Utilizing a Trailer to Seek investors to complete Feature

[lhmaloney]

Whats up dvx world. I was in the process of filming my first feature. Its an urban action thriller which works for me because I was able to get alot of assistance based on my location (I live in michigan, which is making huge advancements to accommodate the film industry due to the fact that the film incentive program we have is attracting alot of attention from hollywood). So the film was initially suppose to be a 10k film, we completed a decent looking enough trailer based on the standards of the genre and its market (lower end straight to dvd). After recently going to a film symposium and showing it to hollywood professionals, the general consensus is to utilize the film commitments from actors (I have most popular rappers from michigan in this film other that Eminem in this film in some capacity and also some SAG actors) and the trailer to seek further investments and try and get my film @ least to the minimum required budget (50 k) to qualify for the michigan film incentive (42% return on the budget I spend while shooting the film in Michigan, which will be all of it). The issue is that I have no point of reference in securing local investors because most of them are local business owners who are unfamiliar with the industry, so while they will be silent investors, they also will expect returns on their investments faster than normal film returns. So what do you guys recommend on securing logical investors utilizing trailer, film commitments (and one's I can get with more budget) as well as a sound business plan and press kit.

 

[orangesaybananas]

The only reasonable way to secure financing is to demonstrate a business plan. In other words, you simply show the investors WHO is going to buy your film and for HOW much they will pay for it and WHEN and under what terms. However, if this a speculative production, with no guarantee of a return, rather that is technically called gambling, and not investing... I suspect that Countrywide or AIG would invest without any proof, of course

 

[lhmaloney]

Nothing speculative we're already in production, already have peaked the interest of some distributors, the issue is that i feel I can achieve alot more, and @ this point, I feel like id be settling as oppose to making a better movie. We're only like a quarter completed shooting

 

[loselectro]

Well since you have no distribution deal as of yet, then you're project is still speculative. You just need to get some deals in writing that when the project is finished, there will be someone buying or paying to screen your film. Until then, it's a chance and a risky investment for the investor.

 

[orangesaybananas]

As a person who invests in my own business, I would ask what does a distributor normally pay UP FRONT for a completed film in this genre. And, of all the films they receive for consideration, how many do they buy, what percentage of them? That would determine how much $$ I am willing to put into the production.

For instance, I work as a freelance cameraman in the corporate video business. I know that the going rate, in my area, for a complete 3 minute video with interviews and B-roll, for display on a website, is $3000 for a completed video. Sometimes, these companies are willing to pay a LOT more, depending on their needs. So, I know that the companies I work for can only realistically afford to buy an HDV-level shoot for about $500 to $800 bucks, plus another $500 to $800 for editing. That way, they can produce the video for about $1500, sell it for $3000, and keep about $1500 or so for their overhead and profit. That's how the business works.

As a freelancer, it's important to understand your market and to create a "package" that meets the clients needs and budget requirements. If I tried selling them a RED camera shoot, with a four person camera crew members ($5K+ a day) and a SMOKE online edit ($5K+) they could not profitably afford to hire me. So, they won't buy anything from me. They'll pass. And, then I still have to pay for everything. The same thing is true when you are creating a film "package" for sale to a distribution company.

So, The question I would have, as an investor, of a business, is what would your customer (ie - distributor) typically pay for your product (ie - a completed 90-minute, with "average production values for the genre", with a well known, but regional cast and crew)? Without that information, neither you nor I are certain how much to spend creating that product. Since we have no frame of reference, we do not know how much to invest.

Unless you are selling your product at the end of the day, you are not a business. Businesses sell things. Unless you know what the customer (in this case, distributor) is willing pay for your product, you are a hobbyist.

So, that is the primary answer you need to have, to secure investment, for a business.

Hope this helps!