5 Realities of Raising Capital for a Feature Film

5 Realities of Raising Capital for a Feature Film

5 Realities of Raising Capital for a Feature Film

The difficulty in raising capital for any venture is two fold: first off, the market is crowded with opportunities that are currently earning strong returns. The stock markets, the bond markets and the traditional high yield sectors of real-estate, speciality finance and lending all present solid outlooks financially.

Second off, speculation is the killer of many financial deals. Being pragmatic and logical – who wants to invest in an opportunity when the return not only is unlikely but the timeline is completely unknown?

When raising capital for a film project – even more elements come in to play. Talent, timeline, creative, multiple financiers needing to feel comfortable with the structures and scheduling.

Having raised capital many times in the past – our overview here is a sample of the realities currently presented in the private equity financing arena of independent feature films.

5 Realities of Raising Capital for a Feature Film

1. Private Equity

Private equity investors are flooded with opportunities today – with the traditional markets performing well, the venture capital sector offering incredible teams and projects and the re-emerging performance of real-estate and lending.

How do you make your project stand out to these investors?

We’d like to believe it’s as simple as a strong script, a great team with experience and a game plan for success — but it’s never that simple.

The key factor to private equity investors is to remove speculation — meaning, when are they going to start earning a return and can you guarantee that?

The more speculation you remove (by utilizing the steps below) the better chances you’ll have in securing capital assets in “hard money”.

5 Realities of Raising Capital for a Feature Film

2. Agencies

The talent agencies are a difficult nut to crack — they are well guarded, highly established and protected entities. They are the gatekeepers of taste, talent and possibility — and more than anything they are the lifeblood of the in pendent producer seeking to put projects together with financing.

Step #1 is finding a piece of material that excites you & that you believe you can rally a team behind. Remember, you’ll be living with each film you produce for many years so choose wisely.

Once you have a piece of material – get an agent/agency excited about the project as well. As with most of the entertainment business — agents think in numbers — how much will my firm/I make from this deal?

Incentivize the agency by offering them the ability to package the project — place multiple roles with their roster rather than just one or two roles — which gives them the ability to earn 10% of multiple deals across the board.

Furthermore, offer them the ability to have a first look opportunity for domestic sales representation — again, finding ways to incentivize.

By packaging these elements early on, you’ll be able to bring strong talent to the project and gear up to being more ready to approach equity players.

5 Realities of Raising Capital for a Feature Film

3. Strength of Team & Experience

A first time producer/director/star is a tough sell for many instituions in the film business.

Sales teams are unable to project value (pre-sell), agents are unable to place large name talent (packaging) and financiers are unable to gauge project ROI (basic returns).

Find a director who has carried a project before, find an agency who is interested in packaging and will keep you/your project in the stratosphere of content that matters and you’ll be in a great starting position.

If you HAVE to utilize unknown talents to make your project – surround them with experience on all fronts. An unknown star with a strong director, DP, producer and writer is a reasonable recipe.

5 Realities of Raising Capital for a Feature Film

4. Tax Incentives/Pre-Sales/Debt/Domestic MG

With your packaged talent signed off, strong team on board and well developed script — you can now approach “soft money” options.

Tax incentives are nothing new — they offer a percentage of the in-state spend back in rebate form. Meaning, you can bankroll/cash-flow this piece to off set your investors risk.

Pre-sales are nothing new — they offer projections of value based on the elements you’ve brought together. Meaning, you can bankroll/cash-flow this piece to off set your investors risk.

Debt options are nothing new — is this starting to sound like a trend?

Essentially, find ways to cover 50 cents of every dollar your investor is putting up before the camera’s even turn on.

Shoot in tax incentive rich states, with a strong pre-sold package with a great sales-team on board to execute. Therefore you reduce the level speculation and can guarantee a return of X% based on Y investment in a tangible timeline.

5 Realities of Raising Capital for a Feature Film

5. Plan of Execution

With these elements on board make your investment proposal personable, professional and tailored to your investors specifics.

Do not pitch high level film financing to first-time entertainment investors — keep it simple, above board and remind them that while smoke & mirrors often run throughout the business you’re putting together a basic structure returning X% on Y investment over Z timeline — they will respect you & your approach much more.

Lastly, look into completion/guarantor bonds as a way to assure your investors that the project will be completed on time/schedule, budget/spend and with the elements they have agreed to finance.

The liability is now removed via a bond company and their return is partially guaranteed via incentives and additional soft-money.

Pitch smart, often and confidently — knowing that you’ve done your homework and that the investment is well structured for a return.

Want to learn more from Matthew? Check out his Master Class on film financing by clicking here.

5 Realities of Raising Capital for a Feature Film

About Matthew Helderman

Matthew Helderman founded Buffalo 8 Productions in 2012, as a feature film & commercial production company growing to deliver projects to clients such as Sony and Lionsgate. Under Helderman’s leadership, Buffalo 8 has built a full library of content – touting 4 premieres at the 2016 Sundance Festival – a roster of commercial directors, a talent management division and a full post-production facility. In 2013, Helderman co-founded BondIt Media Capital to solve the multitude of financing difficulties found in the entertainment & media business — by 2017 BondIt had participated in the financing over 200 feature film projects ranging from low budgets to studio level productions. Helderman graduated with a B.A. in Philosophy with a minor in English from Lake Forest College. Helderman has been a featured speaker at the Cannes, London, and Bahamas Film Festivals as well as guest speaker at the Chinese US Business Summit.

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About the Author

Matthew Helderman founded Buffalo 8 Productions in 2012, as a feature film & commercial production company growing to deliver projects to clients such as Sony and Lionsgate. Under Helderman’s leadership, Buffalo 8 has built a full library of content – touting 4 premieres at the 2016 Sundance Festiva...

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5 Comments on Matthew's Article

S.J. Robinson
Author, Screenwriter, Content Creator
Thank you for your perspective, Mattthew. It was interesting. As an off topic note, would just like to add that while investing in real estate, for instance, may seem like an attractive option from a monetary point of view, investing in the arts offers primarily the all important "prestige" factor that investors so often seek instead... well, especially over here in Europe. To invest in real estate here, you are seen as contributing to the current housing crisis - in denying and exploiting the next generation from owning their own home (or place of work) - thus you are reviled. However, if you are a "patron of the arts", your public image is significantly bolstered, honoured and respected. I had the pleasure of listening to a European perspective on international markets yesterday and I have to agree that here on this side of the Atlantic, patronage of the creative arts is seen as an all-important part of our cultural identity. This is probably why we have so many Film Boards and Arts Councils to support the creation of films right now. In all honesty, I have been to the top of the mountain and the view is not all that great. While patronage of the arts may not always yield immediate or lucrative monetary gains, it will often yield philosophical, emotional, psychological and (dare I say) even spiritual gains, all things that money just can't buy outright. Furthermore if the passion is behind a project, and for the right reasons, it will inevitably be lucrative and be a win/win for all invested parties. Anyway, that's my two cents from this side of Atlantis ;)
7 years ago
S.J. Robinson
Author, Screenwriter, Content Creator
Hi Tim, Thanks :) I definitely think the current Darwinian dog-eat-dog win/lose economy needs to shift to a creative win/win economy. May I invite you to sign up for our magazine, I think you would enjoy it fringemagazine.net (^^,)
7 years ago
Tim McClure
Actor, Comedian, Narrator, Voice Actor, Screenwriter, Content Creator
I am drawn to your response since it is less about money, like in America, and more about the arts. I have strong scripts looking to be made. Please keep me in mind if you know investors looking for quality scripts they can feel good supporting
7 years ago
James Drago
Filmmaker, Production Coordinator, Screenwriter, Script Coordinator
Thank you, Matthew. Your insights are so valuable.
7 years ago
Mike Chinea
Director, Producer, Screenwriter
Solid straight forward facts. Covering 50 cents of every dollar an investor is putting up before you start shooting and having a thought out plan will get you to the bank a lot sooner. Great advice.
7 years ago
You do great work, Matthew such splendid insights.
7 years ago
Toby Tate
Author, Screenwriter, Producer, Graphic Designer, Musician
A lot of great ideas based on experience in here. Much appreciated. 
7 years ago
Gregory Green
Director, Producer, Screenwriter
Great info. Thank you, Matthew!
7 years ago
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