Here's my conundrum... I have a meeting with two investors. Each have invested in different film projects in the past. Great right. I have my script, my business plan, but I am not familiar with contracts. What would be a reasonable offer to accept from the investors? ROI on their investment plus 10% or 20% of the revenue after their initial investment is refunded. And do I offer a revenue % to cast or crew? Anybody out their with genuine experience in this arena?
Financing / Crowdfunding : Investor Meeting - Now What? by Brandon Keever
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ROI yes obviously...but they need a reason to invest in the first place & if they are investing all of the money up front than 10-20% isn't going to cut it. What percentage of the project are they investing in? Cast & crew are dependent on what their agents ask for. However, it all depends on how much you're paying them & how much they defer. If you have your business plan than you should also have a full budget outlining who gets paid what. So you'll need to use that for reference.
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Go with the 20% of the revenue share after they recover their initial investment...
You say that you've done this, yet you are asking this 'impossible' question! OK, I have a question for you: How high is the sky, and deep is the ocean? Do you actually have a track record? If you've produced other films created with investor capital, how did they fare? How soon was the money returned? What was the profit margin? If you do NOT have a track record, its still possible but not too likely! For openers, your business plan must be laid out with all the specifics! Otherwise no one will even bite! Good Luck!
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Have the 2 investors made money in films before. if they have then your are halfway home. Remember investors think as an investment. filmmakers think as an art. think first as a business otherwise investors won't take it seriously unless they are related to you and have lots of extra cash.
Thanks for the input Chris Johnson and Bob Willems. I have been offered an interesting deal here. The investors want FIFO, then 20% of revenue. I'm not taking on any debt for this project. They are looking at the 30% in tax credits. I just got a voicemail from a money manager that can put together the private placement. There is however, an interesting wrinkle, since each of the investors are experienced in film investing, they have asked me to meet with another production company they have both invested in before to discuss a partnership. Apparently this company has a distribution deal in place. I have the meeting set for Wednesday. I'll see what they are offering. On one hand, I want a deal. I need to create something to show what I can do, and I need this project to make a profit. On the other hand, I don't know how much I'll lost in partnering with an established production company. What would you look for in a partnership deal?