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Great article: How to raise $5,000,000+ for film production without committing neither crime nor suicide?


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#1 Alex Grachev

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Posted 19 October 2009 - 04:55 PM

I thought I will share a great article with you on how to finance your film or TV show in 6 months.

Winning funding strategies for content producers.

________________________

Weather you are an accomplished producer or a founder of an emerging production company, in the current economy you will be solving the same challenges – how to get your project funded without selling your birth marks.
You might already have a commitment for worldwide distribution, interest from the major stars, but… no money in the pocket… Well, at least not enough to produce a decent content.
I would never claim to be an expert in the film industry, but I will put my marketing hat on and share some ideas that are not necessarily new, nevertheless few of them that might give you some hints on new ways of looking at the whole approach to financing.

Here are some items of your action plan.

1. START WITH CO-FOUNDING PARTNERS FINANCING.

Let’s say you formed a team of 5 key people with a strong business and artistic sense.
If you had any even modest success in your career (any career really), finding $20,000 for each to put as a fist installment, should not be a problem. It can be your savings, personal loans, credit cards (last one is not your best choice).
If none of those options look attractive to you, drop the whole idea of getting into a new venture and go back to school, kid. (I’ve invested hundreds of thousands of dollars in my projects and have never regretted even if the most tough times – a decade ago I immigrated from a country where one’s life’s savings could be spent in USA within few months, just to pay the bills).

So, your funding up to now: $20,000 * 5 people = $100,000.

2. PARTNER WITH A SCREENWRITER THAT CAN ADD MORE VALUE.

As you know you can do screenplay rights acquisition through royalty, equity or loan – fully or partially. Depending on the production team’s credentials young screenwriters can agree on 100% performance based compensation.
Nevertheless if the literary material is really strong and the team doesn’t deliver, for a writer it is a $500K worth lost opportunity. So be fair, consider splitting the risk.

Funding equivalent up to now: $100,000 – $100,000 + $100,000 = $100,000.

3. FUND THROUGH PRODUCT PLACEMENT.

Get your founding team, interns from film schools and volunteers on the phone and bring 10 Sponsors who can benefit from getting exposure of their newly launched product. Let each put $30,000.
Cash and funding equivalent up to now: $100,000 + $30,000*10 = $300,000.

4. HOST FUNDRAISING EVENTS.

To provide your sponsors with immediate exposure as well as to gain followers, fans and supporters, host 5 fun fundraising events in major cities.
Let’s assume that expenses for event management and marketing: $10,000 per event. Partner with large clubs that will be happy to profit from the bar sales while serving thousands of your guests. Spend on marketing wisely. Take advantage of social media (fan Page on Facebook, Twitter pages and contest, and all that jazz).
Did you know that you can sell your tickets online and advertise your events with no or minimum upfront investment via affiliate network on Pay Per Sale basis? Engage your main actors in the events – give your fans the sense of direct connection with celebrities. Don’t forget to film all your parties, then Youtube them and create excitement on social networks,

Cash and funding equivalent up to now: $300,000 – $50,000 + 5 events * 1,000 attendees * 50 donation = $500,000.

5. ENGAGE MORE SPONSORS BY OFFERING THEM ENTERTAINMENT BLOCKS FOR CORPORATE EVENTS.

Now when you created a sense of suspense and excitement around your film, bring more sponsors when your production team has some materials shot, so now you can create a draft of a trailer.
Many companies constantly organize large events to nurture their relationships with their business ecosystem: customers (new and prospects), suppliers, investors, employees. Each event has a significant enough budget to pay for various performance blocks in their program.
You can offer them something fun with participation of your stars-actors. You charge for that, but at the same time keep promoting your future film. Tell interesting stories about the film in connection to the company-sponsor (any connection can be always made as you know), show them fun episodes that will not make to the movie – entertain and match performance with messages that a company-sponsor tries to deliver during the event. Take and distribute photos with attendees and management, make them happy to develop relationships for future projects.
So, let’s assume you combined your pre-launch parties and multiple grand opening ceremonies with large corporate product lunches, conferences or other events of 50 companies, and charge each $10,000 for your entertainment block.
The sponsors can be solicited via direct sales / telemarketing or a Pay Per Deal affiliate network that markets business-to-business offers.
Also to a production team that will acquire rights to either “Anatomy of Loneliness” or “No name story“, I will gladly provide (as a bonus) a database of marketing executives (200,000 names) who can be approached for sponsorship of your next film projects. You can call to ask for permission to send your proposal and then bulk email to your opt-in list. Emails addresses will be provided for each database record.

Cash and funding equivalent up to now: $500,000 + $10,000 * 50 events = $1,000,000

6. CASH OUT ON YOUR FANS BY PRESELLING DVDS.

Now when you get the public hot and wet, presell the DVD’s with a discount and an autograph of your starts, director and other team members. It’s not only more cash in your pocket but more advertising for your future film.
DVDs can be easily marketed via affiliate networks.

Cash and funding equivalent up to now: $1,000,000 + 10,000 buyers * $5 profit per DVD = $1,050,000

7. ASK YOUR FANS FOR THE LOAN.

Get additional funding by offering your fans free tickets for the opening week (you have to negotiate with the theatres how you will reimburse them). Free tickets should not come free, of course, they will be a reward for a small loan.
The offer is as following: “Loan us $20, get it back with 2 free tickets for an opening week in your local theatre”. The beauty of this approach – no interest is paid to loan providers, moreover you add more word of mouth ambassadors to your community of supporters. Don’t forget to manage your email lists and on-line communities spread wide across the net.
This offer as well can be sold via affiliate networks. Be ready to pay 10$ commission on raised amount thou in this case. My calculation below won’t include it in the math for now.

Cash and funding equivalent up to now: $1,050,000 + 10,000 fans * $20 loan = $1,250,000.

Note:
You have just raised over a million dollars without giving away your equity.
Now it’s time to do so to raise more. Read on...

(Full article can be found here):

http://IdeaMamaAdNet...ding-strategies/
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#2 Richard Boddington

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Posted 19 October 2009 - 05:26 PM

Hmmm, well I read through that article and I'm sorry to say that 90% would never work in practicality.

I think the most valuable piece of info the author offers is this:

"I would never claim to be an expert in the film industry, but I will put my marketing hat on and share some ideas that are not necessarily new"

He clearly has never raised funding for a movie and has certainly never produced one. Most of his ideas would either 1) Never work or 2) His valuation is way out of whack.

Like this one for example:

3. FUND THROUGH PRODUCT PLACEMENT.

Get your founding team, interns from film schools and volunteers on the phone and bring 10 Sponsors who can benefit from getting exposure of their newly launched product. Let each put $30,000.
Cash and funding equivalent up to now: $100,000 + $30,000*10 = $300,000.

There is no way a group of unknowns are going to raise 300K from any group of product placement partners, not even close. Usually the product is placed in the movie for free as a value swap. Ford provides you with cars, and you in turn do not have to rent cars for the movie. The money you have saved is Ford's "cash" contribution. Ford is not going to pay to get their cars into the movie unless it's a Hollywood blockbuster and they are guaranteed a high number of consumer impressions to make it worth their while.

Smaller movies get product placement via personal contacts or as I mentioned via value swap, there won't be any cash involved.

This is just one hole of many in the author's suggestions. Plus he leaves out one of the most important funding sources available, state and provincial tax credit programs. This is guaranteed funding from the gov't and much more reliable than "HOST FUNDRAISING EVENTS."

Not much in this article that will be of any practical use I'm afraid to say :(

R,
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#3 Matthew W. Phillips

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Posted 19 October 2009 - 05:48 PM

Seems like a more likely way for a nobody to raise $5M would be if Brad Pitt happens to be your mom's best friend at churches son and he is a momma's boy who can be talked into doing a freebie role for your movie. Friendship with a big star who is willing to be in your flick is the only way I see a first timer raising that kind of cash out of the starting gate.
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#4 Sean Ryan Finnegan

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Posted 22 October 2009 - 03:00 PM

I was whole heartedly excited to read an article like this, being a film student and all. Needless to say, I was very disappointed. Even I knew most of that couldn't be done the way its described in the original post.
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#5 James Steven Beverly

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Posted 23 October 2009 - 05:07 AM

Hmmm, well I read through that article and I'm sorry to say that 90% would never work in practicality.

I think the most valuable piece of info the author offers is this:

"I would never claim to be an expert in the film industry, but I will put my marketing hat on and share some ideas that are not necessarily new"

He clearly has never raised funding for a movie and has certainly never produced one. Most of his ideas would either 1) Never work or 2) His valuation is way out of whack.

Like this one for example:

3. FUND THROUGH PRODUCT PLACEMENT.

Get your founding team, interns from film schools and volunteers on the phone and bring 10 Sponsors who can benefit from getting exposure of their newly launched product. Let each put $30,000.
Cash and funding equivalent up to now: $100,000 + $30,000*10 = $300,000.

There is no way a group of unknowns are going to raise 300K from any group of product placement partners, not even close. Usually the product is placed in the movie for free as a value swap. Ford provides you with cars, and you in turn do not have to rent cars for the movie. The money you have saved is Ford's "cash" contribution. Ford is not going to pay to get their cars into the movie unless it's a Hollywood blockbuster and they are guaranteed a high number of consumer impressions to make it worth their while.

Smaller movies get product placement via personal contacts or as I mentioned via value swap, there won't be any cash involved.

This is just one hole of many in the author's suggestions. Plus he leaves out one of the most important funding sources available, state and provincial tax credit programs. This is guaranteed funding from the gov't and much more reliable than "HOST FUNDRAISING EVENTS."

Not much in this article that will be of any practical use I'm afraid to say :(

R,


The Dov Simmen's School of film financing. :rolleyes: I actually DID try getting some local businesses interested in product placement early on with The Black Sky and did surprisingly, have some moderate success, BUT 300 grand, give me a break! I mean MAYBE if you knew the CEO of Coke Cola and they were introducing a new product and Tom Hanks was in it and he walked onto every late ligt talk show the the new and improved Raspberry Coke in his hand.....Maybe. I got the guys from Mastercool to agree to kick in a couple of grand and THAT was because we knew some people. I had a boot company interested as well. You can get product placement but his numbers are let us say, "optimistic". Presale of DVDs without a track record is ridicules. Even if you had a fantastic teaser and could get some distributor to actually take a meeting with an unknown and THEN agree to make a deal, you'd get the worst deal possible because you have nothing to bargain with other than the trailer shows potential so IF your film DOES turn out to be any good and it manages to get a theatrical release and grows legs and get a little attention, you've just screwed yourself out of any money you would have made because most of an Indy film maker's money comes from foreign markets and dvd sales. I LOVE the T-shirt idea though, that should add a GOOD 300 to 750 dollars to your funds, WOOHOO!!!
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Abel Cine

Metropolis Post

rebotnix Technologies

Willys Widgets

FJS International, LLC

Broadcast Solutions Inc

Wooden Camera

Opal

Media Blackout - Custom Cables and AKS

The Slider

Gamma Ray Digital Inc

Technodolly

CineLab

Glidecam

Paralinx LLC

Visual Products

Rig Wheels Passport

CineTape

Ritter Battery

Tai Audio