Some advice when raising money for movies, etc.

[Don Donatello]

"how investors react when they hear about producing a short film - are they less reluctant to invest?"

lets say i'm a investor ( and i have invested in some projects) .
INVEST usually means i have some risk and i may get a return ( more then i inevested) ..
bottom line for all investors RISK vs. REWARD ...
so from my POV .. there isn't much of a market for shorts .. so my RISK of losing my $$ is great .. because there isn't much of a market for shorts the REWARD would be small ...

so exactly what are you offering a investor ?

seems for shorts - ask friends, relatives for $ ...

moving over to features ... feature with no name actors , no name producers have about a 99+% chance of never making $$ .. so a investor is pretty much never going to see their $$ .. BUT for some reason persons are attracted to MOVIES and many are willing to put up their $$ for a chance to mingle with actor/actresses, spend a day on set , have their name on big screen ...

now some investors don't mind a loss - you can write off a investment loss in current year EXCEPT from what i remember you are limited to X % per year writing off a investment in a movie loss ... i can't remember the % ( seem to recall 6-8% a year write off) anyway the percent is so low it isn't worth the extra accounting time you have to do every year...

now i only give to projects that are set up as non-profit or they are under a non profit umbrella (donations are made to non profit and non profit gives $$ to filmmaker at a 5-10% fee of donated $$)
i then write off the total amount of $$ in current year = i'm happy - filmmaker is happy ... i got to give - they got to receive

[Gary McClurg]

[QUOTE=Don Donatello now i only give to projects that are set up as non-profit or they are under a non profit umbrella (donations are made to non profit and non profit gives $$ to filmmaker at a 5-10% fee of donated $$)
i then write off the total amount of $$ in current year = i'm happy - filmmaker is happy ... i got to give - they got to receive[/QUOTE]

Oh sucks Don... I was going to ask for you to invest... just kidding...

[Heath McKnight]

Here's the thing, any time someone invests in something, the USA has to make sure there are no scams. Go to www.sec.gov and you'll see a TON of laws and such from the 1930s because of the scams, etc., that helped lead to the crash of 1929.

A former student of mine's investment firm had more reviews by the SEC than most companies who DON'T do investing.

heath

[Victor Burdiladze]

ineresting information guys,
well my short is so ultra low budget(under $5000,) that I'll try not to deal with sag at this point. The reason is, that I've invested a lot of money in the equipment and if there is a little profit from the short, I'd like to share it with my crew members, but on my terms, not on SAGs.
Vic

[Andrea Miller]

hello,
I'm new to the forum, I introduced myself in the HDV section.

One of the reason I am involved in amateurish videomaking is because one of my dear friend tried to be a filmmaker.
To make a short story even shorter I'll say this.

NOBODY will ever give you money to make a money if you never made one before. I've see an amazing man with one sold script, one published novel, waste away trying to raise money for one of his script. He's a good writer, makes a living out of it, so it's not that he doesn't know how to write.

As far as I'm concerned, and he acknowledges it too, he wasted 10 years of his life trying to raise money.
Now finally he has gotten it.
But the energy he wasted cost him a lot, professionally, in stuff he didn't write, emotionally, in his relationship with his girlfriend, she's talking to you.

Unless you have a contact, a real one, an actor that can attached himself to your projet, you know a producer, whoever, do NOt waste your life trying to raise money.

I still wouldn't do the following, but I believe that emotionally it's better to borrow 50K and shoot a very low budget movie and go without a car for 10 years than try to waste away raising money.

This is not a place where I came to talk about this problem, but living with somebody who tried to find movie money was tough and destroyed a little part of my life and his, a lot.

Please, have fun with shorts, save 50K, use your own money, but if you wait for somebody to give you anything, oh my god, you will waste your life, and please, do not bother coming back at me with TWO examples you know. what matters is the number of people who failed, not the TWO that succeeded.

You have a script? Try to get an agent, try to post it on INKTIP.COM, but don't waste the precious hours of your life asking millions to people who don't need you.

[Jason J. Gullickson]

Great post Andrea,

I don't know the details of your story but I think alot of filmmakers, especially ones who are talented in a particular department (in this case, writing) don't realize that there are other people out there with their same level of talent in different departments and feel the same way. That they could make a great movie if they could only come up with the $5M to hire a writer, director, etc.

It's really amazing, or at least it was to me that in the course of a month I was able to find a confident, competent cast and crew to shoot a film who were willing to work for nothing more than the experience and credit. I think if more people realized this we'd be seeing alot more great films come out of the independent cinema space and alot less dependency on money from people who's only vested interest in filmmaking is a return on investment.

[Rati Oneli]

Andrea, you have a good point. Lots of inspiring filmmakers have great ideas, but those ideas never leave their heads because they are afraid to just go out and shoot - this is the key. Go out and shoot, write the pen and write, take the brush and paint. No matter what the budget, no matter what the conditions.

People sometimes mistake pretty images in their heads for great films. They guard those images like nuns guard virginity and after a while they are simply afraid to take a stab at those images, because it feels like offense to their sense of artistic integrity to "film" those images without the "necessary conditions" - most of the time these illusionary "conditions" inlude huge sets, titanic budgets, top crews, etc.. Sometimes, those beautiful images people conjure in their heads seem so "beautiful" that one can even doubt accomplishing them without these "conditions"... This is the worst nightmare for an artist and it is the beginning of a nightmarish journey that Andrea wrote about. But we forget one very important factor: the idea of any great work of art is SIMPLICITY. If your image is truly "pregnant" (pardon for this expression) with essense, it doesn't matter whether you shoot it on DV or 70mm film. Somehow, when you go out and shoot - camera becomes the best judge of your ideas you'll ever have (keeping in mind that you have at least a slight sense of self-criticism and self-evaluation and most importantly taste or alternatively friends whose opinion you trust)

I truly believe that if you have talent, taste, vision and a unique story and if you are "pregnant" with that overpowering wish to tell a story in images - you WILL succeed as an artist... no matter what. And if you don't succeed in financial terms, so what...? You are "pregnant" - you can't help it :) Right? If you just do it to make money, then unfortunately, we are on different pages.

Keeping in mind legal issues is very important, but but building a fortress without first having an idea where to get the soldiers to fill the fortress won't get you far. I must absolutely agree with Don Donatello in all his remarks.

P.S. I didn't mean by "you" anyone in particular :))

[Jon Fairhurst]

I recently read the first half of Independent Feature Film Production by Gregory Goodell. (Been too busy to read the 2nd half...) I recommend this book to anybody who is interested in the financing/business/legal side of filmmaking.
http://www.amazon.com/Independent-Fe.../dp/0312181175

The author makes a strong point about a "no man's land", where you are bound to lose - it's not big enough to be a blockbuster, but you spent more money than you can make back with the average documentary/slasher/gang flick.

The author also makes a point that sometimes another million bucks actually reduces risk - if you can hire a name actor with that cash, and/or up your production values, your likelyhood of making your money back (and then some) increases. The risk goes down, even though the investment/exposure goes up. That's the sweet spot.

A short film is definitely outside of the sweet spot. You can't release it in theaters, or to DVD. The only things left are the festival circuit or the 'net. Only so much return available there...

The middle ground is TV, but then you're probably looking a HDNet, Discovery, or PBS, and they want documentaries. Maybe there's an opportunity for a 22 minute dramatic short with a sports-bent on ESPN2. Or a comedy about homebuilding on HGTV. Or a food fight film on the Food channel. With 500 channels, there's certainly a need for content aside from serials/sports/news/reality/documentaries.

Goodell recommends doing research on your market, and finding out what your competition typically earns after release. Budget your production so that you make money even if you're just under average earnings for your genre. That information tells you what kind of a distribution deal you will need, and will help you in convincing investors that they can make a profit on the deal.

The bottom line is that shorts don't make any money on the back end. Given that, the only investment on the front end that makes any sense is "as much as you are prepared to lose."

[Abdulla Bastaki]

guys.. just quit. you're never going to be big shots anyway.. i mean come ON.. Seriously!... wake up! you wont ever BE a big shot director.. a big shot whatever.. cuz there are other tens of millions of guys who want to be one... so just forget it. take some accounting, nursing, business admin class... be a goooood boy and comb your hair.. and go to work like every other guy.

hehehahahaha...

THAT is the first thing i say to ANYONE who comes up to me wanting a job or looking or to hook up to someone/something. i'd then give him/her the EVIL laugh. s/he'd walk away feeling so disheartened.. as if theyve wasted their entire life on a silly dream. you just ain't good enough. when you walked in. i didnt feel that breeze.. maybe cuz its a closed room.. LOL.. but i dont care.. there was no wind.

ahhh.. what an ass i turned out to be huh?! =P

i'm kidding.. hehaha.. i'm in a crazy mood. but i've literally been there.. and my reaction to the guy who said that to me was giving him a BIG GRIN. today, he's outta business and no one hardly even recognizes him. they really despise him now. and ive worked with many production companies.. ive seen companies with management being extremely rude.. spitting on their employees.. throwing papers into their faces and calling them f-words and names... and the employees would still work with their mouth shut. ive also seen production companies who are so kind.. soooo kind.. and very helpfull.. they truly love what they do and really care for others and teach the young ones. but the key is.. hanging in there.. get facts.. the info.. the contacts. etc..
-------------------------------------
ONE OF the best ways of raising money is by working for a production company or a film quip company.. check the market out..pick a good one.. that you know has alotta good contacts. start out as the ass that picks stuff up.. make ure boss laugh.. BE COOL. you get shouted at.. cursed at.. BE COOL. slowly work ure way up.. it'll take you a while.. u'll get to know some clients.. and a better idea on how it all works.. once uve got the info on contacts... and become ure boss's little (the guy who does everything done) and it starts with the letter B. show your professionalism.. that ure capable. you DO stuff. be a do-er. be the man who gets things done. when ure at that stage.. my man.. uve got contacts.. you automatically get discounts on quip rentals.. and when ure working with a renowed prod company.. and for a prod company.. ure name is better known. so that when you decide to use some of your contacts.. they'd go like.. yeah.. that fat guy with glasses who works for.. oh cool.. yeah whats up.. he wants a meeting.. alright ill give him a shot. from then onwards.. you are seen not only as a dude with a sdream.. a wannabe.. but as someone who KNOWS his shit, who knows the drill.. who KNOWS what the market wants.. a fixed perspective is already established of you, you are looked at differently.. and u've got ure boss, ure peeps to support you, to guide you.. to help you out with whatever you want and have got. that's the way ive done it.. it was always who i knew that really shot me up.. everyone knows their stuff.. every tom dick and harry can edit, shoot, come up with brilliant ideas.. whatever.. its like cheese sandwich.. you get it from ure mom.. it tastes normal.. you eat it at a 5 star hotel.. it Feels different , and cuz it feels different.. ud think that it is better..when they are all basically the same.

so.. production companies have got contacts of clients with alotta dough.. contacts of dop's, actors, etc.. they've got the solutions.. and theyve got tonnes of reels for you to look at and decide the quality you want to acheive.. to lead, you need to follow.

[Dennis Stevens]

I know this sort of scenario doesn't happen, (or as frequently as winning the lottery)

Let's say... I run into someone who loves the film I'm working on, and offers to write a check for $1,000. I have an LLC setup, but I'm not qualified to take on investors. I am working on getting fiscal sponsorship with some non-profits, but I have no sponsor yet.

Should I tell them hold off, wait til I have fiscal sponsorship.... write the check to me personally (if they're willing) and then I put the money into the LLC's account, so it looks like my personal funds? Would that be money laundering?

Pretty unlikely scenario, but you never know.

[Dennis Stevens]

Originally Posted by Heath McKnight

Lastly, you want to designate (incorporate, LLC, LLP, etc.) a SEPERATE company with a Federal Tax ID number, because of the extra protection. Also, you'll soon learn that having a seperate company secures the fact that investors are investing in your indie film, NOT your company. Or at least the seperate company making that particular film. A friend of mine made a film without a seperate company producing it, and one of his investors said he now owned a part of my friend's company. And guess what, he did. So my friend let the company expire to get out of it and created a new deal for the film investors.

I was wondering about this - do you usually form say, an LLC as production company, or videography biz, then create a new entity (like an LLC) for each movie?

I created an LLC as a production company, and here in Massachusetts it's a $500 fee to register an LLC. For each new movie I should create another one? Is that the standard practice?

[Jacques E. Bouchard]

I realize that I'm replying to a post that's over three years old, but I thought many people could benefit from this. Since it's for the purpose of general interest, I've left out the name of the OP.

As we all probably know, artsy fartsy types staff most of these government agencies. With this in mind its almost impossible to get funding for something the general public might enjoy, the funds nearly always go to films that suit the obscure tastes of these controlling minorities. My point is, that after a year or so filling out forms and waiting around for funding, these once enthusiastic students get totally disillusioned and most just disappear back into regular work force.

I read scripts for such an agency that funds film productions. They're loans (not grants) that the producer has to pay back from the profits of the film, but commercial viability is never a major criterion in allotting or refusing funds to a project if it has artistic merit (man does not live from Bruce Willis or Steven Spielberg films alone).

However, I can tell you that 90% of the projects that get rejected have only the writing to blame. The "obscure tastes of the controlling minorities" is a boogey man conjured up to project blame, when the blame should rest squarely on the filmmaker who put more attention on imagining cool and hip visuals rather than writing a strong script.

So to anyone who has difficulty finding investors (public or private) or getting into a festival, I say forget about conspiracy theories and take a good, hard look at your writing - or better yet, get someone else who isn't your mother to do it.


J.

[Jacques E. Bouchard]

Originally Posted by Andrea Miller

Please, have fun with shorts, save 50K, use your own money, but if you wait for somebody to give you anything, oh my god, you will waste your life, and please, do not bother coming back at me with TWO examples you know. what matters is the number of people who failed, not the TWO that succeeded.

I agree with your views on funding for new filmmakers, but not your last sentence above. Most projects (commercial or independent) never find funding. People have to BELIEVE they'll be the exception, or no one would ever make movies.

So yes, by all means people, offer up examples that DID get money, against all odds. We all need the encouragement.


J.

[Jacques E. Bouchard]

Originally Posted by Jason J. Gullickson

It's really amazing, or at least it was to me that in the course of a month I was able to find a confident, competent cast and crew to shoot a film who were willing to work for nothing more than the experience and credit. I think if more people realized this we'd be seeing alot more great films come out of the independent cinema space and alot less dependency on money from people who's only vested interest in filmmaking is a return on investment.

It's not quite that simple. Great films come from experience, and you can only build limited experience by shooting projects over weekends with casts and crews that work for free. Eventually people expect to receive payment for their experience - directors and producers included.

However, I hate to see productions with inflated budgets. My last two short films were made for about $500 each, out of my own pocket and were both picked up by a distributor. I see short films that cost ten times as much to shoot in one location with one or two actors and list as many as SIX producers (exec., ass., etc.). The credits run almost as long as the movie itself. That, to me, has no right to exist because it drives budgets up by creating dangerous precedents.

Part of the appeal of filmmaking to me is creativity and ingenuity - how to get a certain shot, how to employ the visual language to tell a tale and how to stretch a dollar to do it all. A monkey can throw money at a problem, that's not filmmaking. So when I have to choose between studio space at $1,200 day, or a commercial loft at $1,200 a month, I won't take the studio even if someone offers to finance it for me - that's just obscene to me and it goes against everything I hold dear about independent filmmaking.

I think every filmschool student should have to take $1,000 of their own money to make a film and be graded on it as part of their curriculum. Teach them the value of a dollar and the importance of deciding where (and how) to spend that dollar.

[Charles Papert]

This is slightly tangential but I think it should be a good reminder to all.

Once a recent low-budget shoot, one of the three EX3's we were using was damaged (possibly destroyed--still awaiting Sony Repair's verdict). Without going into the details, there was no production insurance in place and this created some disagreement about who was liable for the damage. It will all work itself out on this one but it should be a reminder that on a production where people are helping out for little or no money and bringing their kit along, there should be an explicit understanding in place of who is liable for damage. I will go further and suggest that production insurance is very important, but it is so expensive that I imagine that many short low budget projects forego this. In this instance, it turned out that having the insurance would have been less expensive...

To those producing, remember that if you "wing it" and mount a shoot without insurance, you are gambling, plain and simple. To those who go on low budget shoots with their gear even to help out their friends, be aware that you are doing the same unless you take steps to cover yourself. It wasn't my gear that was damaged on this shoot, but I had a good $10K of my own gear there and from now on will be adopting a strict policy on a signed agreement of liability when I help out people.