I've been feeling really discouraged about raising money through investors for a film

F

filmmakerguy

Member
All the research I do is just more and more bad news saying to basically just give up. I pulled up the old Corrado thread to try to find some inspiration and left it feeling more discouraged because one thing hidden in that thread is how he actually got the money. He had connections to rich people through selling boats and got the money that way. And he didn't even get the money as an investment, they loaned it to him as a loan that he's personally liable for. I don't know anyone who's going to loan me that kind of money to make a movie.

I got 3 celebrities attached to my script, I got my script packaged and I'm trying to push it along. I'm about done with the business plan and PPM and everything and the next step is the investor search. It's an intimidating journey with little info out there on the best way to go about it for a film. A few sites encourage you to get a completion bond but I'm reading that it's very hard to get one on a film under $1 million. I need to raise $300k.

On top of that, dealing with SAG is a monumental pain. All my budget amounts have to be adjusted upwards and it throws everything out of wack. It's something nobody talks about and it seems to always be left out of the sample budgets you see online. They leave off the part of the 40% deposit to SAG. And the 16.8% towards health and pension. And the assumption agreement. And the fact that it's all based on an 8 hour day and then factoring in overtime throws you off. And I read the Corrado thread and there is this gem in there....

Now here is the tricky part: Always ask whether the actor is a corporation . I can tell you that most if not all of them are. This is relevant because you will have to pay the employer side of income tax at 14.6% if he is not.

What does this all mean? You just spent your last $30K on Joe s**t the Rag Man to be your lead, and now you realize you will need to add about 35% in fees that you MUST pay. Whatever deal you negotiate, make sure you take that into account.
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So now I might have to pay their taxes on top of their rate we agreed on. It's so damn frustrating and there is no place to turn for help. Seems you have to learn everything the hard way. They don't talk about this stuff in any books I read. There's few people that know what to do and the ones that do, are quiet on it. I'll just keep pushing forward and give it my best to try to raise money through investors. I want to put together a great team but at every level you try to improve something, you end up having to raise more money and it goes against you of actually ever doing the thing. So in the end you find yourself wanting to cut back on everything, shave as much fat off as possible. Do like Adam did with Corrado and trim out crew, take more on yourself, shoot on cheaper gear or your own gear you have access to instead of renting some badass Red package. It's that or maybe not shooting it at all. It's a challenge and a miracle any movie is ever made. Especially one with a budget and recognizable talent.
 
filmmakerguy said:
All the research I do is just more and more bad news saying to basically just give up. I pulled up the old Corrado thread to try to find some inspiration and left it feeling more discouraged because one thing hidden in that thread is how he actually got the money. He had connections to rich people through selling boats and got the money that way. And he didn't even get the money as an investment, they loaned it to him as a loan that he's personally liable for. I don't know anyone who's going to loan me that kind of money to make a movie.I got 3 celebrities attached to my script, I got my script packaged and I'm trying to push it along. I'm about done with the business plan and PPM and everything and the next step is the investor search. It's an intimidating journey with little info out there on the best way to go about it for a film. A few sites encourage you to get a completion bond but I'm reading that it's very hard to get one on a film under $1 million. I need to raise $300k.On top of that, dealing with SAG is a monumental pain. All my budget amounts have to be adjusted upwards and it throws everything out of wack. It's something nobody talks about and it seems to always be left out of the sample budgets you see online. They leave off the part of the 40% deposit to SAG. And the 16.8% towards health and pension. And the assumption agreement. And the fact that it's all based on an 8 hour day and then factoring in overtime throws you off. And I read the Corrado thread and there is this gem in there....So now I might have to pay their taxes on top of their rate we agreed on. It's so damn frustrating and there is no place to turn for help. Seems you have to learn everything the hard way. They don't talk about this stuff in any books I read. There's few people that know what to do and the ones that do, are quiet on it. I'll just keep pushing forward and give it my best to try to raise money through investors. I want to put together a great team but at every level you try to improve something, you end up having to raise more money and it goes against you of actually ever doing the thing. So in the end you find yourself wanting to cut back on everything, shave as much fat off as possible. Do like Adam did with Corrado and trim out crew, take more on yourself, shoot on cheaper gear or your own gear you have access to instead of renting some badass Red package. It's that or maybe not shooting it at all. It's a challenge and a miracle any movie is ever made. Especially one with a budget and recognizable talent.
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So did you write the script? If you have talent attached you could try to option it. If you can sell the script and have a solid reel, you never know -- you might get the opportunity to direct. Personally the idea of getting rich people to invest in your film has always seemed like a bizarre concept unless you do indeed know rich people. I'd say forget about the money and instead *get creative*. Times have changed so dramatically. Freddieview just raised around 300k (or thereabouts) by doing good cheap work and posting it online.Either get creative or figure out a way to rub elbows with rich people.
 
Now here is the tricky part: Always ask whether the actor is a corporation . I can tell you that most if not all of them are. This is relevant because you will have to pay the employer side of income tax at 14.6% if he is not.
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I don't understand this... Is this referring to FICA? Right now FICA is 12.4%, so I'm assuming this isn't what it's referring to.

By the way, have you looked at Securities laws? That'll get you down more than anything you've come across yet. You can't publicly solicit for money. You have to file with the feds and state government even if you raise money in a private offering. You have to file a audit done by a CPA (costs thousands). Among many other things before you can even legally accept money from anyone in a public or private offering. A public offering costs in the 6 figures.
 
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If it were easy, there would be a hell of a lot more great films out there. But budget constraints usually have a major effect on the story, comprimise this, that, and by the time your done, you have a film thats about 20% true to the script. Of course their are the few that squeeze through the cracks.

I wish I could tell you how to do it, or where to go for more info, but to be honest, I don't know, I usually bankroll my films through a different business I own. and it's not much in the way of funding. I do it for the love of filmmaking. And I do the regular corporate gig here and there.

It seems you have put in a lot of time on your script and getting it ready for the next step. I wish you the best of luck. I do know from experience that persistance usually wins. So my only words of advice is, DONT GIVE UP. EVEN WHEN YOU FEEL LIKE THROWING THE SCRIPT IN THE FIREPLACE AND SAYING FUKIT. STAY WITH IT. 90% of successful people fail along the way, hit major barriers, and get depressed. But they manage to get back up and stay with it.
 
Andrew McCarrick said:
I don't understand this... Is this referring to FICA? Right now FICA is 12.4%, so I'm assuming this isn't what it's referring to.By the way, have you looked at Securities laws? That'll get you down more than anything you've come across yet. You can't publicly solicit for money. You have to file with the feds and state government even if you raise money in a private offering. You have to file a audit done by a CPA (costs thousands). Among many other things before you can even legally accept money from anyone in a public or private offering. A public offering while costs in the 6 figures.
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I don't see how this could possibly be true. If you're talking about taking ads out or telemarketing for fund raising that's one thing, but crowd funding isn't held to the kinds of constraints you're talking about, and it certainly isn't true that I can't ask my neighbor to give me money to fix my car or pay for my medical bills or my trip to las begas or make my film. "solicitation" means bill boards and email campaigns. A donate button is completely different.
 
All I can say is that it is incredibly hard. You will stay discouraged if you're looking for a quick fix.
 
Brian_Rice said:
I don't see how this could possibly be true. If you're talking about taking ads out or telemarketing for fund raising that's one thing, but crowd funding isn't held to the kinds of constraints you're talking about, and it certainly isn't true that I can't ask my neighbor to give me money to fix my car or pay for my medical bills or my trip to las begas or make my film. "solicitation" means bill boards and email campaigns. A donate button is completely different.
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Donations aren't investments. A loan or equity stake is an investment... so technically, yes, asking a neighbor for money to fix your car is a loan and therefore technically falls under securities laws. Generally amounts that minute aren't regularly chased after for registration, but technically they should be registered. Also, a loan to fix a personal car is a personal loan, so there maybe other exemptions there. But dealing with business everything has to be registered. The only exemption to registration rules on loans, for businesses, is when you get it from a bank.

When ever you're taking somebody's money to put into some kind of business venture, you're offering securities. Whether that be debt or equity.

If you offer your neighbor the chance to put money into your film, you have to fill out SEC Form D (http://www.sec.gov/about/forms/formd.pdf) and more than likely a similar state document (plus a fee), in that state where the (debt or equity) investor resides or is based.

Crowd-funding is donations and not investments, so they get around the securities laws that way. That's why all crowd-funding websites say you can't offer an equity stake in the project as a perk, or otherwise offer the people donating money back/profits. If you do, you're making a general solicitation and a securities offer.



Here's a good video to watch on securities laws and film:

http://www.thestream.tv/watch.php?v=755
 
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Well, it's all about budget, isn't it? If you could make a film for $3.49, you would, wouldn't you? The problem is when your budget is $1,000,000 and you don't have it. So here's an easy solution I came up with: take the $1,000,000 and shrink it until you can make the film; this means for some they'll need to shrink their budget to $20,000, some to $11,000 (Paranormal Activities) and some may need to shrink it to $3.49. Simple. Personally, I'm setting aside just under $10,000. It'll have to be enough. Make it work.

Now, there are those who are able to go in the other direction. Instead of shrinking the budget to match what they have in their wallet, they just get a bigger wallet, by raising money. Take a look at what Zak Forsmann is doing here on this site - he just raised a bunch for his film through Kickstarter, and he of course had a lot of other advantages (his own company with film equipment etc.). Note that he isn't trying to raise the kind of money you are trying to do - but who says his film will therefore need to necessarily be worse than yours just on account of the money? Obviously, his is not the only way - maybe you can do it from other sources, investors etc. - more power to you. If you can raise $1Bazillion, I congratulate you.

But it doesn't mean anything to me, because I don't think the quality of a film is necessarily related to its budget - of course, opinions will differ... there was a long thread here about whether it's possible to even make a good feature for $10,000, and a lot of experienced and respected members of this site had utter contempt for such a possibility - I am on the other side, I believe it's entirely possible. Who is right? Who knows - do the work and lets see. I'll do my film, and if I fail, well, that'll show that I couldn't pull it off - but hey, that failure may be down to other factors than the size of the budget.

Why did I elect to shrink the budget instead of raising money? First, for all the reasons you mentioned - I don't need the ulcers... if I have my own money in my hand, I don't have to ask anybody else, makes it simple. But there is a much bigger reason: time. Let me relate to you this little thing: in the time it took Oren Peli to make his $11,000 feature, I've hung around six different friends, all of whom were trying to raise funds for their features ($300K to $5 million budgets). Oren made his movie and moved on. They are still trying to raise funds. Here's how I'm thinking about it. In all the time it's taking to try to raise funds, I'd rather be doing work on my feature. While my buddy is calling yet another uninterested investor/producer/executive/relative/stranger, I'm calling around to find the best price for the materials to build my props. In 6 months, 1 year, 2 years, whatever it takes, I'll have my movie - and my buddies will still be making phone calls and taking meetings.

OldCorpse you stupid piece of garbage - you'll just lose all your money and your idiotic film will be seen by no one and you'll be the laughing stock of all your friends, F*** OFF AND DIE!!!

Fair enough. So OK, how do I answer that? I may - and indeed almost certainly will - lose every cent I've put into this. But. I will not owe anyone else or be in debt to anyone - it'll be my money to lose. That's why I set a hard limit of $10K - it's money I can afford to lose; I could put in more, but $10K is what I can lose and sleep soundly. I may end up with a piece of garbage film and disgrace myself - so why do it? Well, let's compare this to my intelligent friends doing the responsible thing and raising the budget for their projects. What do I gain with my garbage film? I gain experience - don't laugh. In the very worst case - the very, very worst - it's the empirical proof that I have no talent and no business in trying to direct films and that I should do something else with my life. If at the end of the day, I look at my film with a hard eye and ask myself a lot of hard questions - and I'm capable of being brutally honest with myself - and I decide that absolutely, I should fold up shop and look for other things to do with my life - well it'll be totally, totally worth it. This is how I think of it - I just paid $10K for a great test that diagnosed my disease, or another way to look at it - for a mere $10K I got priceless life advice: WHAT TO DO WITH MY LIFE. Meanwhile, my friends have no test and 20 years from now, they'll still be dreaming like so many out there, their life shrinking, while I'm making a new life with a clean conscience - I TRIED. When the end comes, who is going to feel better: the one who tried and failed, or the one who never even tried? It's like cancer: the earlier you get the diagnosis, the better. I'd rather know sooner than later what to do with my life.

And of course, it may transpire that it's not so dire. In that case I'll just gain experience shooting - beats running around and begging for money. And finally - the fun factor. Everyone is different. But for me, it's more fun to spend time shooting a movie than chasing investors.

To sum up:

Sensible People Looking For Investors: they didn't lose $10K. Took a lot of meetings and made a lot of calls, waited a lot. Still waiting.

Idiot OldCorpse: $10K lost. Learned something very valuable [priceless] - either way. Had fun. Looking forward to the rest of my life - maybe even in film!

I know what I choose. You pick your choice. I'm not bagging on anyone who chooses to look for money - if you're good at it, my respects. Good luck!
 
Andrew McCarrick said:
Donations aren't investments. A loan or equity stake is an investment... so technically, yes, asking a neighbor for money to fix your car is a loan and therefore technically falls under securities laws. Generally amounts that minute aren't regularly chased after for registration, but technically they should be registered. Also, a loan to fix a personal car is a personal loan, so there maybe other exemptions there. But dealing with business everything has to be registered. The only exemption to registration rules on loans, for businesses, is when you get it from a bank.

When ever you're taking somebody's money to put into some kind of business venture, you're offering securities. Whether that be debt or equity.

If you offer your neighbor the chance to put money into your film, you have to fill out SEC Form D (http://www.sec.gov/about/forms/formd.pdf) and more than likely a similar state document (plus a fee), in that state where the (debt or equity) investor resides or is based.

Crowd-funding is donations and not investments, so they get around the securities laws that way. That's why all crowd-funding websites say you can't offer an equity stake in the project as a perk, or otherwise offer the people donating money back/profits. If you do, you're making a general solicitation and a securities offer.



Here's a good video to watch on securities laws and film:

http://www.thestream.tv/watch.php?v=755
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Gotchya. I was lumping donations and investments together.

I still think it would be extremely rare to run into an issue asking someone who you know to invest in your film assuming you have all the correct contracts in place. The guy who made My Freakin Step Dad is a Vampire raised all of his monies from relatives (80k in total) and he didn't deal with any of that. Again, I think if you're doing business-to-business relations or advertsing for investors that's one thing, but if three friends get together and lump 20K together to make a movie, any laws they might be breaking to the letter -- I'd think it almost impossible for something like that to be enforced. But maybe I'm mistaken.
 
It's supposed to be discouraging if you aren't rich or tethered to rich people.

IMO if you're having trouble finding money, like Old Corpse said, you need to shrink your budget. Also, don't mess around with SAG unless you're sure you're going to make a ton of money. By make I mean profit, by profit I mean your investment of 300K better see a 5x gain (1.5M) at the least.

So, either shrink your budget or work on another project while you're trying to raise money for this one.

I'm going to be looking for capital soon, but less than half of what you're trying to raise and we aren't going SAG this time, and a completely different approach to marketing. If I have to do it on 50K again, I will.
 
Andrew McCarrick said:
Donations aren't investments. A loan or equity stake is an investment... so technically, yes, asking a neighbor for money to fix your car is a loan and therefore technically falls under securities laws. Generally amounts that minute aren't regularly chased after for registration, but technically they should be registered. Also, a loan to fix a personal car is a personal loan, so there maybe other exemptions there. But dealing with business everything has to be registered. The only exemption to registration rules on loans, for businesses, is when you get it from a bank.

When ever you're taking somebody's money to put into some kind of business venture, you're offering securities. Whether that be debt or equity.

If you offer your neighbor the chance to put money into your film, you have to fill out SEC Form D (http://www.sec.gov/about/forms/formd.pdf) and more than likely a similar state document (plus a fee), in that state where the (debt or equity) investor resides or is based.

Crowd-funding is donations and not investments, so they get around the securities laws that way. That's why all crowd-funding websites say you can't offer an equity stake in the project as a perk, or otherwise offer the people donating money back/profits. If you do, you're making a general solicitation and a securities offer.



Here's a good video to watch on securities laws and film:

http://www.thestream.tv/watch.php?v=755
Click to expand...


http://www.portfolio.com/business-n...sses-two-bills-to-help-startups-raise-capital

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