NEVER ASK FOR MONEY
Let me preface this article by saying I assume your project is going to cost more than two thousand dollars. If you're diligent and inventive, you can get two thousand dollars on Kickstarter or IndieGoGo by asking for it. That's a realistic goal, provided you give it all you've got. Never say never. Shame on me.
In addition, I offer these two disclaimers:
First, that I am not your lawyer or your financial advisor. None of my credentials qualify me as your official council in any business (or personal) matters, and neither myself nor Film Courage makes any warrantees whatsoever on the contents of this article. Use this at your own risk and peril.
Secondly, that I am addressing this article specifically to those filmmakers who are looking for an easy way to finance their project. When I asked the folks at Film Courage what their audience was most interested in reading, they suggested I write something about maximizing Kickstarter campaigns or working with investors. Given my level of experience, I'm always getting questions from fellow filmmakers on the subject of money - and in my experience, filmmakers are asking the wrong questions. Folks move to Hollywood to find the people who can help them realize their dream. In reality, a community values new members based on what they bring to the table. For this reason alone, filmmakers tend to approach the finance question from the wrong side entirely - and it is to these people that I write this article. If it feels like I'm lecturing you... Well, I probably am. But I do think this article will be much more valuable to most folks than another expose on pitch structure.
I'll bet you twenty bucks I write my next Film Courage post on pitch structure!
My name is Tennyson E. Stead and I'm a produced screenwriter, an award-winning director, and a former independent film finance executive with over ten years of experience. I've worked on films costing less than $300,000, and films well over $30 million.
Check out (from Quantum Theory) America Young's
Film Courage article
'Every Short Film is Too Long'
"But Tenny," you may well ask, "why would an investor EVER do what I tell them?"
That question is the reason why your movie is not financed.
Your investor is not your boss. Your investor probably has no interest in being your boss, and they certainly lack the film experience to be an effective one to someone such as yourself. Think of an investor as your ward. You are in charge of their well-being, to the extent that they decide to invest money in your project. Ask an investor for permission to spend their money, and authority is the last thing they will expect from you. TAKE CHARGE of their well-being, and you earn the money.
(Watch the video here)
Listen to Tennyson E. Stead tell his 'Arriving in L.A. story here.'
"But I don't know how."
"But that should be someone else's job."
"But I'm only interested in the creative side."
"But I can't do everything."
...and so forth. Filmmaking is a collaborative art. Driving the filmmaking process means being a leader, and leadership means taking care of your people. For better or worse, the well-being of everyone on the project is in your hands. Handling that responsibility well means everyone on the project will respect you. They'll even love you. What's more, they'll remember your attention to detail when you ask them to put their well-being on the line for something important down the road.
Check out more videos from this interview series
with Tennyson here!
Do not botch your handling of other people's well-being. Don't ask people to believe in you. Instead, ask them to evaluate your plan for looking after their best interests. Specifically, your investors are looking for an "exit strategy." Everyone knows how money goes into your project. How does the money get back out again?
If you're not point-blank telling investors to give you money... it's probably because you don't have an exit strategy, and you're hoping they'll give you money anyway. You're not meeting investors from a position of strength. Even if you do get someone to address your immediate financial need, your film is not built to succeed as a business in the long run. There's more you can do to look after the well-being of those around you.
First make a list of all the reasons, no matter how silly or irrelevant to your production, as to why movies do NOT make money. Too expensive. No distribution. Poor production value. Bad acting. Bad management. Inexperienced management. Subjective taste in general. Bad word of mouth. No word of mouth. Some science-fiction/romance/vampire movies (for the sake of argument) fail to generate revenue. LIST EVERYTHING. This list is probably at least 100 items long. Don't be thorough, be complete. Take your time, because this list will become the cornerstone of every business plan you write. This list represents all the things that can go wrong, might go wrong, or have ever gone wrong in the past.
Some of the things on this list will be risks you've already addressed, in one way or another. Write them down anyway, and then write down what you've done to handle the issue. Is your risk gone, or just diminished? Let's say you write down that some movies have bad acting, and then you make note of the fact that you've hired great actors. Does having great actors mean you WILL have great performances? Certainly not, but it helps mitigate the risk that you won't. What else can you do to mitigate that risk? Can you make the script cleaner, and eliminate any needless complication? Can you have rehearsals?
The only risks you can truly afford are the risks that are essential to your film's success. Some science-fiction/romance/vampire flicks fail to make money, so the fact that yours is one of them is a risk. At the same time, some of them do really well, and are a great deal of fun, and reward everyone involved - which is why you're making your Twilight-meets-Matrix movie. Fine.
What about the risk of distribution? Is it essential to the success of your film to NOT have movie theaters or DVD at your fingertips? No, it is not essential to have no exit strategy in hand Can you get a commitment from a distributor? If and when you do, how much does your film make off of every ticket or DVD? How many of these do you need to sell to make the investor a decent return on investment?
Every item on your list needs this level of evaluation. Brace yourself, because this process is going to take months... or even years. This process, by the way, is exactly why nobody wants to produce your movie. No sane person likes doing this kind of work, or this much of it. This is the price of independence.
This is also what people mean when they talk about developing a business plan.
Keep in mind that your investor is not putting their well-being on the line with you for the chance to make their money back. Never investing in the first place would accomplish the same thing much more quickly, so do not approach your exit strategy in terms of breaking even. Indeed, your investor does not want to see the same kind of profitability from you that they can make in their stock market investments, because you're exposing them to a lot more risk. You told them you can make them a great deal more money than they can possibly hope to make elsewhere, and you need to offer them a realistic plan for doing so before they cut you a check.
Specifically, you need a rock-solid plan for making your investors at least 200%-300% on what they invest. What I mean by a rock-solid plan is this: Rather than talk about festivals, Netflix, and how much money Avatar or Paranormal Activity made, you need to be laying out how the growth of your YouTube followers (or whoever out there is watching your work) can provide a base of support for whatever your distribution plan actually is. Break down your audience in terms of how much it needs to expand to meet your needs in tickets sold, DVD's shipped, foreign licensing, cable deals, and so on. Then, you need to show them how that distribution plan specifically works, who's paying who, how much is paid, how it all adds up, who has their fingers in the pie... and finally, how enough money makes its way back to the investor. When a plan emerges that allows you CONTROL over whether your investors make their 200% or not, you're on the right track.
Then, you need to produce the evidence that proves what you're proposing can actually be done. Showing an investor market data is not about "that old razzle-dazzle", so much as it's about proving that you're not crazy or reckless. Prove that normal human beings with the proper training and experience can execute your plan, and find success at the end of it. Give them market, management, and product. There will be no aspect of an investor's concern that falls outside these three categories.
Imagine for a moment that this process is handled. Imagine being someone who can speak with confidence on every subject covered by this article. Now imagine asking an investor if, pretty please, they'd be willing to give you a chance and put some money (Maybe? Please?) into your film.
Not bloody likely.
Not a chance.
Instead, you'll ask that investor if they understand what you've shown them. Then you'll tell them to take out their checkbook. Getting money from investors is the easiest part of the process. Just tell them to give it to you. Eventually, someone will.
Unless you're not prepared to demand it. Get prepared, tell them, and take care of business. From that position of strength and security, you lay the foundation for your future and the well-being of everyone involved in it.
If you'd like to find out more about me, my ensemble, and my stories, we welcome you to our online community at 8sidedforum.com and please, please support our upcoming feature, Quantum Theory. Quantum Theory is the story of two brilliant, goofy, passionate women of science who invent a technological means to alter and shape the very universe itself... until a defense contractor with unlimited resources steals it right out from under them. Their struggle to get it back will literally change the world. You can find out more at here and at Quantummovie.com.
Tennyson E. Stead is a writer, director, and producer of film and transmedia. In his childhood, he spent all his time building cardboard spaceships and rescuing his sister in them. These days he does basically the same thing.
For any production to realize its full creative and financial potential, every creative element must reflect the overall goals of the project. Every great collaborative work was produced by a team of talented people, united by a common intent.
8 Sided Films and the 8 Sided Forum represent our collective stewardship over the stories born from intent too multifaceted, specific, or unique for studio production, and our commitment to honoring that intent as the foundation for a more personal relationship with our audience.
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Check out Tennyson’s prior Film Courage articles
Check out the interview with NoFilmSchool.com founder and Filmmaker of the upcoming film Manchild (and Goodbye Promise backer) Ryan B. Koo, who took time to speak with us via Skype about our online release