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Old March 29th, 2005, 10:24 AM   #16
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"Do you feel a higher budget will bring in more money?

Heath,
Sorry I didn't get back to you sooner, this thread must have slipped through the cracks for me....

Ken pretty much covered what I would have said anyhow.
Yes, $25,000 is a VERY low budget, which means that the return on such an investment probably wouldn't be too high.

What would you possibly sell the film for?
Realistically, you could sell it straight to DVD for possibly double or triple of your budget.... so an investor stands to make roughly a 150% return. That may sound good, but given the risk involved in filmmaking I don't know that most investors will think it's worth it.

I've seen this happen more than once.
A few years ago a friend of mine was trying to raise money for a feature. We figured, do it on a shoestring and we can get the money faster....so he put together a business plan to raise about $50,000. Guess what, no one was interested. The question he heard more often than not was, 'how can you make a decent movie for $50,000?"
After a year, he decided to take a chance, and rebudgeted his film for $500,000, this time shooting on the Sony F900 with a full crew, etc. By the end of the year we were in preproduction with half a million dollars in the bank.

I'm not saying it's easy to get money... but once he started looking for a larget sum of money, no one ever stopped to ask "is this possible? do you really know what you're doing?"

It's a balance between making it affordable to an investor, but also seeming legitimate. If someone offered to sell me a Rolls Royce for $2,000 I wouldn't immediately think "what a great opportunity!" I would probably stop and think "how is he able to sell me this thing so cheap? It must be a piece of junk."

I ran into a similar problem with a business I'm trying to get off the ground with some friends of mine. We have a full business plan, and are looking for investors.... we tried the venture capitalist route and none of them will give us the time of day. Why? Because we are looking for less than a million dollars, and it just isn't worth their time. And our business isn't even a high risk venture! It's a very straightforward and proven thing that anyone could look at and see....yeah, that would make money. Yet we still haven't found the money for it, because the return just isnt' high enough for many investors to be bothered with it.

I know...it blows my mind...but those who have a lot of money to invest want to make sure it's worth their time to invest it. And $25,000 just doesn't sound like a lot of money.

At that level, you are better off looking to friends/relatives... or a large group of investors (25-30) who would each put in $500 - $1000 dollars.

Best of luck with this Heath!
Keep us posted.
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Old March 29th, 2005, 10:32 AM   #17
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One more thought.

You may want to talk to friends/family about getting some seed money together...that way you can tell investors you already have X amount of money, and you are looking for the rest. People feel more comfortable investing in a project that has already attracted money...it means somone else out there looked into it and thought it was worthwhile.

Also, keep moving forward no matter what. You don't want to give the investor the impression that you are looking for their money to be able to start your movie. You want them to feel like this film is moving forward and getting made regardless...and they have the opportunity to get on board or not.

I've always found that people want to be a part of something that is progressing. But if you give the impression that you are just sitting around and waiting for their money, they are far less likely to invest in you.

(i'm not saying that's what you were doing, just throwing it out there from my own experience)
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Old March 29th, 2005, 11:28 AM   #18
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<<<-- Originally posted by Cleveland Brown : Ken,
Just to get clarification, how much of your project do you have to already have accomplished before you can even beging to think about talking to potential investors? For instance it may not be a good idea to show up to a venture capitalist breakfast and not have the whole package ready. On the other hand, is it better to get the capital first so that you can actually afford a decent producer, dp, cast & crew? At which stage do you start requesting the venture capitol?
Treatment & script complete, movie proposal in hand, or, actors, director, producer already attached. -->>>

Cleveland,
I am no expert in this subject. I only participated in ONE feature film, and that was in the mid-1980's. So I've no idea how representative my experiences were at the time, or are now.

If I recall accurately, the producer and several representatives of the investment partnership held the initial meeting at a local hotel. Their goal for that dinner meeting was basically to present the basic concept for the film, the general funding structure, and ultimately sift-out the number of true potential participants. In brief they presented topics such as the general story line for the film, their ideas for casting, the film's anticipated budget and funding structure (ex: what percentage participation from each of several groups of investors), and the general schedule through release and distribution. So overall I recall that more than half of the initial presentation dealt with business terms rather than entertainment. (Everyone invited to, and attending, the initial meeting was required to sign a non-disclosure agreement.)

Later meetings, after the pool of investors had been established and closed, dealt more with the film's details and sometimes involved members of the cast and the director. But business and investment was always at the foundation of these meetings (with the exception of the last one which was mainly a production wrap party).

Which leads me to a significant point which I am certain is still valid. If you're trying to raise serious cash for a project you're going to need to involve people who know the investment business and how various funding structures operate. The financial concepts and structures of a major project become very complex. Investors, of course, can be as star-struck and anyone else and like to meet big-name actors and directors. But that's a side-show to the main event of money. The money people always led these meetings, not the entertainment people.
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Old March 29th, 2005, 11:41 AM   #19
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yes, being active and even having some seed money helps out.

This is all great advice, and i hope it helps everyone, even if it's just one part of the advice given.

Thanks,

heath
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Old March 29th, 2005, 01:02 PM   #20
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"The money people always led these meetings, not the entertainment people."

VERY good point, and one that bears repeating.

This goes back to presenting yourself as a businessman, and not just an 'artist.'
Businessmen make money, artists spend money.
As Ken mentioned, the investors may sometimes be star-struck, and some may be interested solely because they want to be part of making a movie.

The thing is, it's okay for them to be star struck, but it's not okay for the guy at the helm. People want to know that the guy who is taking their money knows what he's doing, not that he just wants to get his dream movie made. No one cares about your dream but you, everyone else wants to make money.

A friend of mine recently had a short film play at a festival, where he was approached by several producers interested to hear about his future plans. Long story short....one of these producers told my friend something very clear. He said "people think it's so hard to get a movie made, but it's really very easy. All you have to do is show me you can make me money. I don't care about the story, or the art, that's the director's job. Most people out here just want to know that you can make them money. If you can show them that, you're in."

It may not be as clean cut as that....but I definitely think there is a lot of truth to that statement.
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Old March 29th, 2005, 01:14 PM   #21
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Just a suggestion, but staying out of personal debt gives you quite a jump. I've worked really hard to have a home studio that's seperate from my house (it's next door) and own all my equipment. (a little debt, but not much)

If you're in it for the long haul...I'd try to imagine yourself 20-30 years from now. The studios or anyone loaning you money to make a film are basically a bank. Whatever you do...make sure you won't have to pay the bank back if your plan fails. It's a film, but really a business plan just like any other.

This is just me, but I decided to give up asking people for money and instead focused on earning it and investing in myself. Since I started doing that I've got 10 times what I started out with...just because all my resources stay put. I've asked others to fund projects before and it almost always turns into 90% chasing and 10% producing. I've spent the last year building a studio with my own money, and now I've got the rest of my life to produce in it. Any money I get can fund specific things - like I'll take investment for less cut or I'm even considering investing in other projects. I'm not at that stage yet, but I do know that I don't need any money to make a film right now. Yes, low budget...but, I'm in this for the long haul. As the years pass I'll have more money, equipment and experience to raise budgets just like the big studios do. If I happen to get some type of funding in the near future I'd make a bigger film that's all - or try pay to have it at the IFM and be there to represent it.

It's just something to think about - a long term plan is generally what I mean. I formulated my business plan in 2002 and have been executing it since then. However, it wasn't to make a film...instead it was a plan to become independently secure so I could make a film without additional funds. I'm pretty much there...it took 3 years though. I had to be patient. If you're serious about a long career (30+ years) and not just to "make a film" you might want to consider a long term plan.
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Old March 29th, 2005, 09:47 PM   #22
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As someone I know who made millions as a stock broker, his advice to people looking for investments (as in, not a millionaire investing in stocks, but people like us) is to invest in themselves. And I agree with him.

Good stuff, Murph!

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Old March 30th, 2005, 02:30 AM   #23
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If you have better chances of getting venture capitol when you are seeking more money, then it seems to me that it is reasonable to use better cameras (like HD vs. XL2), equipment, & crew etc.

So, not to get too far off topic but, can anyone provide me with some links to pricing and rental packages for camera, lighting and audio etc? These are numbers that one could really use when forming the proposal.
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Old March 30th, 2005, 02:38 AM   #24
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Fletcher Chicago might provide you with some good benchmarks. Of course people will be the most costly equipment you'll rent. Rule of thumb: if it eats and poops it's expensive.
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Old March 30th, 2005, 07:37 AM   #25
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I would do a search for info. I'm more familiar with rental houses in Florida. Look in the yellow pages in your local area.

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Old March 30th, 2005, 01:39 PM   #26
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I used to do a lot of corporate work in the O-town area. You know, Disney & Universal. But it was more confrence specific type stuff. I think you probably have more choices over there than you do here. It would suck to have to have it all trucked out to me.
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Old March 30th, 2005, 04:27 PM   #27
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what were you planning on using $25,000 for?
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Old March 30th, 2005, 11:13 PM   #28
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$25,000 covers cast/crew pay, food, lodging, rentals, etc.

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Old April 2nd, 2005, 04:04 AM   #29
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Put a budget down on paper, and be sure to include every single little thing that you already have, from notebook paper costs that you used for scribbling notes on.

Once you list everything you already own, and list the prices for that, it's a lot easier to talk to investors. Once you show them how much money you already have in this project, they will be more likely to help.

I'm just telling you some advice a person once gave me, and it did help.

Ask people with money. Business owners, excecutives, anyone who drives a car nicer than you..

Expect to get rejected, but don't go out without a fight. tall smoothly and confident, and ask as many people as you know, including family and freinds. Because, if more people invest in you, they each will be able to invest a smaller amount.

Also, don't expect to make money off of this. statistics say you wont. Don't lie to your investors. Don't lie to your investors. Don't lie to your investors. Don't lie to your investors.

Hope i helped..
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Old April 2nd, 2005, 09:06 AM   #30
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Lou is absolutely right!

Also, look at your assets--if you have a fancy car (or a friend/relative has one), you can maybe use it. Have or know of a big house? Use it for multiple locations (interiors).

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