people who have been in these shoes.

and now for the question! :)

we are looking for examples of "investment proposals" and how to properly make a budget. with our rough estimates we figure we will need around 35,000-50,000. the main question is, where do you find and how is the best way to aproch investors??

if anyone could please give some advice, it would be greatly appriciated.
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Kristopher Mallory is offline   Reply With Quote
Old January 25th, 2004, 12:20 AM   #2
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There are several good books on the subject. (Also look at the additional books linked on this page.)

I am pretty much a full-time investor, but -not- in film projects. So I can only offer comments from a general investor's point of view. Fundamentally you are going to have to be prepared to present your project in investment terms, not film/video terms. To do so you are going to have to understand some basic principles of investment and at least some of the competing, and far more conventional, opportunities currently available to investors; that's your "competition".

The basic questions any true investor (in any endeavor) needs to have answered are:

1. How much will I have to commit?
2. What return can I expect?
3. How much risk is involved?
4. When will I get my money back with that return?

You are looking for a very small amount of money, barely enough to buy a good automobile these days. While this might seem to be a good attribute, it's not for several reasons. For starters, it doesn't sound like a remotely credible figure (even if it really is). Everybody "knows" that filmmaking is a black hole of cash. So you're going to have some 'splaining to do, in the form of detailed budget estimates, to buttress such a small figure.

But beyond all other such matters, even the rather outlandish prospect for a 100% return on $50,000 over, say, two years will not be very impressive to a sophisticated large investor. Far too much risk (particularly in the hands of amateurs -- no disrespect intended) for too small of a probable reward.

So it's likely that you'll actually end up with, say ten "investors" of $5,000 each. This can make for quite a burdonsome investor relations challenge since at least some of these folks will turn out to be relatively financially unsophisticated and may want to know "how it's going" each week.


Bottom line: Do 150% of your homework, anticipate the questions you'll be asked, present yourselves as being credible (even if you have to hire someone with gray hair and mature style to be your spokesperson), and most of all be HONEST!

Some of the books linked above may point you toward alternative funding sources such as grant programs for which you can apply.

I wish you great luck with your project. It should be a very valuable learning experience for you.
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Old January 25th, 2004, 06:20 AM   #3
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I took a slightly different road.

I formed a film company where i am able to accept donations and grants for productions and inturn my investors can claim a tax deduction.

I give them no prospect of a return on the money, but rather work on publicity for them, in regards to having local press mention them when i make a movie and submit it, as well as producing small pieces for them to use internally and so on.

Most of all, i go to wealthy business men not associated with film at all, moreover these are people making very healthy profit's on their businesses and have a little extra to splash around on a young hopeful.

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Old January 25th, 2004, 09:16 AM   #4
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Ken, thank you for the links and words of wisdom. I'll be sure to pick up these titles.

it is true that myself and partners are beginers and far from meeting our goals, it just seems, the jump between making 0 budget short films and making a low-budget film should have a step somewhere between. Unfortunitly there doesnt seem to be one (unless i missed something). i plan on doing as much research as possible and proceed with caution on the project. I can only hope that will be the glue holding the pieces together. :)

to zac,
could you prehaps elaberate on the donations and such? how have you found the best way to contact people in this regard? I will definatly create an LLC once we are sure the project can go into the next phase, maybe the road you took could work for us as well. thanks.
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Old January 25th, 2004, 11:11 AM   #5
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for a 35K -50K ask family, relatives ,friends , credit cards .

when you start asking public rules/laws will come into play.
there use to be a limit to how many persons you could approach that you didn't know.

you might be able to get non-profit status by doing your project under the umbrella of a non profit such as the film arts foundation (FAF . you apply to the FAF for fiscal sponsorship. if they feel your project is non commercial they might accept you.. . you then ask persons for a donation to your project. they send check payable to FAF ( with note attached it is for your project). FAF cashes the check - takes a fee - sends person a letter stating under 501 IRS/ their tax # it is deductable. FAF then sends you a check. if you plan to do it this way you may or may not need a LLC as most form a LLC to protect investors. if you do form a LLC you might have to put into bylaws that it is a non commercial project if you seek donations under a fiscal sponsor??.
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Old January 25th, 2004, 01:26 PM   #6
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Thanks Don, Im checking into that now. The first thing i did was start contacting reatives for donations, however out of any family members who i felt comfotable speaking to, not one of them could contibute more than $500.00. it's a small amount and I'll except if i have to. just didnt want to be irresponisble and take anyone's money until i know that i'll have atleast a 50% chance of finding the rest of the funding. As for credit card's that was my personal contibution, I spent a large sum on some Simi-Pro gear, that way if it happens then we will get some decent shots but if it comes to a firey crash and doesn't happen then these items can be sold to others at a minimum loss to me.

I guess im what you would call a "Realist-Optimist" kind of an oxymoron but it's kept me going this far :)
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Old January 25th, 2004, 02:25 PM   #7
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I was an optimest, until I held auditions this weekend. I rented a nice conference room, bought refreshments, and waited. Out of at least 100 people that had said they would audition, 12 showed. With such a low turnout, I have decided to put my project on the back burner until I have better finances to work with.

But this was just the latest setback... Trying to get crew, props, etc. , it was really wearing on me. So, I know when to say whoa- take a break and recoup.

As for your other posting, about the new forum? I have been keeping a journal on my website-
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Old January 25th, 2004, 02:52 PM   #8
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i read your story keith and im sorry that happened. please don't let it get you down. take time to regroup and plan a new way to find some talent to act. what ever you do.....don't give up! send me an email if you need some marketing tips. because of my exsperiance advertizing for conventions that is one thing i've been good at.
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Old January 25th, 2004, 02:53 PM   #9
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Kudos to Ken for his solid advice from the investor's prospective.

The following was the advice of Scott Lax, who independently produced the film adaptation of his book set in Vietnam War-era Ohio called The Year That Trembled. When you sell shares of a film production venture, you're selling securities. If you or your producers have no experience in producing and selling films, and even if you do, you will do well to get the assistance of a respected law firm on your side to handle the particulars. While you may not be a bankable commodity, the prestiege of the money handlers will help to give investors the confidence that your operation is on the up-and-up.

Hollywood producer Boderick Johnson's secret to success, he claimed, was in his business plan. Straight out of business school, he and his producing partner wrote up a plan that was so compelling, that outlined the types of movies that his fledgling company would package so concisely, that articulated the marketability of their products with such impeccable research, that his investors couldn't resist biting the bait. When you can convince investors your architectural schematics are sound, they'll jump to pay for the construction costs. (He claims the business plan itself is under lock and key, and that, it being his most valuable trade secret, he'd never let anyone else get a look at it!)

It helps to have faith that cream rises to the top. If you and your project are worth investing in, seek and ye shall find.
All the best,
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Old January 25th, 2004, 03:24 PM   #10
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Thanks Kristopher, but I'm doing fine. Like I said, I know when it's time to take a break. It's time now. I started working on this last June, and finished the story in August. Since then, I have been trying to find locations, crew, and get props together. There are a handful of board members that have offered their assistance, so crew is set- more or less.

The location that inspired this story, decided that now was the time to become modern. The little intersection I remembered from childhood, now has curbs, modern traffic signals, factories, and other things that have changed the sleepy little area too much to use it now. New locations haven't materialised yet. Add other issues, and well... you get my point.

I wasn't nearly as ambitious as yourself- I was only looking for 3 or 4 thousand as a budget. $1500 for insurance, $1500 for DVD mastering, and a few hundred for costumes and props. Everybody was cool with the idea that they would recieve a percentage of sales, not profit. I try to be generous. The rest would go into food and refreshments.

But... It must not be the right time yet, or it would have worked out. I can be patient.
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