I’m fairly skilled at raising money. I can’t raise millions, but I can raise $200,000.00 with ease. What I’m surprised by is how rarely independent filmmakers ask how I raise money. Strike that. I’m stunned that I’ve never been asked this question.
So, let me ask the question I wish I’d been asked many times. “How does an independent filmmaker raise $200,000.00 for an independent feature film?”
I’m glad you asked! Here are the basic elements:
1.) Proven expertise verified by an independent third party
2.) Thorough, silicon valley quality business plan
3.) Ethical accounting practices
That’s it. You might say “But, you didn’t say where to find investors.” You are surrounded by them…however, if they aren’t investing in you it isn’t because they lack money. It is because you haven’t given them a reason to invest yet.
1: PROVEN EXPERTISE VERIFIED BY AN INDEPENDENT THIRD PARTY
Every new filmmaker I know is rushing to make a feature film. They rush to write it, they can’t raise any money so they compromise their vision, they rush through pre-production and they rush through shooting. Then, they slave away at post, realizing they made a colossal mess. And, they swear next time they’ll make a better film.
What they don’t realize is they’re already screwed. I mean seriously rogered. Their first feature is their track record. And, an investor will inevitably say “So, can I see your previous work?”
Choose a different path. Choose a wiser path. Consider this instead…
…make short films until you are so damn good at them that you win lots of awards at festivals. The awards are independent confirmation of your expertise. The awards tell an investor that independent third parties agree you have skill. They are confirmation that you are worth investing in.
In film school I scraped together $7,000.00 and made a terrible feature (which you will never see). It got me nowhere. Ten years later I made a short film for the same amount of money (which now had half the purchase power thanks to inflation). That short film, Saturday Night Special, was accepted into eight festivals and won awards…which lead to $200,000.00 in investment.
One of my investors found me on the internet. I had no prior relationship to the person. They read my blog on DVXuser and chose to invest over $40,000.00 in A Lonely Place For Dying simply by reading about SNS and the development process of ALPFD.
2: THOROUGH, SILICON VALLEY QUALITY BUSINESS PLAN
You can study the business plan for ALPFD here.
To be honest, it isn’t perfect. It has a few typos. That may not seem like a big deal, but I believe that typos communicate a lack of care. And, an investor wants to know you care about everything. So, don’t consider my typos proof that you can get away with slipshod work. Consider them the exception to the rule.
Most movie business plans are a joke. I’ve read twenty. They don’t properly cite sources, they make wild claims, they are far too optimistic and they demonstrate no knowledge about distribution. A business plan is written from the point of view of an investor. This should be self-evident, but considering the number of plans I’ve read it clearly isn’t. They aren’t investing in your art, they are investing in your ability to increase their wealth. Your business plan needs to convince the investor that you will grow their money.
Do not make the mistake of simply copying this plan. I’m certain that will happen, but it is a foolish and risky choice. Copying this business plan is about as smart as using my screenplay for your first feature film. My plan should be a structural guide for your own…nothing more. Take the time to figure out why each point is there and then come up with your own substitute. We have different strengths. Your plan should play to your own strengths. That’s the only way it is honest. That is the only way it has integrity. That is the only way you can explain and defend your business plan to your potential investor. Otherwise, you’ll be standing in a room saying “I dunno…but, it was in Justin’s plan and it worked for him!”
A solid business plan will take you about 100 hours to create. After your first one it will become easier. I can do a business plan in about 20 hours…but, I’ve done ten. I don’t use templates (because, they result in template-like answers) and I don’t copy other plans (because, after reading so many I was terribly unimpressed). This plan represents me. It represents how I think, how I feel, how I conduct myself, how an investor can expect me to process information and how I solve problems.
That is what an investor is looking for from you. Use your voice (albiet, the most professional version of your voice). Research thoroughly and then reformulate your research into your own words. Cite sources, be thorough and every time you meet an investor who asks you a surprising question add that to your business plan. Business plans are living documents and they should change until the moment you raise the majority of your financing.
And if this doesn’t feel like filmmaking to you…then, don’t make movies. Shoot videos with your neighbors kids. I really mean that. The majority of what we do as filmmakers has nothing to do with turning on a camera and yelling action. Steps like this is what separates the professionals from the dreamers. I’m not looking for fun when I make a film…I’m looking for fulfillment. And, like my first attempt on Mt. Everest (I climbed three hours past Base Camp A three years ago, I’ll be making my second attempt in a couple years) I didn’t do it because I thought “Wow! What a lark! I think I’ll climb the tallest mountain in the world…from the Tibetan side, which is harder!” I did it because I believed it would give my life meaning. I believed it would be fulfilling. And, every painful step…every labored breath…resulted in me reaching the first glacier two days before snowfall and I knew I had seen a part of the world that less than .01% of the human race will ever see…and at that moment the pain melted away and my breathing became easy. It was like touching God. Fulfillment is far deeper, far more meaningful than fun.
You are probably very creative. You are probably right-brain oriented. This will be a tremendous challenge for you. Embrace it. You’ll be transformed by the process…and the moment an investor says “So, how do we do this? Do I write a check?” you’ll experience elation and fulfillment…because after this your life will be forever changed.
3: ETHICAL ACCOUNTING PRACTICES
The final step is the most critical. This is where we separate ourselves from Hollywood. This is also how we make it easier for investors to invest.
Hollywood is known for byzantine accounting practices. Hollywood has never known a ledger it can’t corrupt. It cheats writers, investors and directors. From The Lord Of The Rings to Forest Gump, profitable movies are notorious for hiding profits.
Do not do that. Do not even think of doing that. As Google used to say “Don’t be evil.”
We have an opportunity to better ourselves, better the industry and stick it to corrupt corporations at the same time. We can adopt transparent accounting with third party control.
Memorize that sentence and live by it. We can adopt transparent accounting with third party control.
Transparent accounting means more than letting an investor audit you. It means they have access to the company bank account’s online ledger and can check it anytime they want. It means you’ve given them the accountants contact information and the accountant has been instructed to send copies of everything they send you to the investors as well. Transparent accounting isn’t reluctant. It is proactive.
And, third party control of profits is effortless. Wells Fargo, Paychex and a variety of banks and payroll companies offer escrow or escrow-like accounts that are controlled by an independent third party who disperses funds according to whatever rules your company establishes.
When you tell an investor that profits are disbursed by a Wells Fargo controlled escrow-like account, and that the branch representative makes disbursements based on a list of investors and the percentages they are owed the investor will lift you into the air, carry you into the street and sing your praises for all to hear. Investors are used to be scammed. Making a proactive effort to prevent fraud makes it much easier for an investor to say yes….and to love you.
The third part of this is so important that I want to write a step-by-step guide and create a vetting and validation service for independent filmmakers. Something like a Good Housekeeping Seal Of Approval. Something that says to investors “I get this. I’ve been vetted. And, my business is already set up to do this right.” I’m thinking of setting up a non-profit for this purpose and calling it Glass Book. This would allow independent filmmakers to place a logo on their business plan and say to investors “We are Glass Book compliant.”
There are vast sums of investors waiting for all of us. We have the ability to make them serious profits. And, one of the ways we can separate ourselves from the corrupt practices of Hollywood is to rise above their evil ways and embrace a higher standard. Not only is this moral, it is good business. There are so many flakes, fakes, liars and sharks in Hollywood that this simple choice is the strongest, simplest way we can separate ourselves from the pack.
Justin Evans began his first theatre company at 14 and began making films at 15. He is the only undergraduate in NYU’s history to complete a feature film while in school. Justin is the founder, former CEO & Creative Director of Mystic Arts in Beijing. He has been a film professor and art director in the video game industry. He recently finished the feature film, A Lonely Place For Dying – the preview screening of which won the Heineken Red Star at The Santa Fe Film Festival. He has been featured twice in Variety, twice in Moviemaker Magazine, and a mini-doc about his film will be airing on IFC throughout January 2009. Justin is a skilled graphic designer, photographer, production designer, screenwriter, cinematographer, director & producer and currently resides in Albuquerque, New Mexico. [a lonely place for dying maxi-single] [official blog]
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