Your Money or Their Money: The Funding Game

K

Kholi

Section Moderator
I know this goes in Business in marketing, in some respect it's more than just business and marketing and it's about persevering.

We all know the infamous Robert Rodriguez story: selling blood to make his first movie.

I chat with a guy (friend actually) all the time and we get into this heated debate about financing your own stuff versus going out and finding investors. Of course, I'm on the financing your own stuff side and he's on the opposite.

I think he thinks it's easy to go out and get financing for just about anything. But, here I am wondering if it really is that easy and I just have no idea how to go about it?

So, do you save up and finance your own deals? Or do you go out and try to find financing and wait for the money to come in?
 
Well, yeah: anyone would use anothers money if they had it to produce. I'm not saying it's stupid to use anothers money.

My argument is "Why wait?". Horror stories about run-arounds, flakes, etc. Why wait and deal with all of that?
 
I'm on the same boat Kholi. You could sit around forever waiting for investors to come through (and lets face it, that may never happen for many of us) or you can jump right in and go for it.
 
I should add, I'm not talking about taking a second mortgage on your on home.
 
The people I've known who've put that kind of money into a short (3 of them I can think of off the top of my head) all got the money from their mommies.
 
Nobody but your parents would give you money for a short. The only thing I can think of, of any substance, of anyone raising money for a short was Mark Osborne's academy-award-nominated short film "More"; his pitch to his investor was basically "how'd you like to win an Oscar?" (of course, he had the skills to make good on his promise, almost -- his producer got to attend the Academy Awards and hear his name get read out as a nominee, but unfortunately for them, they didn't win). And More was shot on 65mm film, etc. And it was an idea that was ready; he'd been developing the story for something like five years, and the actual filming process took him 9 months.

So nobody's gonna give you money to make a short film unless you've got a story like that to tell. If you're making shorts, you're making 'em out of your own pocket. And that's rarely a profitable venture; almost invariably there is no revenue to be had from making shorts. You'll hear occasional clever business spins; for example, I spent $10,000 to make a particular short film but I was able to spin it into a rack of awards and a contract to write the feature film version's screenplay, so $10,000 became $60,000, but that's not all that common of a scenario either. And I had to have the $10,000 to spend to make the short film in the first place!

Using other people's money is usually a better idea, but not always for the reasons one might think. Using OPM is a huge project-validation exercise; your project basically has to have some manner of merit in order for you to successfully convince someone else to put up the cash to make it(!) Don't underestimate that... it's so easy for filmmakers to get caught up in the idea that they're making "the best film ever" yet the result is all too frequently a 90-minute pile of unwatchable dreck. If your story's so good, and your team so solid, that you can convince someone to pony up tens or hundreds of thousands of dollars to make it, then there's probably some merit to it. But look at it the other way -- if you're unable to convince *anyone* to put up money to make your story, um, maybe it's not ready? Maybe it's not good enough?

Anyway, financing a speculative venture like a film, on a credit card, is a crazy venture. You're more than likely never going to be able to sell it, which means you'll be carrying around $20,000 worth of debt for the next 10 or 20 years or however long it takes you to pay that off. OPM is a much better idea because a) the people giving you the money can much more likely afford to lose it (especially because the odds are overwhelming that they *will* lose it), and b) it forces you to be much more disciplined and prepared, with a better handle on your story and your overall business plan (else your odds of raising the money dwindle rapidly).

But raising big money for a short? Very unlikely, unless it's tied to a specific cause (like animal rights or global warming or something) and you reach a very personal chord with your patron on that particular subject.
 
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You have no idea how similar my argument was to what you JUST posted. Like, you could've just been there and said everything I just said nearly-verbatim.

This is what I was telling the guy. No name, no proof-of-work, yet he thinks you can go out and pick up thousands of dollars to make a short film with minuscule hope of return-of-investment? The very idea that someone would put up thousands for a no-name's short-film sounds far-fetched, and I can't see myself waiting around to scrounge up ten-grand to shoot something I really want to shoot.

By the way: the 20k figure was just a figure. More-or-less, he told me that this seventeen year old guy he's working with managed to get 20k for a short film he's doing. And, at the same time, acted like it happens every day. That's cool of it does, I don't see that as a likely scenario for all, which means to me pulling seven-grand (7k) out of my account to shoot fifteen to twenty minutes is my option.

I guess I could see scrounging up a few extra hundred from others that might want to really help you out, but an entire short-film budget on someone else's dollar? An entire feature budget for a no-name?

Can't see it as realistic. Then again, I've never even tried it so I have no REAL idea; it's all just speculation.
 
Hey, if he can actually do it, more power to him. Sometimes people accomplish something simply because nobody told them they couldn't.

(And tell him that if he'll raise money for my feature (and I do have somewhat of a track record) I'll pay him a commission for it too.)

I hear about things like this occasionally; someone told me they'd been given $250k by a doctor to make their film. Could it happen? I guess. The odds of it happening? I don't know, go up to someone on the street and say "I'd like you to give me $20 and you won't get anything in return" and see how well that goes over. Now multiply that by 10,000 times and see how likely it is. (btw, I haven't heard back from that guy and it's been about a year and a half, so ... )

People do exist who will invest in films. They are rare, few, far between, and usually they will only invest in films if either a) they have a personal relationship with the filmmaker, or b) the filmmaker has thoroughly established a solid and workable business plan.

(I mean, I should talk, I'm one of 'em -- I'm bankrolling a film for JDS...) :thumbsup:
 
I secured 6K for Smuggler's... which is technically a short (46 min.) but we're most likely (contract is 90% done, verbal agreement) going to get everything back, plus profits in distribution.
 
$6K from where?

And you know about counting chickens and all that. I've had millions of dollars "guaranteed", 90% done, verbal agreements, fixed dates, everything, just waiting for the papers to be fed-ex'd from this bank or that place or whatever... (and, er, I'm no longer waiting... as they say, "experience is what you get, when you don't get what you want" and I have lots of experience now! :) )

I don't know what it is about the indie film industry, but the number of people I've encountered who make outlandish promises (that they have no ability to keep) seems preposterously high. I'm a very optimistic guy, but when someone starts talking about what kind of money they can raise or deliver for films, I've become quite skeptical. I've seen it happen over and over and over and over; not just to me but to many, many aspiring filmmakers. There must be some sort of diagnosable clinical disease that these "fundraising" people get infected with.

On the other hand, I've also had the privilege to pitch my project to the guy who personally financed The Cotton Club. Here's a man with experience, loads of cash, and the actual ability to deliver. I was young and dumb and didn't have the business end thoroughly plotted out, so you can imagine how well the pitch session went. The guy didn't care one whit about what the story was, he wanted to know what my success rate was. "What have you made?" was the question; I could answer with lots of things but each answer was followed up with "and how did that do for you?" "er... well... we haven't yet sold it..." (after a couple of those answers it was really obvious as to how the meeting was going to end. Yet it was still probably the most valuable learning experience I've had in the film biz!)

There's a reason that Dov Simens says that when you're out raising money for your film, after you make the pitch, get the check. If they don't write a check right then and there, THEY NEVER WILL. If they have to "think about it", it's never going to happen. If they have to "consult with xyz", it's never going to happen. If they have to wait "just until this other deal closes", it's never going to happen.

So Brandon, best of luck, and if you do succeed in making your money back from a short, please share with us as much as you can about what your approach was and what your distribution agreement was, and what it was about your particular film that appealed to that particular distributor, etc. But until you have that check in your hand, and the check actually clears your bank, and you wait the requisite 10 days for them to make sure that the check wasn't a fake... until then, it's not real. (what I mean about the "10 days" thing is that there's a rampant scam involving fake cashier's checks; sometimes banks will actually clear a check and then a few days later find out it was a fake and they'll reverse the funds back out of your account).

Honestly, best of luck, and I'd really like to hear how this turns out if you do succeed in making your money back from a short. You would be in extraordinarily rare company.
 
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I produced my first short by moneys I generated off of Ebay sales.
I bought most of my audio equipment the same way.

Let's say you don't want to borrow, then think capitalistic, invest in something, spend the profits on your projects.
 
Extremely rare cases I've seen. That DVXuser movie that's always in the banners up top... can't remember the name for some reason. But, I'm pretty sure they've said they made their money back. They took an opportunity with a Niche market and made it work.

The Ore: not sure if they got their money back, but they did get some of it back through DVD sales. Maybe. That's no fact.

There's really no serious way to guarantee ROI. Until, well, the money is in your hand that says "Here's the return".

People do exist who will invest in films. They are rare, few, far between, and usually they will only invest in films if either a) they have a personal relationship with the filmmaker, or b) the filmmaker has thoroughly established a solid and workable business plan.

(I mean, I should talk, I'm one of 'em -- I'm bankrolling a film for JDS...) :thumbsup:
Click to expand...

Yeah, I DO know there's the possibility. I think I should just try it to see where I get and then go to plan B: Savings.
 
Barry_Green said:
$6K from where?
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Private investors.

And regarding the distribution, I guess I'll just make it public. We have a verbal commitment, and agreement with Cloud Ten Pictures (Left Behind). They're one of the bigger companies in the "faith-based, Christian" market, on the strength of the Left Behind movies alone. I approached them, and sent them a copy of the film, and they believe it has a good market within the "Christian" market. With Smuggler's it's got a niche that not a lot of films have. It is similar to El Mariachi in many respects, because RR made a film targeted at a specific market. We did the same thing, so we don't have to compete with 80mil. dollar films.

We're looking at having the final contract in hand by the end of this month.
 
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