To raise funds for your film, you must first devoid yourself of the idea that you are seeking financing for a work of art. No. You are seeking money for a business. It is the film business (no matter how much the detractors want to call what you do a “hobby”). And to raise money for a business, you need a plan, a.k.a. a business plan.
If you’ve been following this column/blog over the past couple of months, you’ve read me skirting the area of your indie film biz plan. Starting with this entry, I’m going to take you through a four-part approach to this subject. Maybe some of the parts will require more than one entry. Maybe I’ll go off and talk about something else in entries in between. But one way or another, I want to walk through four basic key elements that I’ve found are essential for any business plan, and most certainly for yours. And, they are as elemental as Who, What, Where and How. (“When” being unnecessary to address, as we all know that is ‘fucking NOW!’ Though perhaps a word about patience is in order… later.)
A more artful and effective approach (yes perhaps even affective, for those of you in the front row who read my last post) is to conjure up the analogy of fishing. Now, mind you, I hate fishing. Much much too boring. (Though I have romantic notions of becoming a master fly fisherman, but…) Anyway, I nevertheless understand its precepts, as do you. So, here goes: Successful fishing requires you understand four key things: 1. The type of fish you want to catch; 2. How to access them; 3. What attracts them; and 4. What your lure will look like from their POV.
Now besides the “understanding” you have to have the skill to master the fly rod, but that is beyond the scope of this right now. I am not going to discuss the intricacies of how to present yourself, how to negotiate, how to close the deal, etc. just yet. We might talk about it later, but for now I am talking about the essential elements you not only have to know, but truly understand.
So, let’s get started…
What type of fish do you want to catch? Or, of course, what type of investor do you want? This is a critical question, as it informs much ahead. Investors come in all types, including friends and family (avoid at all costs), short-term lenders like credit cards (avoid at most all costs), long-term lenders like banks, etc. (What? Are you kidding?), wealthy individuals (okay, now you’re talking) and investment groups or companies (the best, usually).
Let me pause a minute…
You may be new to this blog, and asking “who the hell is this guy and how many films has he financed?” If so, then stop reading now, go to the MovieMaker Magazine on the shelves now (Steven Soderbergh and Benicio Del Toro on the cover), flip to page 26, read my column there and then come back.
Well, you came back, so maybe you are. Now read the first blog below.
The other reason I want to pause is to make a few points. First, there are several great books out that go into all this biz plan stuff in great detail. My recommendation is that you start with Louise Levinson’s book, Filmmakers and Financing
. Second, and in contrast, I am not writing a book here. This is a blog. I am not trying to fully flesh out each element, but to poke at it with a stick and give you some general thoughts. E-mail me directly through my production company, BlueRun Productions, if you want to ask a specific question. And third, though yes I’m a “recovering attorney,” I am not giving legal advice here. Just spoutin’ off some thoughts, that’s all. Seek your own legal and accounting counsel.
Now back to the show in progress…
I won’t bother to talk about the first three types of sources, but will just focus on wealthy individuals and investment groups, as these are your target fish. And yes, they exist even in these tough economic times. Remember, in a storm, fish don’t just friggin’ grow legs and say, ‘I’m outta here, losers!’ (Well, except over millions of years, I guess…) Okay, I digress. No, rather, in a storm, the fish just go hide for a while. You either have to wait for the storm to pass or know how to find them in deeper waters. But don’t despair, they are still there.
So, sticking with the ‘Type of Fish”, a.k.a. the “Who” question: For individuals, seek whom the law calls “Accredited Investors” (see definition here: http://www.traderslog.com/Accredited-Investor.htm). By aiming specifically for these sorts, you’ll go a long way from tripping up in the thorny vines of state and federal securities laws.
You ask, how do I know if they meet the qualifications? Good question. You don’t. But if you prepare your investment docs right, the investor will have to sign a document saying they are indeed an accredited investor before making the investment. So, going in, just aim for the richest people you can find. These investors have a definite upside, including often being listed as executive producers (EPs) on films in your genre (though thus hard to reach), and they’re usually easier to work with than an investment group or company. But you must tread carefully. You don’t want to jack with one person’s life savings, even if you did talk them into it. (Back to the accredited investor question.) And you must be careful with how you approach them… Be sure it is not in any way through a blanket solicitation, etc. That would be the equivalent of over-reaching, falling out of the boat and drowning. Not cool. Hard to direct a film from the pokey. (See the Where/What and How discussions.)
Commercial fishing is done on a large scale, often in large fish farms. (Screw the guys with the ocean nets… the bastards.) The idea is, of course, to approach a single group of fish and go after that group, which has already been screened to be of the right type. Application: You may want to aim for investment groups, such as investment bankers, venture capital groups, angel investors, investment clubs, etc. These groups are much safer, in that you can approach them more broadly with your materials. So, who are these “groups?” They are often companies led by financial wizards who take wealthy people’s money and invest it. (Yes, just like Bernie Madoff.) But 99 percent of these groups are good people, making money for their clients. The key is how to find and approach them. For that, see upcoming blogs.
Ok, so we got this thing kicked off. There will be more meat on these bones in future entries, so keep tuning in. We’ll talk about the right types of lures and the pros and cons of fishing with dynamite.
David Marlett is a writer and director currently producing and directing the feature film, Of Kings & Cowboys. Marlett’s desire to direct and control his own work led him to create BlueRun Productions in 2007. He’s been acting for most of his life, and is also a non-practicing (“recovering”) attorney and CPA, with 20-plus years experience consulting and managing a wide assortment of companies in industries spanning from healthcare to entertainment. The Winter 2009 issue features his first installment of a new print column, Marlett & Me, with this sister blog on MovieMaker.com.