Getting your Film Funded: Pro-Investor Models in a Changed Economy

 

The Good News? There is a lot of investor capital out there.

 

(Note: This is part 2 in a series of 6 on key industry topics trending from the 2016 Film Finance Forum East held in NYC in April 2016)

TV and Film are hot markets right now with there being more distribution models than ever. Even despite all the content being currently created, there is still a high demand and short supply!

Knowing your investor is critical. Not every project is for every investor, and not every investor is for every project, so it’s important to understand exactly what your project offers; creatively as well as the expected return. Some investors are simply focused on ROI and are going to brush your pitch away to look at the projections in the back. But some other investors, especially high net worth individuals, are looking for passion projects. Know when to go to either type.

With that in mind, look for “like-kind” investors. In other words, look and go after the investors that have a track record of investing in your type of project. Don’t expect a hedge fund to invest in a documentary on poverty, and don’t expect a high net worth individual to be willing to come up with $40 million. It sounds simply, but over and over again, the panels stressed – know who your ideal investor is and start there!

Content and Distribution Matter

In the age of social media, a hit on Friday can be a bomb on Saturday due to bad reviews. Rotten Tomatoes can be your best friend or your worst enemy. Likewise, distribution outlets are changing. Home video is out. More pre-selling of foreign rights are a must-start conversation. Understanding Tax credits and presales can take a lot of risk out of productions. Selling to Amazon and Netflix is a quick way to get a sale and mitigate risk, but it also removes the majority of the upside from a project’s financial potential.

Avoid unrealistic Expectations and Projection Models.

Your movie isn’t the next Frozen. Sorry. You can mitigate some of your financial risks by getting investors in early – but there’s a catch – expect to give up more creative control as investors will want more of a say in a yet-to-be fully defined product.

Good value to Cost Ratios are Always a Big Plus.

When approaching financing early in your production cycle consider presenting or asking the question “what should it cost?” instead of “what does it cost”. When you consider it in the context of value vs cost, a good project may seem to be worthwhile investment.

Want to know more?

Want more information about how Tax Credits can help you mitigate risk and fund your poject? Give us a call at 781-380-3520 or shoot us an email and we’d be happy to talk.

PART I: TV + Film Finance Forum East Recap