STEP 1:
THE BUSINESS OF FILM
“The not fun stuff!”
First and foremost filmmaking is unfortunately a business and therefor should be approached as such. This is a conundrum for the artist within in us but is a duality that must be understood from a producers standpoint. An artist creativity combined with a great business savvy is a recipe for success, so learn to combine the notions in all aspects of your creative process and the path to greatness becomes a bit more visible. So bite the bullet artists, start crunching some numbers, and get your movie made!
Financing the Lasagna
“Money don’t get everything it’s true, but what it does get I can use…”
Now that you have budgeted and know how much money you will need to make the Lasagna, where is it going to come from?
You have a few options on the table. Because you will hopefully need no more then $5000, this should not be the most difficult thing in the world to come by.
OPTION #1: Pay for it Yourself (s)
This is your best option if it is possible. Save for it or put it on a credit card, but either way if you are going to put up the money offer yourself(s) the same thing you will offer outside investors, a flat 200% return on investment without equity points and paid before equity partners sharing begins. This goes for any or all of your crew that is willing to put up some money for the greater good.
Check out How I Financed My First Six Feature Films by Hunter Weeks @ Film Courage
OPTION #2: Crowd Sourcing
This is a great option because it requires no investor payback. But, can be essentially getting money from the family and friends of everyone involved on the project through online funding sources, such as GoFundMe, IndiGogo, Kickstarter, etc. They all have similar options and work basically the same way, are all a bit different I payout and percentages, so do your research on which option would work best for you.
You will need to do several things when crowd funding. Start a blog, post to that blog and connect it to your chosen funding page as well as all your other social media sites. Make a short and punchy video that highlights the project, feature the key players that are involved, what you are trying to accomplish and what type of gifts they will receive for helping out. Keep it short 2-5 min max! You can make and add more detailed videos to you pages as you go, in fact you should.
For more info on crowd sourcing please see: Crowdfunding – How To Build A Successful Campaign its kinda boring but helpful or check out How to Crowdfund to Raise Money Or Crowdsourcing and Crowdfunding Explained on YouTube and Watch This Before You Launch A Crowdfunding Campaign – A Film Courage Filmmaking Series
OPTION #3: Investors
If you have the means reach out to any rich people you may know who may be interested in making a small film investment, do it! This can be anyone you or any of your crew may be able to get a meeting with. Family and friends aside, I recommend first reaching out to tried and true classics such as Dentists, Lawyer’s, Local Business owners Car Dealers, and gamblers – people who like to take risks are always a good bet, as the film business is in itself a gamble. Here is a great article on investment: How To Access The Secret Film Investing Club
Because you are asking for so little money, it is a good idea to make a fixed deal on their investment, therefore you and the rest of the equity partners need not split up any more of the films points. A 200% Return paid before all other moneys go out, and Executive Producer credit, is a nice deal for a $5000 dollar investment with a $15,000 dollar ROI over the next 2 years.
You are going to need to pitch the project in an extremely professional way. Make them feel comfortable in your ability to get their money back, prove to them that you will actually see the project all the way through and that the people involved have the talent to produce a Hollywood looking and sounding feature film. Make them love YOU the STORY, and the PROJECT itself!!
Make a small business plan. Sign investor contracts. (I have provided templates on the website) but also check out sba.gov/writing-business-plan, and
If you already have a nice looking website with everyone’s bio’s and links to their work, the projects mission statement and cool videos, you may be able to get by without the business plan depending on the type of investors you are trying to interest.
Check out a great documentary Film Finance – Raising Money For A Movie – A Film Courage Filmmaking Series for a great look inside getting films financed.
And a great website for serious film investment @ Slated.com
LLC’s
“I’m a real boy!”
Form a Limited Liability Corporation. This is actually something that you have to deal with if there is actual money involved. So, I thought I should get the un-pleasantries out of the way now.
Check out Legalzoom.com Or Incfile.com, but make sure you get the larger package’s that include all your government forms and ID numbers.
Weather or not you end up selling your film, or releasing it digitally on demand in one form or another, if the film is about to make money, that means you and all of your partners are as well. Therefore, taxes are involved. It is in the best interest of everyone involved to become a partner in a limited liability corporation. Then, let the “company” pay out it’s “employees”. You will have money at this point so get an accountant to handle the details. This part is not free, but won’t cost an arm and a leg either, around $400 dollars to set it up completely. If you do this properly no one will have Uncle Sam beating down the door later on.
Check out Advantages of an LLC | What is an LLC? And FilmSkills.com – How to Start a Production Company
When choosing the name of your company it is traditionally the name your production. EXP: My Movie, LLC. an umbrella company of your production company My Production Company LLC. You do need to figure this out now so you can use it in all your contracts. It wouldn’t hurt to check for domain name availability for the films website before making the final decision either.
Equity Partnerships:
“We’re all in this together!”
An equity partnership basically means that people own shares of the film. Think of it in points, there are 100 points or 100% of the films ownership to spread around. You will divide and allot points based on the percentage of investment, be it money or in this case time.
To be absolutely clear time is money, therefore you must divide the points accordingly, but everyone will share in a piece of the pie, that is partly why you want to keep your crew small.
So, I will attempt to give you what I think is a fair breakdown based on my ideal crew needs, which I will explain in more detail later.
EQUITY POINT BREAKDOWN:
(Based on assumed work load and sale at $100,000)
Executive Producer: 10= $10,000
Producer: 10= $10,000
Line Producer: 8= $8,000
Director: 10= $10,000
Assistant Director: 5= $5,000
Cinematographer: 5= $5,000
Camera Operator: 2= $2,000
Assistant Camera: 2= $2,000
Assistant Camera: 2= $2,000
Sound Supervisor: 5= $5,000
Sound Assistant: 5= $5,000
Music/Score 5= $5,000
Art Director: 2= $2,000
Art Assistant: 2= $2,000
Editor: 5= $5,000
Colorist: 2= $2,000
Screenwriter 5= $5,000
Actor Allotment: 15= $15,000
100 points
Of course many of these roles may be, and should be combined if/when possible. Points may be divided as you see fit.
So what about money that is spent on production? All invested moneys by any partner shall be repaid before all other payments and receive a 300% flat return on the investment per rata at the time of sale or over a 2 year period before equity share amongst crew would begin. That means $5,000 investment would return at $15,000 flat. If Crowd sourced no moneys need be recouped before all equity payments begin.
CONTRACTS
I can’t stress how important it is to have solid contracts signed. Each partner of your film will need two separate contracts.
- Equity Partnership Contract:
This contract will detail the equity share the partner will receive for work performed – A master agreement with a full breakdown of all parties involved may be signed by every partner a declaration of independence if you will!
- Specific Employment agreement:
This contract will solidify dates, times, and the obligations of work to be performed. Each agreement should be individualized based on the position.
Remember each contract should be signed to the name of the LLC you have previously chosen.
Register or Log In for a full list of downloadable and editable contract templates.
You’re Welcome!
