Film Financing

Plus the credit card companies are well aware that you'll never pay that back once interest is counted. Banks are, too. Don't screw yourself over like that. I know a few people have gotten away with it, but don't be one of the countless more who don't.

The first thing you need is an entertainment lawyer. Business lawyers work, too. Then you need to register you film as a corporation. You'll have to have a business plan written up that can show how films like yours have done in the past, how you expect this one to do, things like that. Also, cut distro out of your budget at the moment. The investors don't need to know about that one. You need a distributor to pick it up later. Be honest with your pitch and plan; it could totally bomb out. Then get a list of accredited investors. They have to be accredited or you have legal issues with the SEC. Talk to your lawyer. Then you need to call every potential investor possible and ask them for money. Send business plans to anyone midly interested. Be prepared to cast their nephew in a small part.

And avoid getting started until the economy gets a little more on track, these people are worried about other stuff right now.
 
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One problem I can see is that a 60-70 minute film falls into a marketing la la land since it's too short to be considered a true feature and too long for a short. It's too long to fit into a 1 hour TV spot and if it comes out to 60 minutes, too short for a 1 and a half hour spot.

Anyways, as mentioned, don't do credit cards and put your personal financial health on the line, obviously we've heard the stories of the guys who have done it but for every 1 who did it there are 1000 that you don't hear about who are now bankrupt and their credit destroyed for a very very long time. I also would say you're going to have to wait until the econ turns around, investing in film is probably the most risky investment there is.

Eric
 
Andrew McCarrick said:
I've already done most of that. Companies formed, business plan is done, I cut distro out (I need 65k without distro). Can't afford an entertainment lawyer.

The film has no effects, nothing complex, cast is only 5 people at 100 a day. The major costs are equipment and hotels for cast, half the budget when combined.

(Just so you know, this film is not the one listed on my website.)
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Since legal is paid from the investment pool, whether you can personally afford something or not is irrelevant. If you could afford the project you wouldn't be needing to raise capital. The length issue pointed out by ZeroContent would have shown up immediately by contacting distributors even when doing minimal research for the business plan.

If you're funding something yourself, you can take all kinds of liberties with how you go about things. When you want others to invest their hard earned money, you must do your homework. The strength of your plan is only as good the background work you put into it. At this stage of things, all you should need to do is be following the plan. Its your roadmap.

A project with no legal representation or counsel is a major deal breaker.
 
Reality check time -- if you're still asking questions like that, you aren't ready to be asking for money from people yet.
 
An independant feature is routinely set up as its own company. If you wish to involve an existing production company you own, you can split the shares in the new company between your existing company and the investors.
 
Forget that. There's no need whatsoever to do that -- you can absolutely raise money and give investors no power. In fact, they should have no power. If I raised money for a feature, no investors get ANY say whatsoever in how the show runs. They are investing money in an entity that I control, it's irrelevant what percent of the total they invest. You can do whatever you want contractually, and frankly if they didn't agree to that they won't invest anyway. You think most investors know ANYTHING about filmmaking? No. If they did, they'd be investing in their own films, not yours. So if they're investing they trust you to turn out a good product and return an investment. If they don't trust you, they won't invest (which is usually the case when you're starting out), it's that simple.

Also there's nothing wrong with saying you own 51% of the company and raising money appropriately for the other 49%. For a low budget feature that's actually totally reasonable anyway -- I bring my great script, and my directing talents, and my time, to a project, you're damn right that for a $125K feature film for instance that's worth A LOT more than what the investors are bringing to the table, which is petty cash.
 
I second that your work is your investment in the film which is worth 51% of the equity of the film. say you put in 10 hours a week in pre production for a year, 300 hours for the production a few hundred more for post, call it 1000 hours of your life, at 64 bucks an hour, you just invested 64k into your film in the form of labor.
 
So you don't want to ask people for money, but you want them to give you money?

Good luck.

As with above, that's not how it works unless you decide that's how it works. You really should talk to a lawyer about this part if you're unsure. I know you said you can't afford it, but there might be one who will give a quick consultation if they think they can get paid for more later. Call around or at least do your research very thoroughly before soliciting investors. Which I guess you don't want to do anyway.
 
Congrats on getting this far! Would you mind sharing a little info on what you went through to setup the corp for the film? What did it cost you and what was the process?
 
Andrew McCarrick said:
I don't see how investors are paid back then. Almost all companies have an investor invest and then give a certain amount of equity (shares) in exchange for that money. Then the company declares and pays a dividend ever quater to those investors. The only other way to get money from somebody into a company would be debt, through corporate bonds. I don't know of any other legal forms of capital infusion.


This whole thread was intended to get suggestions on forms of financing, not how to obtain investors.
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As I said it's still irrelevant what percent of the total they are given. You are speaking of a film like it's a company when really it is not. It can legally be setup that way obviously, for tax and liability purposes, but that's outside of any agreement with investors. You can simply word a contract that for X dollar contribution, investor Y gets Z percent of the net / gross of whatever the film makes. It being a company is your business, that's to protect you, just because you own 100% of your film (the "company") doesn't mean that any other contracts you sign are somehow null and void, haha. It doesn't work that way. You can still absolutely owe other investors 75% of the profits or whatever for money they've given you.
 
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