People invest in ambition, integrity, honesty, passion, hard work, experience, planning… do you have it?
Getting cash for your movie is not as hard as it first seems, so long as you are reasonable in your proposition, good at networking, can answer a few challenging questions and can also fearlessly convey your passion for the project, and your determination to make it work.
So how do you attract investors? The conversation with an investor always includes one simple question, and this is the crux of whether you will get financed or not. They will ask… ‘…yeah, but what are the chances of success really?’
When asked about investing in my films, I usually describe the proposition as this. ‘There is a 50% chance you will lose your money, a 30% chance you will get some money back (not all of it), a 10% chance you will get all of it back, a 9% chance you will get all of it back and a good return too, and a 1% percent chance this is the next ‘Paranormal Activity’ that made $millions.’
I may also slip in that ‘the 1% chance is probably an over generous reflection of the odds, it’s likely to be less. But success IS possible…’, and look how passionate, knowledgeable, honest and prepared I am… I am starting to look more and more like I AM that 1%!
Friends and family wont really care too much if they lose money, a cash return (while part of their strategy) is not their primary reason for giving you money. They are in essence buying a lottery ticket. It’s a cost effective thrill ride for them, one that will make them feel good and might, just might, make them some money.
People investing real cash for real returns may well be seduced by the fun of the project (come to set, dinner with actors, come to the premiere etc), but they will also keep coming back to the bottom line.
You can mitigate their fears by employing the EIS / SEIS / tax credit schemes to guarantee a return (usually around half of their investment depending on how you structure your deal).
You can also get a distributor to contribute to your presentation or investment package – there is nothing like an expert backing up your claims to convince a sceptical audience / reader that your project is sound (your claims can also be a backed up by experienced crew members, actors, even other investors).
If you don’t know anyone who can back up your claims, find data that backs it up – the BFI yearbook, quotes from experts pulled from books (always quote your source as it lends credibility) for instance. You can also make phone calls and ask for quotable facts (‘Horror sold well at last years Cannes’ by XYZ sales agent for instance). Bottom line, do your research and convey these bullet points with authority.
People are more afraid of looking stupid than they are of loosing money
It sounds crazy but it’s true. Looking stupid is feared more than loosing money. So offer people information that gives them comfort – the EIS tax rebate, film credit, expert endorsements, market endorsements, past film successes in the same budget area and genre etc. If the film stinks, at least they don’t look stupid having secured at least a 50% return guaranteed.
And number one, be passionate, but don’t be a crazy person by making crazy claims – I have seen people compare their micro budget rom-com to ‘Four Weddings’ for instance. Not only is it a ridiculous comparison (at £20k film without the stellar cast and a Richard Curtis script), it’s also woefully out of date. Be relevant and current.
I have also seen people crash and burn by allowing their enthusiasm and self belief (usually not backed up by evidence) push them into making wild claims that are simply ridiculous. If an investors gets involved with that sort of project, they may well end up looking stupid… and we know what that means to investors!
Who are the investors, who might get involved and why?
Friends and family
They want to see you succeed, they believe in you and trust your judgment. They also have rose tinted glasses too and for most of us, they are not wealthy so cannot invest very much. Friends and family should only ever be involved in either micro budget productions or seed money for bigger productions. Where possible, don’t mix business and pleasure / family with large amounts of risk. It’s a BAD idea.
Friends of friends-and-family
Again, they want to see you succeed and may get involved because it seems like fun. Ask any successful crowdfunder and they will tell you how they gained loads of new ‘friends’ simply by making the film and using social media to raise money. You may also come across wealthier people this way too – 20 friends and family will know 100 people each, that’s a possible pool of 2,000 people! That’s good odds for finding someone with deep pockets, someone who has been introduced to you by a friend or family member.
Rich people you meet or get an introduction to
Once you get past your fear of talking to strangers, you will find people all around are receptive and interested in your project, and that money is everywhere. You will learn to spot the signs of wealth and hone in on people and small groups that could be cash rich. These ‘strangers’ tend to be more interested in the bottom line because they are not yet invested in you or your journey. Often you will create relationships that take years to work out. You may need to make a film or two in order to prove you know your stuff, before that one big investor takes the gamble. Build relationships early.
There are places you can go where high net individuals gather to meet entrepreneurs to finance speculative projects. Just Google it and you will find ‘angel investor clubs’ in your area. You can even create this environment yourself by hosting a party for the wealthy – you can screen trailers or past shorts, speak passionately, answer tough questions honestly, bring along some talent… it does work. And there is nothing like seeing one person put their money where your mouth is to start the investment domino effect.
Usually people who support your crowdfunding campaign are made from a high proportion of friends and filmily (at first at least), but can also be random people who just like you and your project. In my experience, big contributors can often come in this way too. Crowdfunders are not investing because they want a cash return, they want something else such as a credit, s feeling of contribution, access to exclusive content etc. You MUST think of them as investors and deliver on your side of the agreement. Treat them well and they will keep coming back, and crucially, this group will expand over time.
Cast and crew
Think of your cast and crew as investors too. They will be contributing their time and expertise in return for something – maybe they want more experience, a clip for their reel, a credit, a relationship etc. Either way, treat them like investors in your project.
So why would people invest?
Why will an investor give you cash to make your movie when everyone knows film is a VERY risky proposition? In my experience, people invest because a few factors.
They like you, and they believe you can pull it off
This is where you passion and past experience come into play. Watch ‘Dragons Den’ and you will see this in action. If you can speak with enthusiasm, back it up with statistics, show past successes and convey massive commitment, you are in a great place. Most people invest in YOU and not the project. And everyone loves to boast how they discovered you.
They like the project
People also invest in things they like or would like to be a part of. Zombie movies, rom-com, thrillers, documentary – all projects have different interest levels from any one person. While taste is important, above all, they want to see you succeed and see their investment bear fruit. Remember, their investment may NOT be entirely about cash, it may be to see you succeed or for you to promote a cause. Having said that, NO-ONE wants to flush cash down the toilet if they feel they could make a return. No-one.
They are investing inside their comfort level
Try to ensure that people invest sensibly. Don’t get relatives to remortgage homes for instance (I have seen that happen and it never ends well). People should only invest what they can comfortably lose or gamble. Many people on the upper tax threshold may well be able to gamble a few thousand, especially when they know around half may be guaranteed by the EIS / SEIS or UK Film Tax Credit. Bottom line, if people can afford it, they are much more likely to do it.
They are knowingly taking a large risk and comfortable with that
This begins with you being straight about the odds. Ironically, being honest about the chances of failure actually increases your chances of investment. I know it seems counter intuitive, but it’s about them feeling confident that they are fully informed and that you are not a crazy dreamer.
Every year people get funded to walk up Mount Everest. That’s an insane proposition where people die regularly. In backing such a crazy endeavour, part of the investor goes on that journey too. But… no-one would back an inexperienced walker who fancied giving it a go, who had done a bit of research on the internet but that’s all. If I were to back such a venture, I would want to see photos of them at Everest basecamp, showing they had been there. I would want to see people who had made it to the summit included in their team. I would want to see industry support from a hiking company, someone endorsing this adventure. It’s still hugely risky, but I feel I now know the odds, and perhaps more importantly, THEY know the odds.
They can get some assurance that they will see returns
EIS / SEIS and UK Tax Credits can offset some potential losses. It’s VERY powerful to be able to say ‘invest £10k now and we can give you £5k back guaranteed’ (depending on how you structure your deals). Whether it’s worth your time setting up a company and jumping through the EIS / SEIS hoops is another question though (see our upcoming workshop on the EIS here).
People you meet on the journey will give you cash
Once a film moves from an idea to an action, to it being made, people who have been sitting on the fence are forced to decide one way or another. Once you have something to show, so long as it is good, people become attracted to you and your film. This is a very powerful aphrodisiac to investors. And as film is such a crazy endeavour, we often find ourselves in unexpected places meeting new people. These chance meetings, when you are at your most exhausted but also your most passionate and vibrant, can often lead to new investment too. Keep your eyes open at all times.
Ask and you will receive
Perhaps the most simple piece of advice is to ask for money. I am amazed at how many people fail to do this. I also wrote a blog called Top 18 Strategies and Tactics To Get stuff Free or Massive Discounts – READ HERE
Why they are not investing
Here’s the elephant in the room. No-one will invest in a film because it sounds like a great deal. To suggest that it IS a great deal may go some way with friends and family who are naïve, but anyone with real cash will look at you like an amateur. We mitigate the chances of losses by using schemes like the EIS, by getting top talent (actors), working inside known genres that sell, partnering with industry (sales agents and distribs) and then adding ambition, integrity, honesty, passion, hard work, experience and planning.
Onwards and upwards!