One question I deal with on The Guerilla Film Makers Masterclass is that of investors. How do you find them? What kind of deal can you structure? What will be their expectations? How do you manage those expectations?
First, my get out of jail free card. I am not a lawyer, I am just sharing with you what I have done and what worked for me. You should consult your own lawyers before signing any contracts.
Ok… Film makers often pitch to me their complicated investment models that structure repayment schedules in bizarre and convoluted ways, asking ‘What do I think?’. I usually get them to explain the deal again as I just didn’t ‘get it’ the first time round.
In an attempt to create an ‘attractive deal’ the producers often structure an agreement that is so complex, interested parties disengage. They often reduce their own share of the returns from sales too (again in an attempt to structure a more attarcative deal), often to the point where in the real world, they may end up defaulting on their agreement because they ‘over promised’.
I am sure these complex deals make sense when conceived, but I have learned from the films I that have made, to just keep it VERY simple. So simple it can be pitched in moments. So simple that the contract is not long and scary. So simple that everyone can clearly remember the deal many years down the line.
Remember, most people are interested in you, not your film. They believe in you and want to back you, and if this film is what you are doing, then that’s what they are going to back.
With that in mind, I am sharing the contract I used for my major film project.
The Deal
This deal was very, very simple. Here’s how its structured.
1. The investors gave us the money we needed to make the film.We upplied the script, project idea etc.
2. We then made the film.
3. Then when the film was completed and sold, every penny that came through the door was split 50/50 between investors and the production company. Simple. No complex calculations.
If there were any deferrals, they would have come out of our slice (but I don’t recommend deferrals, they just don’t work in my experience – there is a much longer conversation to be had about that!).
Crucially, this money you get from people (‘investors’) is NOT an investment, it’s a LOAN. YOU ARE NOT OFFERING AN INVESTMENT.
For micro budget films where you are getting money from friends, relatives and people you know, this kind of arrangement works very well. It’s simple, clear and fair. And in my experience, people like those qualities.
So if you want a copy of this contract (MS Word format), email me (mail@livingspirit.com) and I will share a folder with this and other contracts and release forms you might find useful.
And if you want to get two intense days of accelerated film learning, remember I am running my two day Guerilla Film Makers Masterclass on June 4th / 5th. The early bird discount runs out at the end of March, so sign up ASAP if you want to come. This course used to cost £237 but I am running it this ONCE for just £60 (early bird only).
More on the Guerilla Film Makers Masterclass here…
http://www.guerillamasterclass.com
And testimonials from past delegates here…
http://www.guerillamasterclass.com/delegate-feedback
Onwards and upwards!
Chris Jones, Film Maker and Author
www.livingspiritgroup.com
www.ProductionOffice.org
e: mail@livingspirit.com
Hey Chris,
Superb work for the indie filmmaker as always and a good way to keep things simple for certain types of “investor”, although I sense the key here being that they are not investors. This gets round the legal ramifications of complying with offerings, including FSA regs, PPMs and/or the SEC in the US.
However I am assuming you have to word the offering specifically as a loan to avoid it being misconstrued as an investment offering in any way? ie terms of repayment, total amount repaid etc. In turn which means you must offer a set interest return on the initial capital and a term to repay. So although you return cash at a 50/50 split with you, that ends once they have recouped their initial capital plus say 20% for example. As opposed to an investment which would have an ongoing return.
Have I understood your idea correctly? By calling it a loan you are dealing with” investors” in exactly the same way as you would debt financing like gap. The trick being to make very sure there is no wording in a contract that could lead people to believe they are making an investment, one they cannot control the outcome of and therefore one that is protected by complicated, and expensive, securities laws.
Always been a fan of your work since the very first days and use you inspiration on our projects from most micro budget to current multimillion pics. Keep fighting the good fight !!
Mark Shields
http://www.atlanticpicturecompany.com
http://www.lvjmovie.com
Thanks pal, appreciate your words.
CJ