8 posts tagged “funding”
NYT has an article today on a new micro-fundraising company for artists called Kickstarter. For now, it's better than Indiegogo because they don't charge a fee. On the other hand, you can only get on their site via invitation until they pass their beta stage.
Susan Ee
www.feraldream.com
The WGA is auctioning off a walk-on, non-speaking role for the show, "Numb3rs" on Ebay. Starting bid is $1,000. Must be great to be in a position to get an actor to pay for the role instead of the other way around! On the other hand, "Numb3rs" is a recognizable show and maybe a performer might find it worth the cost to have that on his/her resume.
Now that I think about it, maybe it's not so unusual a situation. When an investor offered me $100,000 for me to make my film (which was later rescinded due to the economic crash (*sigh*, so sad)), the primary thing he wanted was to have a speaking but non-major role in the film. He loved my script and he wanted to be IN it, not just behind it. Other than that, he was willing to give me total creative control so long as I stayed in the budget... Ah, the good old days prior to the economic crash... (Waahh!!)
Susan Ee
www.feraldream.com
San Francisco Film Society is now taking applications for a sweet grant for local filmmakers. Winner gets $35,000 + a chance to get in on their filmmaker residency program for up to 6 months where they give you free office space. They'll be offering this grant twice a year. Sounds awesome. They want films that "through plot, character, theme or setting significantly explore human and civil rights, antidiscrimination, gender and sexual identity and other urgent social justice issues of our time."
If anyone hears of a grant for pure commercial thrills and chills, let me know...
Best of luck to those who apply!
Susan Ee
www.feraldream.com
I'd heard rumors of Film Arts Foundation being in trouble. Now, it looks like SF Film Society is taking over Film Arts functions. It's unclear to me whether they will rent gear the way Film Arts used to but they are taking over the fiscal sponsorship role for those of you who need a fiscal sponsor to channel your funding through. They are also launching a couple of interesting programs: grants, and filmhouse residencies. Details and applications will be published in September but it looks like there will be money and free production offices available to local filmmakers. Nice, eh? There will also be a monthly networking/conference event for filmmakers starting in Nov.
Cheers,
Susan Ee
http://feraldream.com
Got a call from the chairman of Film Angels last night. He invited me to pitch at their meeting. It was unexpected since I hadn't submitted a one pager which is the typical way of getting to pitch with them. He heard me describe my feature film project at an event and it apparently made an impression on him. My guess is that Film Angles are mostly made up of venture capitalists (VCs) who invest in the bay area's high tech startups. The VCs around here are world-class, have heard countless pitches and are generally famous for their no BS attitude. Stay tuned -- this should be an interesting ride!
Susan Ee
http://feraldream.com
Continuing with my highlights of the IIFF meeting last week, here are my notes from Daniel Rivera, an entertainment attorney regarding funding a film.
Rule of thumb -- money gets 1/2 (meaning the investors get 1/2 of the profits). Producers get about 5-10%, directors get about 5%.
Seed money usually gets preferred returns. Seed money is the first chunk of money which lets you get rolling on your project so you can fund the rest of it. Examples of preferred returns include getting 2X or 125% back; or they get their seed money back when the rest of the money is funded; or they get their money under the same terms as the rest of the investors but they later get a little more. Seed money is often in the ballpark of $15k-$25k. You can expect to pay a ballpark of $500-$750 for a basic seed agreement.
If you have someone else drum up the funding for you, you may need a "finder's agreement." A finder can't legally find money more than once so they're usually called consulting/producers agreements. These finders usually take 3-5% (not sure if this % is of the money they bring to the table or of the entire budget or they own 3-5% of the project?).
You should create an entity that's dedicated to the film such as a limited liability company (LLC). California charges about $800/yr for these. Your LLC would produce the film and own all the rights. You need an operating agreement for your new company. This will cost a ballpark of $3,500 for a basic one and as more people come into the project/company, it'll cost more to add their bit.
A private placement memorandum will cost in the ballpark of $3,500. Usually don't do these if there are only 2-3 investors.
A deal memo is used if the investors are sophisticated. These can be binding, depending on the language used.
Completion bonds are unusual unless there's a presale of your movie. An example of when a completion bond is required is when you manage to presell your movie to a foreign distributor. They will give you a piece of paper saying they will buy it for X amount -- they won't give you a check for the amount. You take the piece of paper and get a loan from the bank using the presale as collateral. The bank will then require you to get a completion bond, ensuring that you finish the film so you can get the money from the foreign distributor so you can pay back the bank. (I have in my notes that a completion bond is usually 2 1/2 - 3% of the budget. I don't know what that means -- it costs a % of the budget? Or it pays out a % of the budget?)
Whew! Got all that? That's it for now.
(note: these are my notes of what I got out of it, not necessarily what the presenter said) (also note: Mr. Rivera made it clear that this is not legal advice and that you should seek out your own legal counsel)
The IIFF panel was great. The speakers were fantastic and the crowd was small. Here are some interesting tidbits:
For indie films, theatrical release is mostly marketing for your DVD and Internet releases but worth it to the point of paying for it out of pocket if you need to. Try for the digital theatres if you can because you don't have to convert your movie into film which would be very expensive. There are about 150 digital theatres in the US.
If you're trying to raise money via a business plan, show interest in the financials because the investors want to know if you're the one who can mitigate their risks.
Your chances of making money through a distribution deal is very, very, very small because not only do you have to share revenues with everyone along the chain, you get charged for all the costs along the chain. For example, your distributor pays for marketing but when your movie starts generating revenues, all marketing costs get taken out of the filmmaker's share. One small distriubtor said they typically spend $150k on P&A (film print and advertising). The distributor basically fronts the money for you and you have to pay them back out of revenues before you see a penny. But as one speaker put it, no filmmaker makes money... except for the ones who DO. No one was clear on the odds of being one of the lucky ones.
By 2010, the IPTV market is projected to be a $1.8 trillion market, video on demand a $204 billion market. This may be where indie filmmakers want to be because the space hasn't been claimed yet.
When scheduling a shoot, keep in mind that a typical Hollywood shoot does 15-30 setups per day; a typical indie shoot does 20-30 setups per day; Roger Corman does 45-60 setups per day. Don't schedule more than a 12 hour day, otherwise, you risk having your cast and crew fall apart before you can finish the movie.
Interesting film funding panel going on tonight in San Francisco: Institute for International Film Financing Town Hall Meeting Here's the agenda:
1) Winning Angel Investments: Practical Insight & Advice for Filmmakers & Financiers — by Ian Sobieski
2) From Dream to Distribution: How a First-time Producer Got a Multi-Million Dollar Movie Funded & Made — by Paco Chierici
3) State of the Market for Indies: An Analysis of Latest Developments & Current Opportunities — by Sandy Rosenberg
4) The Economics of Film Distribution: Realistic Distribution Scenarios for Credible Business Plans — by Rob Barnum
5) Anatomy of a Film Budget: A Guide for Producers & Investors to Getting the Numbers Right — by Curran Engel
6) The Digital Advantage: Why Independent Filmmakers & Financiers Stand to Win Big — by Greg Berkin
7) Hollywood Profits: Quantitative Drivers of Motion Picture Profitability — by Thomas Trenker
