The New Model Of Indie Film Finance, v2011.1 Investors

by Ted Hope
February 25, 2011 1:20 AM
2 Comments
  • |

Today I continue my series attempting to define the NMOIFFv2011 with a look at the individuals who make the courageous decision to back a film in this current climate. We've already determined that it is hard to predict success either here in the US or abroad with an independent film. Will an investor commit without a clear upside -- and if so, why the hell will they?!! The answer to this generally dictates whether your film will get made and certainly indicates WHO will finance your film.

When I started this series of posts I thought it would a simple and single one. I have a formula I have been using, that when I am able to follow it, I am confident that I will be able to finance my film. I want to share that with you, but feel I need to provide a little context first. My original post on the New Model Of Indie Film Finance v2011 conveyed that a film needs to make absolute sense. I then addressed foreign value and it's dictates, and domestic (US) value in hopes of helping to explain what absolute sense was. Examining the market here and abroad makes it clear that one will never be truly secure predicting the value of your film. There will always be risk, right? So what kind of individual or corporate entity will those that assume that risk and put up the equity needed for your film?

I see five types of financiers interested in movies these days:


  • 1) Those that can take advantage of Federal 181 tax provision;

  • 2)Those not only want to do well, but those that want to do good too -- these are more than just patrons of the arts -- they often look to advance the social issues as well;

  • 3)Those that need a steady supply of product, and hence are generally corporate entities;

  • 4) Those that can gain by association to the film and those involved with the film;

  • 5) Those that are looking for excitement, glamour, and glitz.


I find that investors regardless of their persuasion, have one common attribute. No one wants to look stupid or foolish. They might have different goals, but they need to be able to show their friends why your project offers a clear path to that goal. It is your job to explain it to them. Your ability to do so will greatly enhance your ability to close with them.

Investors in film generally either made their money in another field or inherited it from someone that did. Investors usually believe that the lessons they learned coming to the film biz are applicable to our industry too. Some may well be, but most film investors still marvel at the way we do business, for better and for worse.

To get a movie made often requires profound ego, bullheadness, and outright arrogance -- or else when confronted with the realities of the field, most aspirants would surrender. These "gifts" may be useful in getting work made, but they are not particularly helpful when it comes to collaboration.

Investors are filmmakers collaborators and your ability to at least appear to be ready to collaborate is helpful in closing an investment deal. Your ability to actually collaborate is going to determine what kind of experience you will have. The nature of your business relationships will effect the work you make. Understanding both your investors' wishes, expressed and not expressed, and learning how to work with them is required to close a deal and yield the intended result.

We are half way through an examination of NMIFFv2011.1 now. You have your numbers and you have your investors (or at least know what they will look like when you seem them). But it is not just numbers and willing investors that gets your project funded.

To make your film happen, there are some factors you need to inject into your project if you reasonably want to expect it to happen. Let's discuss that next, okay?

get email updates
  • |
You might also like:

2 Comments

  • John Cones | May 11, 2011 4:12 AMReply

    Ted:

    Enjoyed your article re investor motivation. Some years ago, I came up with about 12 reasons why investors my choose to invest in indpendent film, some similar to yours, some more specific. The list is excerpted here from my website at www.filmfinanceattorney.com.

    KEYS TO FINDING PROSPECTIVE INVESTORS

    By John W. Cones

    The key factor that helps independent feature film producers in finding investors or other individuals who may help find investors is investor motivation. First do some brainstorming with your associates regarding what might motivate anyone with money to invest some of it in your high risk venture. There may be others besides those listed below that are unique to a specific film project, but a fairly good list of possible investor motivation follows. Some of these descriptions of investor motivation are closely related and may even overlap.

    THE PROSPECTIVE INVESTOR:

    1. Is interested in supporting the filmmaker’s career (career support);

    2. Is enamored with the glamor of the film industry (glamour of film industry);

    3. Feels the investment has a certain amount of “cocktail chatter” value, that is, it’s more interesting and fun to talk about than most boring investments (cocktail chatter value);

    4. Wants to be able to spend some time on the set and rub elbows with the cast and crew, although this needs to be carefully controlled so that it does not get out of hand (associate);

    5. Wants to use this investment as an opportunity to learn about how the film industry works, so that he or she can get more involved in the future (learning experience);

    6. Has a son, daughter, niece or nephew who can appear as an extra in the movie (film extras);

    7. May want to appear in the movie as an actor or actress (appear in movie);

    8. May (in rare and unusual circumstances) be allowed to direct the movie (directing);

    9. May thereby get his or her script produced (screenwriter);

    10. Realizes that by investing in the movie, it will help bring the movie to a specific locale which will benefit the local economy (local economy);

    11. Is very interested in one or more of the messages being communicated by the movie (movie message) and/or

    12. Is looking at the upside potential for making money on the investment even though the investor recognizes investing in independent films is highly risky.

    Of course, enterprising filmmakers may be able to come up with other descriptions of investor motivation that could be added to this list.

    Keep up the good work.

    John Cones, Attorney, Author, Lecturer

  • Jason Brubaker | February 25, 2011 4:57 AMReply

    Hi Ted,

    Looks like I found you. Great post on indie film finance. I look forward to discussing more.

    Jason Brubaker
    http://www.FilmmakingStuff.com

Hope on social

Popular Posts