FINANCING YOUR INDIE FILM

CATCH 22: Without NO contract and NO offer in place, it's highly unlikely any "A" list actor would ever be attached to any project. If an "A" list actor was attached to a project, the project’s producer would likely already have all his funding.

The majority of new media films are still funded through friends, relatives or a wealthy patron familiar with the director, actor or screenwriter’s work and potential. The source of the venture capital is usually willing to lose whatever money he advances and has enough in reserve so that he will not be affected by its loss. He knows that well over 95% of all independent new media digital films made lose money and cannot find distribution.

When writing a business plan for your film its wise to mention films like El Mariachi, Napoleon Dynamite, Saw, The Blair Witch Project, and My Big Fat Greek Wedding as examples of independent films that hit the box office jackpot.

READ MORE - http://www.independent.co.uk/arts-entertainment/films/features/film-studies-the-az-of-how-to-lose-money-in-hollywood-587570.html

©2009, Stanley N. Lozowski. All Rights Reserved.
Copyright 2008 Independent News and Media Limited

Beware the fake “ANGEL INVESTORS” and Representatives

A filmmaker wrote me yesterday to report that he lost $250.00 to a
"representative" for "investors". After that lesson he was wondering if he should give 10% of the money to finance his film to give to someone else, who would arrange to finance the full film.

There are many legitimate agents and representatives. These people need to get paid. As a general rule these professionals will not ask for money upfront. That does not mean there could not be real expenses in promoting your project. However they are not compulsatory.

Isn’t it great when you are trying to raise money for your film project and people say, "I MIGHT give you a lot of money for your project if you give me a little money first!"

BE FOREWARNED: Angel groups NEVER charge a fee. By nature, these groups are looking for places to invest their money and they are very open to looking at what you have without any advance on your part.

If someone representing you to any group has to "approve" you by charging you money up front to cover due diligence, to make a presentation to the investors, to submit your application, to preview your project or for any other reasons, understand that without a contract that specifies what will happen and when, it is impossible to know what you are getting or if and when your project will ever move forward within any group.

If you insist on paying money up front, everything must be spelled out in a legal binding CONTRACT. If a contract or retainer agreement doesn't say what will happen and WHEN IT WILL HAPPEN, NEVER PAY MONEY to ANYONE UP FRONT whether they are a "reputable" attorney or not.

WHO IS FUNDING YOUR FILM?

Be very careful when asked to advance money or escrow money to any company or executive producer that promises to obtain funding or venture capital to back your film project. This is NOT how films are financed. There are many scams out there and it is unfortunate that people have been taken advantage of in all financial avenues.

Since the market has soured, several large real estate lenders are attempting to enter film finance. While they do not ask advance fees, YES they have the money but at present, the only service they offer is to give a filmmaker a lower interest rate on their Gap, bridge and on the soft money.

In order to get their money at lower interest rates however, the filmmaker must put together his entire film and after the project is ready to go these new lenders will want up to half the project for an interest rate 6% to 7% less than traditional rates, plus fees. They obviously want to make the same money they made "flipping" houses.

After you have completed all the work, they provide a service (which depending on your circumstances might be unnecessary) and it is difficult to determine the "real" cost of their money until you are ready to accept their money. It's like going to a "closing" and you just might waste months and months in negotiations, discussions, gathering and presenting information just to find out the deal is not what you thought it would be. Exercise extreme due diligence in all such cases and do not put a lot of your valuable time into any such deals.

After many years in the film production business and having exercised due diligence on many companies who claimed to provide funding for up front fees, to date no one seems to have found any that are legit with a strong track record and yet they ask the filmmakers to have a strong track record and in many acses to "escrow 10, 20 and up to 50 percent of the money to make their film so they might borrow against it. A number of filmmakers wrote to tell me that ALL the filmmakers they know with strong track records already have financing lined up for their next films. And so, these "financiers" are left to work with film projects that have "lesser track records" which is exactly what they have.

To cash in on the growing number of filmmakers who seek funds, many "film funding" companies were and still are being founded by individuals with a history of legal troubles. Before you ever consider working with a financier, you should ask to speak with a film producer that has raised funds through this financier for a theatrically released film. And be careful working with agents, based on experience, some reputable "film financing agents" may unwittingly be promoting third parties that could be less than reputable.

There are always certain costs in doing any type of business, and chief among those are the costs of performing due diligence. These expenses should be recoupable at the closing table, not as an advance payment.

Any film financiers who are firm on their position of having prospective clients fund their cost of doing business in advance, are suspect and probably won't have much success attracting intelligent clients.

©2008, Stanley Lozowski. All Rights Reserved.

QUESTIONS about the AFM

Are you thinking about attending the American Film Market?

This November 2008, over 8,000 industry leaders will converge in Santa Monica for eight days of deal-making, screenings, seminars, networking and parties.

Acquisition and development executives, agents, attorneys, directors, distributors, festival directors, financiers, film commissioners, producers, writers, the world's press and all those who provide services to the film industry will be in attendance.

Getting in is expensive and if you are considering paying the price, make certain that your pitch is perfect and that it will stand out over and above all others. Don’t leave anything to chance. Have ready answers to any and all questions that you might be asked.

If YOU can’t answer questions about YOUR project, who can?

Be prepared on all levels. Whether you are a screenwriter or an independent filmmaker, do not carry your screenplays, business plans or any other lengthy reading materials that could be construed as excess baggage.

The people attending AFM will be swamped with reading material and this is not the best time or place to give then another hundred or two hundred pages to carry. They are there to see what's out there, meet new people and find what is innovative and what will shape the future of this industry. They are there to make contacts and eventually, cut deals.

It's totally unreasonable for anyone to think that they will take the time to read your printed material no matter how good it is. AFM is the place to entice the people you meet, build a relationship and get their interest up so they will go home and contact you and ask for additional information if your project peaked their interest. And you can always follow up with a polite phone call to see if it did.

For information CLICK HERE: http://www.ifta-online.org/afm/home.asp

©2008, Stanley Lozowski. All Rights Reserved.

"Film will only became an art when its materials are as inexpensive as pencil and paper." -Jean Cocteau

Film Investment Meeting at St. John’s University

Film Synergy leaders Brian Zen, Donald Bertrand, and Tom Lassu (Chief Synergy Architect) are making themselves available TODAY at 3:30pm for an investment and Film Financing Talk/Networking event.

The discussion will be held at St. John’s University. Tom says admission is free, but security is tight on campus, and you must register at http://zenway.us/events.

According to Tom:

"The Film Industry segment starts around 3:30 PM. The presentation is titled 'Film Synergy and the Current State of the Motion Picture Industry'; it is an overview/summary of the insights that we gained last year during the course of organizing film financing seminars."

As for the crowd mix, he says:

"The group consists of mainly Asian investors, professionals, business students, financial advisors, some Wall Street people, and a few film industry folks as well."

For interested filmmakers looking for a serious talk about investing and financing, this would be a good opportunity to network in the New York area at an event where you will receive direct exposure to industry professionals who can get you legitimate information on your next step.

Time: 2 - 6 PM
Cost: FREE (You save $30!)

Place: St. John’s University
101 Murray Street, Room 118
New York, NY 10007

RSVP required via Zenway. Questions: 646-388-0887