Why there’s more to vetting investors than Net Worth

I live something of a public life, and as such I try to keep tabs on what comes up when people google my name.  I generally do a thorough search on myself about once a month.  A few months back I found a link from a site that specializes in estimating the Net Worth of celebrities and other people in the public eye.  They estimated my net worth to be about 12 million dollars. As much as I’d like to tell you that’s true, it’s not.  At least not yet.  So here’s why you should be careful in trusting Net worth estimates.

Edit: This site has taken down that page, and while I thought I had screencaps, I don’t.  

If you want me to invest in your movie, read this

I have a feeling posting something on my film services site that says I’m worth 12 million dollars is going to get some investment inquiries, so let’s get this out of the way before we continue.  

I don’t personally invest in projects beyond recoupable distribution expenses.  If I do early-stage fundraising for clients, it’s only AFTER I’ve worked with them and developed a working relationship with them.  That being said, I get the distinct impression a lot of people just skim my articles.  So I’m including a big button below that links to my official policy on investing in people’s projects who contact me cold via social media.  Those who skim my articles probably won’t like it, but I have to find some way of dealing with the near-constant bombardment of investment inquiries.  Click it, you might get a laugh.

In the rare cases I do act as a conduit for investment, equity investment is never the first money in.  It’s often not the last money in, but it’s definitely not the first.  If you’re looking for me to invest in your film, it’s probably not going to happen.  I’m more likely to help you set up your investment documents.  

Related: The 9 ways to finance an independent film.

Net Worth isn’t as important as you may think.  

So getting back to the meat and potatoes of the article.  Net Worth probably doesn’t mean as much as you may think.  The way Net Worth is calculated is pretty simple, you list your assets and calculate a value (Home Equity, Stocks, Bonds, Other investments) , then you list your liabilities (Debt of all kinds) then you subtract the value of your debts from the value of your assets and you’ve got a net worth.  

The important to realize about this is that the majority of the assets I listed above aren’t what investors would call liquid capital.  That means that in most cases, only a small portion of your net worth is spendable.  There are ways to liquidate such assets without selling them, but that generally requires some level of loan and implies interest.  For a bit more on that, check out the blog below.

Related: One Simple Tool to Reopen Conversations with Investors

So let’s look at my net worth as an example.  First off, I have no idea where they got the 12 million dollar number.  Even by the most generous valuations of my assets, it’s off by at least 3-4X.  But even going with that generous valuation of my assets, most of that would be tied up in equity between Guerrilla Rep Media and ProductionNext.  There’s not a whole lot I can do with those assets to liquidate them.  Even if I could, it’s unlikely I would as I don’t think the asset is completely mature, and selling off shares would be unlikely to help me.  This is actually a pretty common problem for investors and High Net Worth Individuals (HNWIs) and it’s something you should be on the lookout for when you’re vetting your investors.

Related: 5 Steps to Vetting your investor

It’s Not Money until you can buy beer with it

I’m quoting someone, but I’m not sure who.  But in essence, just because someone has a high net worth doesn’t mean that they’re going to be willing or even able to invest in your project.  If someone derives their net worth from owning a couple of multi-family homes and drawing income as a landlord, then even if their net worth is several millions, their assets are tied up in real estate and harder to access than you might think.  

The only metric that really matters when courting an investor is how much investable capital they have at their disposal, and that’s a very different metric than their net worth that’s harder to pin down. 

Thanks for reading, if you enjoyed this blog, I’d recommend you check out my mailing list for monthly blog digests., a free investment deck template, a free e-book, white paper, and a whole lot more.  Click the button below for more information.  

3 Things Every New Film Investor NEEDS to know

I write a lot about the film business with filmmakers as a target audience.  However, in my non-educational content job, I have to interface with film investors on a fairly regular basis.  This blog is adapted from one such situation where a first-time film investor had a lot of impulses that might actually hurt their film.  The response got rather lengthy, so I asked my client if he minded if I adapt it into a blog.  The client didn’t mind at all, so now I can share the insights with him with significantly more people.

With that in mind, here are 3 things that every new film investor should know. 

1. Films are not evergreen.

Once a film is more than a year past its initial release, it loses a significant portion of its perceived market value.   Buyers just won’t touch it.  You released the film this year, so you have a bit of time, but that time is not infinite.  This means that negotiations around a minimum amount of money over time is not always productive, as it will likely be out of the highest actual period no matter what happens.  Often, even if you get the rights back, the film will have been so heavily shopped no one will take a look at it anyway.

This is a mistake that a lot of filmmakers make.  Unfortunately, you do not have all the time in the world to shop for your film.  Eventually, you’ll want to make sure you get it out there, even if it’s at something of a loss.  If you want longer, it’s unlikely that your prospects will get better.  

Of course, I want to be clear that you shouldn’t take any old deal as soon as it’s offered.  It’s just important to remember that barring some incredibly specific extenuating circumstances,  your film won’t be worth as much next year as it is now.  Your Also, if the distributor or sales agent is in clear breach, you should still try to get your rights back. 

2. Generally, films take a few markets to make a cash upfront sale, and the pay chain is absurd.  

It often takes a few in-person touchpoints before the sale is finalized.  While I’m going to be pushing for a quick sale, sometimes it takes a while for the money to come through.   

Further, you should remember that a lot of time it will take a while for those payments to trickle through to the producer.  I’ve outlined the issue in detail in the blog below, but to give you an idea, an MG-oriented sale will likely have something like 10% due on signing, 40% due within 30-90 days from notice of delivery, and the remaining 50% due prior to release or within 30 days of release.  Also, most SVOD sales in the US pay out a set amount of time after the beginning of the license period.  

Related:The problems with the indie film distribution payment system.

3.  No one likes dealing with inexperienced people with huge egos.

If you’re an accredited investor, you’ve probably dealt with this issue on the other end.  You likely have money due to your own entrepreneurial endeavors, a high-paying position that likely required you to employ other people, an expansive portfolio of investments that may have required you to interface directly with other entrepreneurs, or some combination of the above.  

While the primary goal of any film production should be to get all of your money back, the industry is incredibly specialized.  Nobody likes being told how to run their business by someone without much experience in the driver’s seat of this highly specialized industry.

It’s important to remember that once you get to dealing with more powerful members of the industry, trying to throw your weight around to get a better deal isn’t likely to break in your favor.  Unfortunately, most good sales agents or distributors will just decline to take out your film, and the less-than-good ones who remain will find legal ways to avoid paying out as long as possible if they pay out at all.   

This industry may be in a period of upheaval, but currently, sales agents and distributors still hold a lot of power.   So if you want to make a profitable film, or a widely distributed one, you’re going to have to take some time to understand the common industry practices.

It’s incredibly difficult to negotiate with someone when you’re at a massive informational disadvantage, and more than likely you will be at an informational disadvantage purely by the nature of the specialization of the film sales and distribution industry. 

If you want to lessen your informational disadvantage, you should sign up for my mailing list to get monthly blog digests segmented by topic, you’ll also get a free film business resource pack that includes an ebook, whitepaper on the macroeconomics of the film industry, an investment deck template, and a whole lot more!  Click the button below to grab it.  

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Filmmakers Glossary of Film Investment Terminology

Last week I laid out a glossary of general-use film business terms, but the blog ended up a bit too long and dense to be a single post.  So, I broke it into two.  Last week was the basics of business terms, this week is the next level, and focuses entirely on investment terms.  Some of these may seem tangential and unnecessary, however if your goal is to close an investor, you’ll need to thoroughly speak their language.  If there’s something you don’t see here, check out last week’s blog here. I’m not a lawyer, this isn’t legal advice, and you should have a solid attorney on your team before trying to close an investment round. With that out of the way, let’s get started.

Capital

While many types exist, The term most commonly refers to money. 

Liquid Capital

Money that can be spent immediately, or near immediately.  Non-liquid capital would be considered something like real estate holdings which would first need to be liquidated in order to sell. 

Principle

In finance: it’s general the initial capital investment or the remaining balance on a debt. 

Interest

A percentage fee is added on to the principle of a loan or line of credit.

Compound interest

Interest on the principle of the loan and interest.

Simply: interest on interest.

High-Risk Investment

An investment where an investor may lose most or all of the money they put in. Independent Films are always high-risk investments

Securities and Exchanges Commission (SEC)

The main financial regulatory agency in the United States.  It oversees most forms of investment.

Accredited Investor

A person of means who is generally considered to have enough business know-how to appraise an investment, pay someone to appraise it for them, or who wouldn’t be completely destitute from taking a high risk-gamble.  As of the date of this publishing, according to the SEC the investor must meet either (NOT both of) the income or net worth requirement in order to be considered an accredited investor.
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Income Requirements
1.If filing individually, a person must have made 200,000 USD a year for the past 2 years, and be likely to do the same this year. 
2.If filing Jointly, a household must have made 300,000 USD a year for the past 2 years, and be likely to do the same this year. 

Net Worth.

The investor or household must have 1 million dollars in net worth OUTSIDE of their primary residence. ​

High Net Worth Individual (HNWI)

Outside the obvious, this term is generally a financial industry term for accredited investor

Edgar Database

A database of high-risk investments maintained by the SEC that is only accessible to Accredited investors and licensed brokerage or investment firms.

Financing Round

A round of financing or funding that is large enough to take an organization or project to the next major milestone.  For how this works in film, check out the youtube video I’ve linked below, and the blog linked below that.

Related Video: The 4 Stages of Indiefilm Financing

Related Blog: The 4 Stages of Indiefilm Financing

Business Plan

A document written by an entrepreneur or filmmaker outlining their investment.  In the film industry, this document will also often educate the investor on how the industry functions as a whole.  This document is also known as a prospectus, but that term is not as commonly used as it once was. 

Private Placement Memorandum (PPM)

A document that’s filed with the SEC for investors to consider investing in your project.  Frequently an attorney will base this document off of the filmmaker or entrepreneur’s business plan.  In most cases, a PPM will be registered with the aforementioned Edgar database for a modest filing fee. 

Pro-Forma Financial Statements

Financial documents consisting of an expected income breakdown, cash-flow statement, and top sheet budget to be invaded in the business plan and function as the basis for many of the financial sections of other documents

The Three points above are heavily outlined in my business planning blog series.

Related: How to write an independent Film Business Plan (1/7)

Backed Debt

A secured loan backed by something like a tax incentive or pre-sale agreement.

Unbacked Debt

An unsecured loan, or debt without backing.  Generally very high interest.

Financial Gap

The space between what you are able to raise and the amount you need to finish your project.

Financial Markets

A market where stocks, bonds, derivatives, or other securities are bought and sold. Common examples in the US would be the DOW and the NASDAQ.

Film Market

A convention where films are bought and sold primarily by sales agents and distributors.  For more, check out the link below.

Related: What is a film market and how does it work?

Gross Domestic Product (GDP)

The total value of all newly finished goods in a given country during a set timespan.  Most commonly calculated on an annual basis.

Recession

A macroeconomic term signifying a period of a significant decline in economic activity.  It’s generally only recognized after two consecutive quarters of down financial markets. 

Depression

A severe recession that lasts longer than 3 years and corresponds with a drop in GDP of at least 10%

Bull Market

A market that’s strong and growing. It’s called a bull market as the upward trending graph looks like a bull nodding its head according to some people on Wall Street.

Bear Market

Yes, I spelled that right.  It’s a financial market that’s going down, or staying stagnant.  The name comes from a bear swiping its claws down.  Probably the same wall street guy came up with it. 

Thanks so much for reading! If you liked this, please make sure to check out last week’s general financing glossary, as well as my glossary of distribution terms. Also, please share. It helps A LOT.

Filmmakers Glossary of Business Terms

Additionally, make sure you grab my free Film Business Resource Package to get a print ready PDF version of all 3 glossaries.

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Filmmakers Glossary of Film Business Terminology.

A colleague of mine asked me if I had a glossary on film financing terms in the same way I wrote one for film distribution (which you can check out here.)  Since I didn’t have one, I thought I’d write one.  After I wrote it, it was too long for a single post, so now it’s two.  This one is on general terms, next week we’ll talk about film investment terms. As part of the website port, I’m re-titling the first part to a general film business glossary of terms, to lower confusion on sharing it. It’s got the same terms and the same URL, just a different title.

Capital

While many types exist, it most commonly refers to money.  

Financing

Financing is the act of providing funds to grow or create a business or particular part of a business.  Financing is more commonly used when referring to for-profit enterprises, although it can be used in both for profit and non-profit enterprises. 

Funding

Funding is money provided to a business or non-profit for a particular purpose.  While both for-profit and non-profit organizations can use the term, it’s more commonly used in non-profit media that the term financing is. 

Revenue

Money that comes into an organization from providing shrives or selling/licensing goods.  Money from Distribution is revenue, whereas money from investors is financing, and donors tend to provide funding more than financing, although both terms could apply.

Equity

A percentage ownership in a company, project, or asset.  While it’s generally best to make sure all equity investors are paid back, so long as you’ve acted truthfully and fulfilled all your obligations it’s generally not something that you will forfeit your house over.  Stocks are the most common form of equity, although films tend not to be able to issue stocks for complicated regulatory reasons and the fact that films are generally considered a high-risk investment.

Donation

Money that is given in support of an organization, project, or cause without the expectation of repayment or an ownership stake in the organization.  Perks or gifts may be an obligation of the arrangement. 

Debt

A loan that must be paid back. Generally with interest.

Deferral

A payment put off to the future.  Deferrals generally have a trigger as to when the payment will be due.

“Soft Money"

In General, this refers to money you don’t have to pay back, or sometimes money paid back by design.  In the world of independent film, it’s most commonly used for donations and deferrals, tax incentives, and occasionally product placement. It can have other meanings depending on the context though.

Investor

Someone who has provided funding to your company, generally in the form of liquid capital (or money.)

Stakeholder

Someone with a significant stake in the outcome of an organization or project.  These can be investors, distributors, recognizable name talent, or high-level crew. 

Donor

Someone who has donated to your cause, project, or organization. 

Patron

Similar to donors, and can refer to high-level donors or financial backers on the website Patreon.  For examples of patrons, see below. you can be a patron for me and support the creation of content just like this by clicking below.

Non-Profit Organizations (NPO)

An organization dedicated to providing a good or service to a particular cause without the intent to profit from their actions, in the same way, a small business or corporation would. This designation often comes with significant tax benefits in the United States.

501c3

The most common type of non-profit entity file is to take advantage of non-profit tax exempt status in the US.

Non-Government Organization (NGO)

Similar to a non-profit, generally larger in scope.  Also, something of an antiquated term. 

Foundation

An organization providing funding to causes, organizations and projects without a promise of repayment or ownership.  Generally, these organizations will only provide funding to non profit organizations. Exceptions exist. 

Grantor

An organization that funds other organizations and projects in the form of grants.  Generally, these organizations are also foundations, but not necessarily.

Fiscal Sponsorship

A process through which a for-profit organization can fundraise with the same tax-exempt status as a 501c3.  In broad strokes, an accredited 501c3 takes in money on behalf of a for-profit company and then pays that money out less a fee.  Not all 501c3 organizations can act as a fiscal sponsor. 

Investment

Capital that has been or will be contributed to an organization in exchange for an equity stake, although it can also be structured as debt or promissory note.

Investment Deck (Often simply “Deck”)

A document providing a snapshot of the business of your project.  I recommend a 12-slide version, which can be found outlined in this blog or made from a template in the resources section of my site, linked below.

Related: Free Film Business Resource Package

Look Book

A creative snapshot of your project with a bit of business in it as well. NOT THE SAME AS A DECK.  There isn’t as much structure to this.  Check out the blog on that one below. 

Related: How to make a look book

Audience Analysis

One of 3 generally expected ways to project revenue for a film.  This one is based around understanding the spending power of your audience and creating a market share analysis based on that. I don’t yet have a blog on this one, but I will be dropping two videos about it later this month on my youtube channel.  Subscribe so you don’t miss them.

Competitive Analysis

One of 3 ways to project revenue for an independent film.  This method involves taking 20 films of a similar genre, attachments, and Intellectual property status and doing a lot of math to get the estimates you need. 

Sales Agency Estimates

One of 3 ways to project revenue for an independent film.  These are high and low estimates given to you by a sales agent.  They are often inflated.

Related: How to project Revenue for your Independent Film

Calendar Year

12 months beginning January 1 and ending December 31.  What we generally think of as, you know, a year. 

Fiscal year

The year observed by businesses. While each organization can specify its fiscal year, the term generally means October 1 to September 30 as that’s what many government organizations and large banks use.  Many educational institutions tie their fiscal year to the school year, and most small businesses have their fiscal year match the calendar year as it’s easier to keep up with on limited staff.

Film Distribution

The act of making a film available to the end user in a given territory or platform. 

International Sales

The act of selling a film to distributors around the world. 

Related: What's the difference between a sales agent and distributor?

Bonus! Some common general use Acronyms

YOY

Year over Year.  Commonly used in metrics for tracking marketing engagement or financial performance on a year-to-year basis.

YTD

Year to Date.  Commonly used in conjunction with Year over year metrics or to measure other things like revenue or profit/loss metrics.

MTD

Month to Date. Commonly used when comparing monthly revenue to measure sales performance. Due to the standard reporting cycles for distributors, you probably won’t see this much unless you self-distribute.

OOO

Out of Office.  It generally means the person can’t currently be reached. 

EOD

End of Day. Refers to the close of business that day, and generally means 5 PM on that particular day for whatever the time zone of the person using the term is working in.  

Thanks for reading this!  ​Please share it with your friends. If you want more content on film financing, packaging, marketing, distribution, entrepreneurialism, and all facets of the film industry, sign up for my mailing list! Not only will you get monthly content digests segmented by topic, but you’ll get a package of other resources to take you film from script to screen. Those resources include a free ebook, whitepaper, investment deck template, and more!

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How to Raise Development Funds for your Feature Film.

Pretty much every filmmaker wants to find money to make their movie.  Unfortunately, many don’t quite realize that in order to raise the kind of money you need to make anything above a micro-budget movie, you’ll generally need a lot already in place.  It’s something of a catch-22.  Investors need name talent to market the film, and distribution to make it available.  Distributors need name talent and a tested team to give any meaningful commitments, and name taken need to know they’ll be paid.  There are ways around all of this, but generally, they require money upfront.  This blog is about how you raise it.

​Unfortunately, there isn’t a magic bullet on any level of film funding.  The best I can do is offer you tools and tactics to use to increase your chances of success.  You will probably need more than one of these tools to get the job done.
​

Don't want to read? Check out the video on this topic below

​Crowdfunding

Let’s get this one out of the way fast.  Crowdfunding CAN be great for filmmakers not only as a way to raise partial funding, but also to engage yourself with your audience and provide market validation for both investors and distributors/sales agents.  That said, it’s not without its drawbacks.  Using crowdfunding as an early-stage race tool can cause your donors to question whether or not you’ll be able to get the whole film done.  If you can’t, it can lead to problems.  (Extra special shoutout to my patrons here, since we’re talking about crowdfunding.)

Friends and Family

I know, I know.  This is the oldest piece of advice in the book.  But, there’s a reason it’s still around.  Your friends and family are (hopefully) among the people who are most likely to back and support you in this endeavor.  If they’re like mine were when I was starting out, while they may be willing to help and actively want you to succeed, they’ll still need some proof it’s possible.  However, the proof they’re like to need will probably be something easier to get than an investor would need. These 

Equity

But Ben, didn’t you just say that you need more in place to get an investor?  Yes and no.  In order to raise a large round, you’ll need a lot in place, but if you’re only focusing on a smaller round you can get by with less.  It is important to properly structure this investment though.  You’ll either need to offer a more substantial stake in the company for the bigger risk taken for investing earlier, or you’ll need to do some other investment vehicle like Convertible debt.

Even at this stage, if you want to raise money from investors you’re going to need to create an independent film investment deck. You can learn more about it in this blog, or you can grab a template for free in my film business resource package in the button below.

Grants

Grants are great in that they don’t require you to pay back the money so long as you only use it for its intended purpose.  They’re not so great in that they generally take a long time to be approved for the money, and you’re generally facing significant competition particularly for development stage grants. 

Soft Costs and Deferrals

This essentially means calling in every favor you have to make sure that you have the best chance possible to succeed in developing a package for your film.  This isn’t going to carry you the whole way though.  Most people who do this for a living don’t work purely on a deferral or commission basis.  I’m including myself in this, although I do defer a large portion of my fees and take on as much as I can on commission. 

That said, while the higher-level connectors, Producers, Executive Producers, and the like are generally unwilling to work on a purely deferral or commission basis, the friends you need to make a great crowdfunding video, concept trailer, or something similar might not be.  Getting their buy-in might help you make it to the next level.
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Skin in the Game

Finally, we come down to the ever-present fallback of funding the development round yourself.  This is generally the fasted way to complete the round, but it has the obvious drawback of needing deep enough pockets to just shell out and pay the money you need to get it done. 

I know all of this is really hard to grasp, and quite frankly it’s a lot.  While I do consult on this sort of stuff, I’m not cheap. (with good reason.) I try to make a lot of information available through my site, but there are times that you just kind of need someone to answer your questions and re-orient you.  As such, I’ve decided to start a special mentorship group. 

This special training group gets you access to additional content, an exclusive discussion group, and most importantly weekly group video calls where I’ll answer your questions personally, and occasionally bring on people who would also be of benefit to the group’s needs.  Click the button below to go to a form and express interest in this group.  Spots are limited.

Also, don’t forget about the Free indiefilm business resource package to get your free Investment deck template, e-book, white-paper, and more. .

Thanks so much for reading.  Please share it! Also click the buttons below for more free content.

18 Steps to GROW your Filmmaking from Shorts to Features

Every filmmaker wants to see their work on the big screen.  However, given the state of the indie film theatrical market, very few filmmakers can pull it off outside of the festival circuit.  Especially for their first films.   It requires a lot of skill, and an idea that appeals to a wide audience, ideally an audience you already have an in with.  So how do you scale your films to that point?  Well, this blog can get you started.

In order to get a theatrical run for your film in today’s day and age, you need a distinctive voice, flawless technical execution, great writing, an audience you know how to reach, and some level of recognizable name talent.  But those things don’t come cheap.  Here’s a roadmap starting with what you can start as soon as you finish reading this blog. 

1. WATCH A LOT OF MOVIES.

I know, this is about filmmaking, but in order to develop your voice you need to consume the work of others.  If you consume the work of others, you’ll find things to emulate.  There’s no reason not to do this.  Many professional filmmakers I know try to watch 2 movies they have not seen a week and at least 2 movies they have seen in order to revisit and better understand the craft. 

2. MAKE SHORTS AS QUICKLY AND CHEAPLY AS YOU CAN

In order to develop both your Voice and your skills, you need to churn out some content.  Assuming you’re working full-time, you may want to try to make 12 limited to no budget shorts in a year.  One per month.  This will let you hone your skills and develop your work.  Don’t spend any money on this. 

3. GET CRITIQUE ON YOUR WORK.

The Filmmakers Subreddit as well as many groups on Facebook offer the ability to share your work for the purpose of critique.  Getting critique from other filmmakers will help you both develop your network, as well as your skills.  This can be a tricky prospect, but I've seen some decent feedback happening on the R/Filmmakers Subreddit.

4. SCALE UP FOR A BIG SHORT.

Now that you’ve honed your craft and developed your voice, you should try to make something of a calling card.  This time, instead of spending a month on it, spend 3 months on it.  Limit yourself to a few locations, but get a bigger crew and spend a little money on this.  Continue to grow your presence on social media while you’re at it.

5. SUBMIT THAT SHORT TO FESTIVALS TO BUILD YOUR BRAND.

You need more than rapid iterations to scale your brand.  You also need validation.  Start submitting to local fests so you can attend them and build your network.  As you’re submitting, make sure to continue to build your brand and your engagement on social media.  Do everything you can to get press once you get into festivals.  You probably won’t get major press, but you should definitely reach out to the smaller local papers. 

RELATED - 6 Rules for contacting Press 

6. START WRITING YOUR FIRST FEATURE, WEB SERIES, OR OTHER SALABLE PRODUCT.

As you’re doing this, start fleshing out the concept for something bigger. Something more than skill building.  Something you can actually sell.

7. AFTER YOUR FESTIVAL RUN IS DONE, DO ONE LAST SHORT.

This one is for all the marbles.  Make the short in the same genre and generally same feel as your feature.  It doesn’t have to be a proof of concept short, or the short to get the feature financed, it has to show you can pull off a feature.  Spend between 3 and 6 months making it perfect. 

8. SUBMIT THE FILM TO GENRE FESTIVALS AND BIGGER FESTIVALS.

Now that you’ve got what will (hopefully) be your last ever short, time to start making relevant contacts in the corner of the industry you seek to inhabit.  Submit your film to the relevant festivals, including one or two big ones then finish your big project script.

9. CROWDFUND YOUR NEXT BIG THING.

Yeah yeah yeah.  I know everyone hates crowdfunding.  However, if you do it right, you can fund a large portion of your movie for free, and get a huge piece of validation to help you, close distributors and investors.

10. SHOOT AND EDIT A FEATURE FILM

Expect this to take a year, but make sure you finish it well and in a technically adept way so that you can get distribution.

11. SUBMIT THE FILM TO ALL THE FESTIVALS YOU GOT INTO BEFORE, PLUS THE MAJORS

The reason you did your last two festivals was to make contacts, time to start calling them in.  Submit your film, and travel to all the ones you can.  Only wait for one major before giving your premier to a tier 2 festival. 

12. GET DISTRIBUTION FOR YOUR FEATURE OR WEBSERIES

This product won’t do you much good if no one can buy it.  Distribution is hard though and it helps to have good people on your team.  If you’re already here, check out my submissions portal through the button below.

13. MARKET YOUR WORK

After the festival run is done, make sure you work with your distributor market your movie. If they’ll let you this process will take a while

14. REPEAT STEPS 9-13

Make another feature.  If you can, double the budget.  Go back to the same people you worked with before if you liked them and they did well. ​

15. MAKE A BRAND FOR YOUR COMPANY

You should also consider monetizing your intellectual property in another way, like starting to brand your production company by creating T-Shirts for your crews, and other perch for your friends.

RELATED: 4 Reasons Niche Marketing is VITAL to your Indiefilm Success

16. HELP OTHERS MAKE THEIR FIRST FEATURE

If you want to be successful you’ll need to have a strong network and weird considerable influence.  No one can survive as an island in this industry, and helping others build their resumes and work can pay huge dividends.
​

17. GET AN AGENT, OR REPEAT STEPS 9-13

If you want to scale up, you’ll need help.  An agent can help you immensely.  You’ll need to live in a hub to get one, or at least have a MAJOR win at some film festivals. 

18.  RINSE AND REPEAT STARTING WITH STEP 9. 

Unfortunately, there isn’t a single roadmap to make this work. No one could give an 18-step process for foolproof success in any industry, and the film industry is particularly tricky.

The best we can do is more a flowchart and a series of steps until you can catch a big break. The real key is making a sustainable life while you wait for that break. It’s not easy, but it can be possible.   

If you liked this, share it. It helps a lot.  Also, sign up for my mailing list to get a bunch of free goodies including an ebook, whitepaper, investment deck template, festival brochure template, and a whole lot more. Get it today!

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How and Why to treat your Production Company Like a Small Business.

Last week we talked about the 4 major types of Media Entrepreneurship, so this week I thought I’d expand on the most common production company that my readers seem to run.  That’s the small production company that they hope to scale into something bigger.  Here’s why your production company is a small business, and how to treat it like one so you can see it grow.

1. ACCEPT YOU HAVE A SMALL BUSINESS

The film is both a business and an Art.  The two don’t have to be enemies and work much better together.  For more on what I mean, click the related link below.  I have a different point to make here.

While this may seem like the goal is to become a more scalable startup, in reality, it’s probably more like a small business that may grow to a medium business in time.  You’re unlikely to be able to use high-growth strategies like Silicon Valley Tech Startups to grow your business from a prototype to a highly used platform.  The requirements are different, and the film is less suited to iterations than software and apps are.

As such, if you’re a filmmaker, you probably have a small business.  Small businesses grow slowly over time by growing their audience and scaling up their offerings as revenue and investments allow.  If you want to grow your production company as you would a small business, start by making one great film and then make a bigger and better one once you’ve found your audience.

2. BUILD & ENGAGE WITH YOUR AUDIENCE

If you want to build a business, among the most important things to have are customers.  For filmmakers, this means having a deeply engaged audience and creating content for them on a regular basis.  Part of that is creating a genuine presence on social media, but the more important part is continually creating products for that audience to give them a reason to keep coming back and engaging with your business. ​​​

3. INCORPORATE AUDIENCE FEEDBACK INTO YOUR WORK

If you really want your audience to keep coming back, it’s important that they feel valued.  Incorporating their feedback into your films can be a great way to greatly deepen your relationship with your audience.  This is something that Marvel has used to great effect.  Half of the Endgame was callbacks to fan-favorite moments from the other 73 1/3 movies in phases 1 to 3.

Some higher-level creators have an antagonistic relationship with their fans.  The only way you can really afford to do this is if you have the backing of a large network to make sure that people can’t forget to come back to your work.  TV Tropes calls this Phenomenon Creator Backlash. ​

4. GROW YOUR SUPPLIERS AND WHO SELLS YOUR PRODUCTS

If you’re a small business in the manufacturing sector (which you’re not far from) you need to make sure your product is available as far and wide as possible in order to continue to expose your work to a new audience and grow your potential customer base.  This means you need to partner with distributors.  Distributors have higher prestige and higher paying outlets than you can get to on your own.  Also, since they have access to those higher-level outlets, you’re more likely to be discovered through them than on other platforms that are inundated with so much content it’s unlikely anyone will discover the work that you didn’t drive there yourself. 

Yes, this will mean that you'll need to make a lower percentage of the overall sale than you would by yourself.  So long as you're dealing with reputable distributors, this is just the cost of doing business.  Publishers sell their books at a 55% discount over retail to bookstores, and most any distribution warehouse for a given good or service will also sell the product at wholesale price and take a cut before paying the manufacturer.  Again, for this to be valid, you need to have honest and accurate reporting throughout the supply chain. ​

5. DON’T FORGET WHERE YOU GOT STARTED

Never forget your early adopters. The people who were with you from the beginning. They can be your biggest supporters and greatest brand advocates if you continue to show you value them. However, they can sometimes be hard to please, as I’m sure I’ll see in the comments.  Both Starbucks and the City of Seattle will never forget that's where the chain was born.  You shouldn't forget the people who knew you when.  

Thanks so much for reading this! If you liked it, please share it. It’s extremely helpful. Also, consider joining my mailing list and in so doing get access to my indie-film business resource package. It’s got an ebook, a white paper, an investment deck template, festival brochure templates, and a whole lot more.

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The 4 Types of Media Entrepreneurship

Traditionally, when we think of entrepreneurs we think of Steve Jobs starting Apple in a Garage, or Jeff Bezos Traveling across the country to raise funds while writing his business plan in the back seat of the car while his wife drove.  However, there’s more to entrepreneurship than that.  Entrepreneurs find new and novel solutions to problems by building organizations despite a huge amount of risk and uncertainty.

Since this month is Entrepreneurship Month on both this blog and the blog I run over at ProductionNext, I thought I’d start out the month with a little of an expansion of Film Entrepreneurship in general.  In this post, I’ll adapt a rather notable post by Steve Blank from a decade ago to the current landscape media entrepreneurs face, as well as where you’ll most likely find those entrepreneurs.

In his post, Steve outlines that there are 4 types of entrepreneurial organizations which are generally accepted as follows small businesses, scalable startups, large companies, and social entrepreneurs.  You can (and maybe should) read Steve’s post before reading this one.  (it’s short)

If you still don’t agree that filmmakers are entrepreneurs, I recommend you read more of my writing on that topic, in particular this blog and this blog.  While I could expand these into how other film industry stakeholders like sales agents, distributors, press, critics, or YouTubers, in the interest of keeping the scope completely addressable I’ll be working with a more traditional indie film archetype. 

Small Business Entrepreneurship Exemplified by Truly Indie Filmmakers.

According to Banks, these are the entrepreneurs who run a small businesses like a bodega or mom-and-pop shops.  They have no intention of nationwide franchises, but they still do what they can to make a living for themselves and their family.  This is where the vast majority of filmmakers are.  They’re the people wanting to do what they love and find a way to get paid for it.

The owner of the bodega must figure out who buys what from them, and the way they stay afloat is through personalized service that creates a deep connection with their customers.  Convenience also plays a factor.  They can’t compete on price alone with the huge multinational chains down the street, so they need to make sure that they offer something that the mega-chain down the road doesn’t. 

In this day and age, the job is similar for indie filmmakers.  We can’t compete with the major studios, but those studios don’t target a small niche, they target everyone who has 12 dollars.  As a result, they miss a lot of people which leaves a hole open for clever filmmakers to establish an audience, keep them engaged, and build a business for themselves. ​

Scalable Startup Entrepreneurship: Best Exemplified by Indie Filmmakers on the Traditional Studio Path.

Scalable startup Entrepreneurs are people like Steve Jobs, Mark Zuckerberg, Bill Gates, or Jeff Bezos.  They start a company from (next to) nothing, and then look to do more than address an existing need, they want to disrupt the entire system by creating a need and then filling it.  In doing so, they become mega-wealthy and change the world. 

Those starting a scalable startup are faced with an incredibly high degree of uncertainty, as well as a long road to profitability.  In general, they need significant outside funding in order to succeed.  Most of the time, they must invent something that can be patented that demonstrates a novel solution to a widespread problem with a working prototype in order to raise significant funding from institutional investors.  After that, they’ll need to take on an experienced team and specialized advisors in or If they have a track record in their industry, it helps significantly.

For filmmakers, these scalable entrepreneurs are those who have already made a successful project or two and are scaling up to make something bigger.  They’ll need to have proven themselves by getting validation either in the form of a huge engaged audience, a hugely successful film, or a Tier 1 festival win just to get their foot in the door.  Once their foot is in the door, they can then seek to raise money using their previous work or a concept trailer to raise the funds to make a much bigger movie.  In order to successfully raise those funds, they’ll need a strong package of people with specialized skills and followings of their own. ​​

Large Company Entrepreneurship: Best Exemplified by Digital Divisions of major studios & networks. 

Large company entrepreneurs are people within large organizations seeking to either create new projects that solve a need that has not yet been addressed by the company that they’re working for.  Sometimes this is achieved by creating a new division, other times it's a new product from an existing research and development division.  

A couple of examples of this would be when Intuit started what would become Quickbooks, as well as many other similar projects like Quickbooks pay, expense tracking, and what would become the among many others.  For the Film Industry, I’d say the most notable recent example would be Disney+, although the digital divisions of every major network would also qualify.  Adult Swim starts new experimental projects like this on a regular basis. 

The challenges faced by large company entrepreneurs outside the film industry are as you would expect.  With a large company comes bureaucracy, bureaucracy tends to move slowly, so adapting to change can be extremely difficult.  Funding also becomes highly political, so it can be difficult to keep projects afloat.
​
For film companies, this is extremely similar.  Much of the top brass don’t want to give up the cash cows they’ve build for risky divisions that will burn through cash and not necessarily make more of it.  Also, at least until recently many of the digital divisions were considered a career downgrade from the more traditional media divisions.  We’ll see if it remains true.

Social Entrepreneurship: best Exemplified by Documentary Filmmakers.

Social entrepreneurs who care more about the benefit of the work than the bottom line.  They don’t just want to change the world, they want to save it.  Think of Tesla, OSIGroup (Makers of the Impossible Burger) or Jinko Solar.  Similarly but on a smaller scale, there’s BiosUrns (makers of a biodegradable clay urn that grows a tree from your ashes.)

Success on this front is hindered due to the perception that it’s not much of a money maker.  It can be harder to find investors as well since you’re specifically saying profit isn’t your primary concern.  Most successful companies started with one idea that they could refine and execute before moving to other ideas that complement the same customer base.  They also are very conscientious about stating that their product does more than they provide whatever it is you bought.  There are other intangible benefits associated with the purpose that customers may consider weighing in their purchase decision.

For film, this is best exemplified by documentaries, but more recently diverse media has also been put into the spotlight in as a similar cause for social change. Documentaries are different when it comes to funding, but when they’re well done there is an addressable audience that’s hard to ignore and easy to convert.  Some movies do tree-planting campaigns with ticket sales as an additional incentive to convert, and most community screenings also benefit a non-profit organization.

Thanks so much for reading!  Let me know what you think of this in the comments, and PLEASE share It helps more than you’d think.

Also, if you would like to know more about the business of film and media, one of the best ways to do so is by joining my mailing list click the button below. It’s got a free monthly digest of educational content, a free e-book, a whitepaper, and some templates to help you raise money and market your film.

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Why you ABSOLUTELY MUST Become an Indiefilm Entrepreneur

The concept of filmmaking entrepreneurship has been coming into vogue for quite some time now but has really started to take hold in the zeitgeist of our industry in the last 3-6 months.  The culmination of this was the launch of the Filmtrepreneur website, blog, and podcast.  From Alex Ferrari (Best known for Indie Film Hustle.).

However, Alex is far from the first to advocate for filmmaking entrepreneurship, despite potentially being the loudest voice in the space.  This blog at ProductionNext explores a lot of the most influential voices on this topic. I’m among although I didn’t have the foresight to brand it that way.  I think the reason for this is that more and more people are catching on that if you really want to be an indie filmmaker, the best answer in the current state of the industry is to be an entrepreneur.  Here’s why.

1. You’ve (Probably) got to

If you don’t have the ability to move to New York or LA and network your way into the studio system and don’t want to work for a local TV affiliate, becoming an indiefilm entrepreneur is your best way to make a sustainable living.  Most of us would rather not have a side gig or a 9-5 in order to keep a roof over our heads, but if we don’t build a brand and a company around our work there isn’t going to be much of an option.

In essence, building your brand, leveraging that into a community, and leveraging both of those into creating a sustainable company is your best bet to building sustainable revenue for yourself from your work.

2. There’s no money in MAKING films, only SELLING them.

I’ve said it before, I’ll say it again.  Any accomplished filmmaker will know that you only spend money when you MAKE movies.  That’s fine, and it’s true for almost any product.  However, you can’t pay your bills if all your money goes to buying lenses and camera equipment.

If you get investors, you’ll need to pay them back.  If you put the film on your credit cards, you’ll need to pay those back too.  (Also, don’t do that.)

3. If you want a sustainable career in film, you need to make money

I know I said this in the last point, but you can’t pay your rent with exposure.  You also shouldn’t pay your crew this way. In order to make money, you need to sell your film.  As such, you should consider this from the moment you start writing your script.  You should think about your audience, your marketing strategy, and who is going to absolutely love your film to the point that they annoy their friends because they just won’t shut up about it.  That segues nicely to...

4. The Notion that if you just make a great movie, people will find it is a fallacy.

We all heard it in film school, but while there are a few kernels of truth to it, it’s not even close to true overall.  It’s definitely easier to sell a good movie than a bad one, and word of mouth is still the most effective form of marketing.  That said, quality isn’t the only determining factor in selling a movie.  (Check out the box office numbers for Transformers if you don’t believe me.) Things like Genre, recognizable names, and the amount of publicity you can generate also have HUGE impacts on the salability of a film.

Regarding word of mouth, it’s like a virus.  If you don’t hit a critical mass, it won’t do you much good.  In order to get your critical mass, you need to have a strong marketing strategy and a well-defined target market that is ideally made up of an underserved niche.  The reason for the underserved niche is that it helps make it much more cost-effective to market the film.

Related: Why your film needs a niche market

5. It’s the best (and maybe only) path to true filmmaking freedom

If you want to make the movies you want to make, building a brand, a community, an audience, and a company is the best way to achieve that goal.  If you work up through the studio system, you’re not going to be likely to reach the upper echelons before relatively late in your career (if at all) Even then, you’re likely to be subject to studio mandate which will make it difficult to make the films you really want to make.

As such, if you want to make films that really strike your fancy, the best way to do so is via becoming a film entrepreneur.  I was speaking with Rob Hardy of Filmmaker Freedom about this shortly before writing this particular blog, and that’s a lot of the new direction for his filmmaking podcast, which you should check out.  (I’ve linked it below)

CHECK OUT THE FILMMAKER FREEDOM PODCAST |Apple Podcasts|

Thanks so much for reading!  If you want some help building your company, you should consider hiring a consultant with exits behind them. I’m one of those, learn more about my services in the services button below.  If you’re not ready to do that, check out my free film business resources pack. You get the Entrepreneurial Producer E-Book templates to help you make an investment deck, festival brochure, track distribution submissions, and more. It’s free when you sign up for my email list.

What Every Investor Needs to Know about Your Independent Film

They say that most people know whether or not they would get into bed with someone in the first conversation.  Admit it, you didn’t realize I was talking about investors giving you money right there, did you?  Jokes aside, there are a few key things your investor is going to need to know about your project in order to give you any serious consideration.

But before we get started, let me clarify that this is not the entire conversation.  This Is the conversation that will get you to the point you can send over documents for much deeper consideration.  Also, any one of these key points can disqualify an investor or a distributor.  That doesn’t necessarily mean it’s bad, it just means it’s not for them

Related blogs: How to Write a Look Book, Deck, & Business Plan (series)

Stage of development

There’s more than one time you’ll need to raise money.  As such, it’s good to clarify where you are with it upfront.

Related: The 4 Stages of indiefilm Financing (and where to find the money)

Genre

Your film is hugely important.  Generally, you’ll want to only list one genre as it denotes the style and feel of your film, and maybe 2-3 sub genres as those will inform both your setting, your audience, and general themes.  An example would be Goodland is a Slow-Burn Crime Thriller. 

Related: Why Genre is VITAL to Indiefilm Marketing & Distribution

Related: How Distributors Think of Genre & Sub Genre

Attachments

Investors will want to know who you have on board.  This can be distributors, recognizable name talent, tested directors, or anything else that may be marketable.  A couple of examples  would be Black Gold: America is Still the place stars Mike Colter (AKA Marvel’s Luke Cage.) It could also be The Cutlass has Wild Eye Releasing attached for Domestic distribution, and Leomark Studios handling international Sales. 

Related: Why your film still needs recognizable name talent. 

Budget

If you’re talking to an investor, you should say your total budget.  If you’re talking publicly to a distributor, you should give a range.  An example would be Goodland is a SAG Ultra-Low Budget Small town Crime thriller if you’re talking to anyone other than an investor.  If you’re talking to an investor, you’d say Made Up Movie Name is budgeted at 17 million dollars and we already have Governator McActionFace attached to star in it.  That’s why we need the extra 10 million beyond the 7 we already raised.

Logline

Your logline isn’t a 20 page treatment.  It’s a punchy sentence describing your project.  Everything up to this point is something you should be able to get out in about 10-15 seconds.

An example would be Goodland is a Completed SAG-AFTRA Ultra Low Budget Crime Thriller set in rural Kansas.  When a mysterious photographer shows up in town the same day the body of a drifter turns up dead in a cornfield, the local sheriff (played by Cinnamon Schultz of Winter’s Bone) must piece together the conspiracy before it’s too late. 

Financial Mix

The big reason your investor needs to know this is to make a better risk assessment.  It will also inform how much you’re asking them for.  You should never expect investors to cover your whole budget. 

An example of this would be something like Of our 4 million dollar budget, we’re raising 2.5mm in equity.  The rest is being covered by an MG-backed Presale from our sales agent, tax incentives from that place we’re shooting are being monetized by huge state businesses. ​

(Author's) note: Since it came up in the comments, I thought I'd clarify that the 4 million dollar example above is taken from a different film as the one I mentioned in the logline example.

Read more: The 9 ways to finance an independent film

Related: What’s the difference between an LOI & a Presale?

Target Demographic/Expected Audience

​Your Investor is going to want to understand how they get you’re going to get their money back to them, which means that you need to know who will buy your movie.  Think of this as placing a target, so you know where to shoot the arrow in the next step.  An example would be: After a few test screenings, we’ve realized that the target audience for The Cutlass is women aged 30-49.  Or, Based on ratings data gathered from similar films on IMDb Pro, we expect that that Made-up-action-movie starring Governator McActionFace will appeal primarily to Non-college educated White Men aged 30-55.  Especially those in Texas. 

Related: How do I figure out who to sell my movie to?

Marketing Plan.

Finally, they’ll need to know how you plan to reach that audience.  If figuring out your audience is placing the target, Marketing is shooting the arrow.  

As an Example: The Cutlass will be available across all standard TVOD platforms, Amazon Prime, and SVOD platforms.  We’ll utilize an aggressive PR and Awareness campaign to reach our core demographic, and get seeded in Amazon Prime’s Algorithm, and we will consider additional artwork to appeal to our new demographic.

Another example, Made-Up-Action Movie will utilize Governator McActionFace’s star power to raise awareness on the standard talk-show circuit prior to the US Release, while seeding early adopters with press and advance screenings in Texas, Montana, parts of Colorado, and Arizona.  Our theatrical run will focus primarily on screens in smaller secondary and rural markets. 

Thanks so much for reading!  If you liked this blog, and want more like it, share it on your social media. ​

Blogging might look like my full-time job, but it’s not, I also distribute and consult on movies. Some of which I listed above. If you’d like yours to be next, click the relevant button below. If you want to stay up to date about classes, events, and other filmmaker focus content, as well as get a resource packet with lots of valuable templates and other exclusive resources, join my mailing list with the button below.

How best to COLLABORATE with your Distributor to Market your Movie

The Distributor’s job is largely to make your film available for sale and set it up in such a way that people are likely to buy it. Some will work to market your film, but most won’t.  Even when they do market your film, you helping market your work will make the marketing your distributor does much more effective.  However, there are some basic rules that you should follow to make sure everything goes as well.  

Quick disclaimer: This assumes that they'll work with you on it.  that's not always a safe assumption, although it should be something you talk about when you're in negotiations with your sales agent and distributor. 

1. COMMUNICATE with your distributor.

If you want your relationship with your distributor to be effective, then you need to lay out what you would define as success.  You should listen to when they need something from you, and work towards making it happen as quickly as possible.  Do what you can to help them promote your film. 

A lot of the communication with your distributor will likely be at the beginning of your relationship in closing the contract.  You can learn a lot about them through this process, but the most important thing to do before you sign is call 3 of their previous clients.  Here’s a link for more information about doing your due diligence. ​

Related: 5 Rules for vetting your Distributor/Sales Agent

Also, you might want to understand what a film distribution contract looks like to better facilitate that communication.  The blog below may help.

Related: The 7 Main Indiefilm Distribution Deal points

2. Make sure you ONLY sell the OFFICIAL links

Unless you redline the ability to sell your film through Vimeo through your own website, you should ONLY post the official sales links for your film that your distributor will set up.   Even if you have the right to sell the film through your own website, you should still at least occasionally post the distributor’s sales links.  Not only does it help keep your distributor happy, it also makes your film look bigger since its available in more places. 

3. Take as many interviews as you can, and seek them out where appropriate.

If you want to build a career in film, you will need to build a brand for yourself as a filmmaker.  A brand will help you engage with your community, find work, get more sales for the work you produce yourself, and can even help you finance your next project.  Getting Press will help you expand that brand.  It also helps raise awareness of your film, which in turn will help move more units or get more views and can create a positive feedback loop to help you build your career.  In essence, it’s the very definition of a win-win.

4. Keep your social media up to date!

If you’re building your social media right, then you’re going to have an engaged following interested to hear about progress and release updates for the film.  As such, whenever you have reason to update your community you should.  Not only does it help you move units, but it can also help you deepen the relationship with your community and customer base which can in turn help you make future projects more easily. 

5. Use Affiliate programs for better tracking and analytics

As something of a workaround, I use Amazon Affiliates with every film that I have on Amazon, primarily so that I can get more analytics more quickly. If you see Amazon banners on my sites or links from Amazon on my social media, it’s likely an affiliate link. While I don’t see who bought the film, I do get an idea of through which channel the film was purchased. This lets me hone the message for each platform as I can see what works and what doesn’t. I might write a blog specifically about this if someone requests it in the comments or on my Patreon.

Thanks so much for reading! If you want to know more, you should join my mailing list for blog digests of blogs just like this one as well as a great resource package that includes a free ebook, whitepaper, templates, and tons of other resources. That button is right below

I don’t just write about film distribution, I also do it. If you still need distribution, guidance, or sales estimates, documentation, or even just help to make a more marketable movie, for making your film. for your film, you should consider submitting it. That link is below the other button.

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The Problem with the IndieFilm Distribution Payment System

A lot of filmmakers I’ve worked with don’t know enough about distribution to really make a career making creative content.  This shouldn’t be a surprise, as it’s something film schools tend not to teach.  That being said, there’s a part of the equation most people just don’t talk about, and WHY it takes so long for filmmakers to get paid?  This blog addresses that.

As an aside, this is laid out from a financial perspective in the blog below.  However, we will also be tracking how much of the money goes away throughout this blog.  This will admittedly be very much oversimplified, but we’re going to be tracking it as a single dollar for ease of understanding. 

Related: Indiefilm Waterfalls 101

How long it takes for the platform to pay the aggregator

I talk about this in workshops quite frequently, but each different stakeholder takes a while to pay the next person in the pay chain.  Most of the time, this starts with the platform and aggregator relationship.  In general, this is the first section in the chain. 

Normally, the platform will take 30%-35%. This should include credit card processing fees.  So if the consumer gave 1 dollar, then we’re down to 65-70 cents. 

While exceptions exist, the platform most often pays the aggregator on a monthly basis.  After that, the aggregator will need to pay the distributor.  If you’re self-distributing, that distributor is you, but not all aggregators will deal with you in the fashion you’d prefer, for more information, read the blog below.
​

RELATED: What platforms should I release on?

How long it takes for the aggregator to pay the distributor

Once the aggregator is paid, the money will flow to the distributor.  As I stated, this may be you.  Depending on what aggregator the distributor is using, payments will be either monthly or quarterly.  Sometimes the aggregators that pay quarterly have lower overheads, so it might make sense to wait.  That said, I think the most current data you can get is necessary to make smart marketing decisions.
​

If you still don’t know the difference between a sales agent and a distributor, check the link below. Most aggregators operate on more of a flat fee model, so we’ll assume that the money is passed through.  If you worked with an aggregator, you end up with about .70 cents for every dollar the consumer spent, but you also probably had to put the aggregation fees in yourself, so you’ll probably need to sell around 2100 copies (assuming they sell for 2.99 each) to break even.  You’ll also get insights within 2 to 4 months.

Related: What’s the difference between a sales agent and a distributor?

How long it takes for the Distributor to pay the Sales Agent

Most distributors don’t deal with filmmakers directly.  They’ll either deal with a Producer’s Rep or a Sales Agent.  Generally, Distributors pay quarterly to start and sometimes will move more towards bi-annually after a few years.  This can be arduous, but it’s very difficult to negotiate.

Generally, the distributor will take 30-40%.  (As of publishing this, I take 25% for direct US Distribution.) So of the 65-70 cents, we had after the platform.  That means that after the distributor takes their cut, there are between .39 and .49 cents left to the filmmaker.  (or around .52 cents if you work with me)

Also, even though I am a distributor, I work directly with filmmakers. So you’d keep .52 cents on the dollar, and be paid around 4-5 months after the initial sale is made.  (I time my reports to work with my aggregator to minimize wait times.  Plus, I cover aggregation and the majority of marketing and publicity fees.
​

Related: What does a producer’s rep do anyway?

How long it takes for the Sales agent to pay the production company

Finally, the sales agent pays the Producer’s Rep and production company. This is also generally on a quarterly or Bi-Annual basis, although there’s more room for variation here. After that, the filmmaker uses the money to pay back debts, then investors, then whoever else is left to pay back from the production.   

The Sales Agent normally takes between 20% and 30%, but they sell territories across the globe. A Producer’s Rep will normally take 10% of the money paid to the filmmaker, and will normally be paid in line with the sales agent.

So, following the chain we talked about before, by the time the sales agent pays the filmmaker, we’re looking at between .27 and .39 cents on the dollar without a producer’s rep, or between .24 cents and .35 cents with one. That’s not a great representation of what a good producer’s rep will do for you though.  (including the potential to get you paid immediately from the first sale) I’ve painted these deals in the most simple possible light to help you understand, but there are lots of single-line items that can screw you if you’re not careful.  So, while the producer’s rep may take a small piece of the pie, (.03 to .04 cents on the total dollar) they can help you make the whole pie a fair amount bigger.

Thanks so much for reading! If you have any questions for me, you might want to check out my mailing list. I send out monthly blog digests including ones JUST LIKE THIS, plus you get lots of great resources like templates, links to money-saving resources, and a whole lot more!   Or, if you’ve got a completed project and you’re looking for distribution, submit it using the link below. You can also learn more about services for early-stage projects using the other link. I’ll review it and reach out soon.

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When and Where to use Each Indiefilm Investment Document

There are 3 different documents you would need to approach an investor about your independent film. I’ve written guides on this blog to show you how to write each and every one of them. Those three documents are a Look Book (Guide linked here.) a Deck (Guide Linked Here) and a business plan. (Part 1/7 here) But while I’ve Written about HOW to create all of these documents, I’ve held back WHY you write them, WHO needs them, and WHEN to use them. So this blog will tell you WHO needs WHAT document WHEN and HOW they’re going to use it.

As with some other blogs, I’ll be using the term stakeholder to refer to anyone you may share documents with, be they an investor, studio head, sales agent, Producer of Marketing and Distribution (PMD) or Distributor.

What are these documents and WHY do you share them?

So first, let’s start with what each document is, just in case you haven’t read the other blogs (which you still should)

A Look book for an independent film is an introductory document, that’s very pretty and engaging and gives an idea of the creative vision of the film.  The purpose is to get potential stakeholders interested enough in the project to request either a meeting or a deck.  The goal in showing them this document is to get them to start to see the film in their head and get them to become interested in the project on an emotional level.

Related: Check out this blog for what goes into a lookbook

A Deck is a snapshot of the business side of your film.  The goal is to send them something that they can review quickly to get an idea of how this project will go to market and how it will make money so that they get an idea of how they’ll get their money back.

Related: The 12 Slides you need in your indie film investment Deck

A business plan is a detailed 18-24 page document broken into 7 sections that will give potential investors not only an idea of your investment but of the industry as a whole.  In a sense, it’s equal parts education and persuasion, especially for investors new to the film industry.  The goal is to give the prospective stakeholder a deeper understanding of the film and media industry, and a very thorough understanding of your project and the potential for investing in it. 

Related: How to Write an Indiefilm Business Plan (1/7 - Executive Summary)

WHO needs these documents and HOW they’ll use it

Different stakeholders need these documents at different times.

Look Books should be sent to any potential stakeholder, including investors, studio heads, sales agents, distributors, producer’s reps, Executive Producers, and more.  It’s a creative document that gives a good idea of the product at the early stage.  It helps people gauge interest in your project

Decks are primarily used by Investors, Executive Producers, PMDs, and potentially Sales Agents.  Distributors and Studio Heads are less likely to need a deck since they know the business better than you do. At least most of the time.

Business plans are primarily needed by angel investors new to the film industry and Angel Investment Syndicates to use as the backbone for the Private Placement Memorandum (PPM) The First and last sections of the business plan (The Executive Summary and Pro-Forma Financial Statements) may be more widely used, often at the same general place as the deck, or only shortly after.

WHEN do they need these documents?

Look books come early on.  It’s generally the first thing they’ll ask for when considering your project.

Decks come shortly after the lookbook.  Sometimes in an initial meeting, or sometimes directly after that first meeting. 

Looking at a business plan is generally very deep in the process of talking to a potential stakeholder, it’s almost always after at least 2-3 meetings and a thorough review of the deck.

If this was useful, you should definitely grab my free film business resource packet. It’s got templates for some of these documents, a free e-book, a whitepaper that will help you write these documents, as well as monthly blog digests segmented by topics about the film business so you can sound informed when you talk to investors. Click the button below to grab it right now.

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How to Make LookBook for an Independent Film

I’ve written previously about what goes into an indie film deck, but as I get more and more submissions from filmmakers, I’m realizing that most of them don’t fully understand the difference between a lookbook and a deck.  So, I thought I would outline what goes into a lookbook, and then I’ll come back in a future post to outline when you need a lookbook when you need a deck, and when you need a business plan.

What goes in a lookbook is less rigid than what goes in a deck.  It’s also designed to be a more creatively oriented document than a deck.  But in general, these are the pieces of information you’ll need in your lookbook.  I’ve grouped them into 4 general sections to give you a bit more of a guideline.

You’ll often see the term stakeholder.  I use this to mean anyone who might hold a stake in the outcome of your project, be they investors, distributors, or even other high-level crew. ​

Basic Project Information

This section is to give a general outline of the project and includes the following pieces of information.

• Title

• Logline

• Synopsis

• Character Descriptions

• Filmmaker/Team bios

The title should be self-explanatory, but if you have a fancy font treatment or temp poster, this would be a good place to use it.

The logline should be 1 or 2 sentences at most.  It should tell what your story is about in an engaging way to make people want to see the movie.  You probably want to include the genre here as well,

The synopsis in the lookbook should be 5-8 sentences, and cover the majority of the film’s story.  This isn’t script coverage or a treatment. It’s a taste to get your potential investors or other stakeholders to want more. 

Character descriptions should be short, but more interesting than basic demographics. Give them an heir of mystery, but enough of an idea that the reader can picture them in their head.  Try something like this.  Matt (white, male, early 20s) is a bit of a rebel and a pizza delivery boy.  He’s a bit messy, but nowhere near as bad as his apartment.  He’s more handsome than his unkempt appearance lets on,  If he cleaned up he’d never have to sleep alone.  But one day he delivers pizza to the wrong house and gets thrust into time-traveling international intrigue.

Even that’s a little long, but I wasn’t actually basing it on a movie, so tying it into the film itself was trickier than I thought it would be.  That would be alright for a protagonist, but too long for anyone else. 

Filmmaker and Team bios should be short, bullet points are good, list achievements and awards to put a practical emphasis on what they bring to the table DO NOT pad your bio out to 5000 words of not a lot of information.  Schooling doesn’t matter a lot unless you went to UCLA, USC, NYU or an Ivy League school. ​

Creative Swatches

These are general creative things to give a give the prospective stakeholder an idea of the creative feel of the film.  They can include the following, although not all are necessary.

• Inspiration

• Creatively Similar Films

• Images Denoting the General Feel of the Film

• Color Palette

The inspiration would be a little bit of information on what gave you the vision for this film.  It shouldn’t be long, but it definitely shouldn’t be something along the lines of “I’ m the most vissionnarry film in the WORLD.  U WILL C MAI NAME IN LAIGHTS!” (Misspellings intentional) Check your ego here, but talk about the creative vision you had that inspired you to make the film.  Try to keep it to 3-4 sentences.

Creatively similar films are films that have the same feel as your film.  You’re less restricted by budget level and year created here than you would be in a comp analysis, that said, don’t put the Avengers or other effects-heavy films here if you’re making an ultra-low budget piece.  I’d say pick 5, and use the posters. 

Images denoting the general feel of the film are just a collection of images that will give potential stakeholders an idea of the feel of the film.  These can be reference images from other films, pieces of art, or anything that conveys the artistic vision in your head.  This is not a widely distributed document, so the copyright situation gets a bit fuzzy regarding what you an use.  That said, the stricter legal definition is probably that you can’t use without permission.  #NotALawyer

The color palette would be what general color palette of the project.  This is one you could leave out, but if there’s a very well-defined color feel of the film like say, Minority Report, then showing the colors you’ll be using isn’t a terrible call,  Also,, it's generally best to just let this pallet exist on the background of the document on your look book.  ​

Technical/ Practical swatches

This section is a good indicator of what you already have, as well as some more technical information about the film in general.  It should include the following.

• Locations You’d like to shoot at

• Cities You’d Like to shoot in

• Equipment you plan on using

Photos are great here, if you use cities or states include the tax incentives for them,  The equipment should only be used if it’s the higher end like an Arri or Red.  If you’re getting it at a fantastic cost, you should mention that here as well. People tend not to care about the equipment you’re using, but if you’re going to put it in any pitch document, this is the one.

Light Business Information

The lookbook is primarily a creative document, but since most of the potential stakeholders you’re going to be showing it to are business people, you should include the basics. When they want more, send them a deck.

Here’s what you should include

• Ideal Cast list & Photos

• Ideal Director List

• Ideal Distributors

These are important to assess the viability of the project from a distribution standpoint. It can also affect different ways to finance your film. If your director is attached, don’t include that. If you have an LOI from a distributor, don’t mention potential distributors. Unless your film is under 50k, don’t say you won’t seek name talent for a supporting role. You should consider it if it’s even remotely viable.

If this was useful to you but you need more, you should snag my FREE indiefilm resource package.  I’ve got lots of great templates you get when you join, and you also get a monthly blog digest segmented by topic to make sure you’re informed when you start talking to investors.  Click below to get it.

The 12 Slides You Need in Your IndieFilm Investment Deck - WITH TEMPLATE!

Pitching to independent investors is a much different formula than we’re generally taught in Film Schools. The formula we’re taught in Film School is generally built around a studio pitch. A studio does a lot more than give money to a project. They have huge marketing, PR, legal, and distribution teams that they use to monetize any films they finance. As such it’s not the filmmaker’s job to pitch their projects on anything except story when working within that system.

Would you rather Watch a video than read a blog?  I've got you covered in the video from my Youtube Channel. 

​Filmmakers must take a different approach when talking to independent film investors. Generally, angel investors are only looking to finance projects, they don’t have resources to help market and distribute the film. While Film is a highly speculative and inherently risky investment, and most film investors don’t invest in film solely for the ROI, they need to know you have a path to get their money back to them.
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There’s a certain formula for creating a successful slideshow for investors. These presentations (Generally referred to as “Decks” in Silicon Valley) have been honed to tell the story of your company. Investors are used to seeing this format when deciding whether or not to invest in your project. It’s pretty easy to find samples of this formula for regular companies on SlideShare, but since the film industry is so specialized there must be some modifications made to the formula in order to make a good Deck to pitch your film to an investor. Below is a breakdown of what should go into a Filmmaking deck, or you can just grab the template in the resource pack.

SLIDE 0 – Project Name/Artwork.

In a standard company pitch, the first thing that appears is the name of the company and the logo. For a film or media project, instead use the name of the project, the name of your production company, and the one sheet for your project.

SLIDE 1 – Project Overview

Generally, this would be where an entrepreneur would put an overview of his or her company, what it does, and what its mission is. For a film or media project, put the logline of your project, as well as the genre and a basic overview of the story.

SLIDE 2 – Why Does this Project Need to be Made?

In a standard company pitch, slide 2 and 3 would be the problem that the company seeks to solve, and the solution it offers. Since Films are generally made more as entertainment, they don’t always have a problem that they’re fixing. So instead, focus on why this project should be made.
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Some approaches you could take on this would be that there’s not enough family-friendly media being made, Women and minorities are vastly underrepresented in media, young LGBT kids need a role model, or that whatever niche you’re targeting doesn’t have enough entertainment. Figure out WHY your story needs to be told, and it can’t just be that you’re an artist and it’s in your soul.

SLIDE 3 – Why Your Project is the One to tell That Story

In the standard company deck, this would generally be the solution that your company offers. For film, focus on why you and your team are the ones to tell the story you established in slides 1 and 2. Don’t go too deep into the team, you’ll cover that later.

SLIDE 4 – Opportunity

This slide is where an entrepreneur or filmmaker focusus on the size of the market and how they plan to access it. Focus on any niche communities you can target, and the genre your film is in generally performs internationally.

SLIDE 5 – Unique Competitive Advantage

Your Unique competitive advantage will remain mostly the same as it would in a pitch for any sort of company. You need to emphasize why your film should be the one they invest in. Do you have a large following in the niche audiences you’re targeting? Do you have some unique insight into the subject matter that no one has heard before? Is there something unique about your background that makes you the ideal person to tell this story.
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Focus on why your film or media project will stand apart from the competitors and has the best chance to make a profit. In short, How will you stand out from the pack when others don’t?

SLIDE 6 – Marketing Strategy

Long time silicon valley strategist Sheridan Tatsuno likens market research to setting up a target, and marketing to shooting the arrow at it. You’ve set up the target in slides 4 and 5, now it’s time to show how you’re going to shoot the arrow and make a bullseye. How will you utilize social media? Which platforms will you use? Are you already a part of the communities of your target market?

SLIDE 7 – Distribution Strategy

Generally, this would be your Go-To-Market strategy. In the film industry, this essentially means your distribution strategy. What rights will you be handling yourself, and what rights will you be handing to a distributor? What platforms will you use? How will you handle US Sales? Are you planning on attaching an international sales agent? How will you go about doing that if you haven’t already?

SLIDE 8 – Competitive Analysis

Show other films in a similar genre that have done well. Remember, this isn’t your business plan, so only show about 3 if you’re showing individual projects, not the 20 you should research. If you’ve already done your full competitive analysis, show one or two profitable representative samples and then the aggregate on all of the 10-20 films you researched. The charts and tables are good here.
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You only want to use content from the last 3-5 years. Content older than that doesn’t realistically represent the current marketplace. This is something that even professionals who estimate ROIs don’t always follow. It’s always a red flag for investors when your examples are too old,

SLIDE 9 – Financials

Generally, you’ll need a few of the major line items from your top sheet budget. A good bet would be your above-the-line, pre-production, principal photography, post-production, and marketing and distribution (or P&A) costs. Due to union caps, it can often be beneficial to raise your marketing and distribution budget at a later date. Projected ROI will also go on this slide.

SLIDE 10 – Current Status

This should be fairly self-explanatory, but here are a few questions to ask yourself. What have you accomplished so far? Do you have any talent attached? Are you talking with Sales Agents? Where is the script in development? Are there any notable crew on board?

SLIDE 11 – Team

Focus on why you and your team are uniquely qualified to not only bring this film to completion but deliver a quality product that can give an excellent ROI to all involved. Has your leadership team won awards at festivals? Have projects they’ve been on done impressive things?

SLIDE 12 – Summary/Thank You

For the final slide, put the three most important and/or marketable things about your project into a single slide. Investors get approached with a lot of opportunities and their brains can get cluttered. If an investor walks away knowing only these three things about your project, what do you want them to be?

Most importantly, thank them for their time and consideration, and make sure there’s an easy-to-find way to contact you ON YOUR DECK. Ideally on the first and last page. We’ll often send out decks when we send out the executive summary, so make yourself easy to contact if they’re interested.

Also, I alluded to this at the top of the article in the image caption, but this post did indeed originally appear on ProducerFoundry.com.  But, this isn't just a port.  I also set up a FREE template in both Keynote and Powerpoint in my resources packet.  Grab that with the buttons below. 

How to Finance your Indie Film/Media Project in 2019

The year is starting to wrap up, so now’s a good time to plan for how to make your career skyrocket in 2019.  If you’re not developing a film, you should be.  But if you read last week’s blog outlining why we’re likely going to be looking at a recession in 2019, and what that means for the film industry then you might be understandably nervous as to how you’re going to get your work done.  So here’s my advice to you.

By the way, this blog is going to heavily build on last week’s blog.  If you haven’t yet, read it by clicking below.  I’m going to reference it a lot in this week’s blog.

Related: Where the Film Industry is Headed in 2019

Angel Investment Money will be Harder to Find but can be Easier to Close.

If I’m right about the impending recession, then it’s likely that investors are going to get skittish.    However, investors will likely need to put their money somewhere.  In an uncertain economy, the film industry becomes comparably less risky, so you might want to talk to your investors about how the risk profile of the investment has become slightly less risky than it was.  However, you’ll need to make sure you have a way to capture attention and get eyeballs on your film. 

It may well be that your investors kind of took a bath when the stock market takes a pretty massive hit.  If that’s the case, and it looks like their portfolio will bounce back then you should have them ask their broker about a portfolio loan.  The blog below will provide much more insight. 

Related: One Simple Trick to Reopen Conversations with Investors

Pre-Sale Money might become more Viable

Given that we discussed last week how SVOD and AVOD platforms are likely to come out of the recession with an increased market share, it’s more likely that they’re going to need to put up their own money to finance content to keep their pipelines full. 

That said, you’re going to need to develop a good package, and you’re going to need more than just a presale to finance your film.

Consider a Pivot to Episodic Content

As discussed in last week’s blog, if a recession hits, the film markets are likely going to be in more trouble than they already are.  Given that the way we generally consume content has shifted from the theater to binge-watching shows on platforms like Hulu and Netflix.  If you have the ability to get enough money together to get an entire season of TV content together you should consider it as an alternative to financing a feature.  That being said, I wouldn’t bother with a pilot.

If you can’t get 10-13 episodes of TV content together, then you should consider a web series.  It’s easier to guarantee distribution, and if you do the web series fest circuit, you can build enough buzz to get a strong series deal out of it.  Something similar happened with Diary of an Awkward Black Girl which turned into HBO’s Insecure.

I’m currently working on a blog post that dives into this in much more detail based on a segment from one of my workshops.  When it’s released, I’ll post it here. 

Tax Incentives may well go Down.

As the economy shrinks, states may feel the need to cut back on spending.  Often, the arts are one of the first places where deep cuts are felt, especially in red states.  So if you’re planning on using a tax incentive to finance your film once the recession hits, you may want to reconsider.  I’ll admit, this one involves a lot more speculation than most of the others. 

Grants may be Tricky.

If you were counting on a grant for your film to get funded, you may be in a rough spot since when people have to tighten their belts, charitable giving tends to go way down.  This isn’t certain though.  Some larger foundations are likely going to be able to weather a few years in a bad economy before taking some big cuts. 

Now Could be a Good Time to make your First Feature

If you can make your first feature for a very small amount of money, now might be a good time. You’re likely going to have the time to kill, and some of your contacts who tend to work on corporate videos may be less busy than they were due to the recession.

If you decide to go this way, I would make sure you make a film that can be profitable on SVOD and AVOD alone, and that you spend time developing and engaging with your following across all platforms. When money is tight, it’s much easier to convince someone to watch your movie on Amazon than it is to convince them to buy it.

If you’ve made a low-budget film, and gotten it reasonably widely known and distributed, then you’ll be in a much better position to get investment when the economy bounces back.

Thank you so much for reading, and I hope you’re having a wonderful holiday. Come back next week for my final part in this 3 part series, the Hot and Not Genres of 2019!​

In the meantime, check out my mailing list!  You’ll get lots of great goodies, including blog digests organized by topic, an AFM Resources Packet, and money saving resources for film markets and festivals.

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How to Write an Independent Film Business Plan - 7/7 Pro-Forma Financial Statements

In the final part of my 7-part series on writing a business plan for independent film and media, I’ll be going over all of the financial statements you’ll need in your business plan.  This is a section that you’ll want to write before you write the financial text section of your plan, as it will have a great impact on that section and potentially other sections of the plan.  Each document should take up only a single page.

Topsheet Budget

If you’re reading this, hopefully, you already know what a topsheet budget is.  In case you don’t, It’s the summary budget of your entire film that should take up no more than a page.  Unlike the rest of these documents which should be made by an executive producer, the top sheet budget is best made by a line producer or UPM.  It’s important to note, that you can’t just make a topsheet budget, it comes as a byproduct of making a detail budget for your film.  It’s not something that should be effectively created for it’s own sake. 
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Revenue Topsheet

This page is a summary of all the money that will come into your project, and how it will go out and come back to the production company and the investor, loosely organized by what comes in domestically vs internationally, and what media right types bring in what money.

This is not something that all people writing business plans for films include, however, I feel that it’s an important document that gives an angel investor a simplified snapshot of the entire revenue picture before diving into some of the more gory details. 

Waterfall to Company (Expected Income Breakdown)

Louise Levison says you only need an expected income breakdown.  When I create proformas, I tend to include how the overall revenue table that outlines where the money will be divided among the major stakeholders. This includes the distribution platforms, distributors, sales agents, producer’s reps, banks, and investors.  It’s likely that if this is your first film, you won’t have all of those stakeholders, but it’s important to include the stakeholders you do have.
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Additionally, I use this outline what cuts are standard for each of those stakeholders, and what remains from each right type to go to the production company and the investor. 

Internal Company Waterfall/Capitalization Table

This is another document that not everyone includes, but due to my time in the tech industry, I find something like it is essential.  The term capitalization table (or Cap Table for short) is taken from the tech industry and outlines who owns what part of a company.

This document goes further than a standard cap table, in that not only does it outline the major owners of the company, it also shows where the money goes once it comes back to the production company, and how it’s divided between debt, investors, producers, actors, and other people within your production company who made the film. 

This document should calculate the investor’s expected Return on Investment (ROI) as well as how much is likely to go to producers and anyone else who has received profit participation.  If you have more than one set of people on the crew receiving profit participation, then you may want to lump it into a cast/crew equity pool. 

CashFlow Statement/Breakeven Analysis

This is a yearly/quarterly estimate of how the money will go out and come back in.  Generally, your entire budget will go out before any money comes back in.  If you’re using staged investments, you’ll want to outline when additional rounds of funding are likely to come into the company. Part of this is keeping track of the cash flow as you spend the money and as it goes back to investors. 

I’ll generally make an assumption that it will take a year from investment to complete the film.  After that, money will start coming back in about 3-4 quarters, and trickle in from each source according to however you think the film will be windowed.  That’s actually the optimistic version timeline. By the end of 5-7 years after the initial investment, you’ll likely just want to end the cash flow statement since it’s unlikely your film will be producing that much revenue. Films are not evergreen.

Research/Sources

This is as it sounds.  it’s all the resources for your comparative analysis that you used to make revenue projections, as well as any other sources you may have referenced in your plan.  If you did a comparative analysis, you’ll want to include the details on the films you chose as well as where you got the data, as reporting is inconsistent across major platforms like IMDb pro, The-Numbers, Box Office Mojo, and Rentrack.  I also have a useful whitepaper and some useful links in the resource pack.
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Thanks so much for reading this blog.  Thanks even more if you read all 7 parts!  If you’re a film school teacher and would like to use this in a course, feel free to email me using the link below to get a free print-ready version of this series, or anything else you may want to reverence.

Making your pro-forma financial statements requires a lot of research. My resource package has a whitepaper and collection of links that will help speed that process up a bit, as well as other templates and related content. Grab it for free with the button below.

If you need a guiding hand through the process, I’ve written. few dozen plans. Check out my services page if this is just. a bit too daunting to do on your own.

Lastly, if you want to review any of the other sections of this 7 part series, here’s a guild for you below. 

Executive Summary
The Company
The Projects
Marketing
Risk Statement/SWOT Analysis
Financials Section (Text)
Pro-Foma Financial Statements. (This Section)

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How to Write an Independent Film Business Plan - 6/7 Financial Methodolgy

In part 6 of my 7-part series on independent film business planning, we’re going to go over the text portion of the financial section of the business plan.  This is where you explain the methodology you used in your financial projections, the general plan for taking in the money, and then an overview of what you’re going to present in the final section, the pro-forma financial statements.  

It’s pretty common to send this section out as a standalone document, or perhaps paired with the deck or executive summary. That said, the reason it’s at the back of the business plan is to force your potential investor to flip around through the plan and better acquaint themselves with your prospectus and project. That, and this is relatively standard practice across multiple industries.

​Investment Plan

This subsection is devoted to how you intend to raise your funding.  As a hint, the answer SHOULD NOT be that you intend on raising your funding entirely from equity investors.   You’ll want to outline where you intend to raise each part of your money from, as well as how that money will be raised. 
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Some questions to ask yourself here are as follows, how much are you planning on raising in tax incentives?  How much are you planning on raising in product placement?  Do you have any pre-sales from a distributor or sales agency?  Are you planning on any other forms of backed debt?  Did you have a successful crowdfunding campaign?  How much are you looking for in equity investment?  And how much do you intend to raise in unbacked debt?

For more detail on this, you should check out one of my most popular articles.

Related: The 9 ways to finance an independent film.

You’ll also want to figure out if you’re staging the investment.  By this, I mean are you planning on raising money for development first?  Do you plan a separate raise for completion or marketing funds?  There can be some pretty big advantages to raising funding for your film across multiple rounds. 

For more information on this, I encourage you to check out my blog on the 4 stages of independent film investment.​

Related: The 4 stages of independent film investment.

You absolutely must to make sure they understand your offer.  Some questions you’ll need to answer are: What’s the amount you’re raising in equity and what percentage ownership in your project are you offering for that funding?  What’s your minimum buy-in?  Who are the other stakeholders? 
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Additionally, you’ll want to highlight the potential revenue for your film and give them their estimated Return on Investment (ROI).  This will have to be done after your pro-forma financial statements.  You’ll also want to outline when you expect them to break even.

Financial Assumptions

This section is primarily about outlining the assumptions you used while making your pro-forma financial statements.  You’ll want to outline the criteria you used when creating a comparative analysis, as well as what assumptions you made while creating your cash flow sheet, and waterfall to your company/expected income breakdown.

For more detail on financial projections, please check out this blog below.

Related: The two main types of financial projections

Pro Forma Financial Statements

Finally, you’ll want to outline your Pro-Forma financial statements.  For reference, these are the following documents. 

Topsheet Budget: A snapshot of how the money will be spent on your film. You can only get this by doing a full detail budget. If you try to make a top sheet from scratch, you’ll end up creating more problems than you solve.

Revenue Topsheet: An overview of money to the company and to the investor.

Waterfall to Company/Expected Income breakdown: An outline of how much money your film will make based on your comparative analysis, and from what sources.  Generally, when I make a waterfall like this, I’ll also deduct the fees from various other stakeholders including platforms, distributors, sales agents, and producer’s reps (if applicable.)

Internal company waterfall (capitalization table). This sheet is something that not everyone does, but it essentially outlines where the money will go once it gets to your company.  I feel this is necessary if you’re using a more complicated financial mix that incorporates debt and tax incentives. 

Cashflow Sheet/ Breakeven analysis: This document is an overview of how money will flow through the company and subsequently come back in.  you’ll want to highlight when they can expect to recoup their investment.

Research/Sources: This is self-explanatory, it’s the research you used in the other sections of the plan, particularly the films you used in the comparative analysis.

Thanks so much for reading! I’ll be back next week with the final installment going into much more detail on the pro forma financial statements. 

The reason I was able to write this blog series is that I’ve written a few dozen independent film business plans. If you need help with yours, you should check out my services page.

If you need more help researching for your business plan, check out the indiefilm Business Resource Pack. As mentioned above, it’s got a whitepaper to help you with your research, as well as lots of other helpful links and resources to aid in the creation of all the documentation you’ll need to talk to your investors. Plus, you’ll get a monthly blog digest full of helpful content so that you can be as knowledgeable as possible when you speak to your investor contacts.

Finally, if you want to check out the other sections of this 7 part blog series, I’ve included a table of contents below.
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Executive Summary
The Company
The Projects
Marketing
Risk Statement/SWOT Analysis
Financial Section (Text/Methodology) - This Post
Pro-Foma Financial Statements.

Check the tags below for related conent!

How to Write an Independent Film Business Plan - 5/7 SWOT/ Risk Analysis

In part 5 of my 7-part series on business planning, we talk about the risk management/SWOT Analysis of your project.  It begins with a risk statement that goes into exactly why film is a highly speculative and inherently risky investment, and then goes into a SWOT Analysis that illustrates how you plan on managing those risks.  For those of you who don’t know SWOT stands for Strengths, Weaknesses, Opportunities, and Threats.

Risk Statement

This is a boilerplate legal copy that you should not write yourself.  You’ll need a lawyer to write it, or some editions of Filmmakers and Financing by Louise Levinson have a statement you can use.  You’ll see it in the related books section below.  The purpose of this statement is to ensure that any potential knows that film investment carries a fairly significant risk of losing everything you put into it. 
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This is something you MUST include in order to not paint too blue a sky, or make false promises.  If it scares off any investors, it’s probably better you didn’t work with them anyway.

SWOT Analysis

The way I do my SWOT analysis is on the bottom third of the page that contains the risk statement, I do a 2*2 grid of strengths weaknesses, opportunities, and threats that outlines everything that will come for the following pages.  If it fits, this is succinct and a great way to manage space while informing your people.   

The other four sections of this plan are things I generally dress in a format similar to an outline, starting with a restatement of the Strength, Weakness, opportunity, or threat itself, and then stating how I intend to mitigate the negative and capitalize on the positive.  Here’s an outline of what each of these parts of the acronym stands for.

Strengths

Strengths are good things that are inherent to your project.  This could be something like holiday movies tend to have longer lifespans because they have regular movies to trigger people feeling the need to watch them, or there’s already an existing fan base for the intellectual property you’ve optioned.  Another good thing to focus on would be the track record of your team, and the general stength of any marketable attachments you’ve gotten. If you don’t have any of those, there’s an article on it in the free ebook in the resouce pack.
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Weaknesses

Conversely, weaknesses are things inherent to your project that may represent a problem. These could be things like the Fourth of July is a uniquely American Holiday, so the film may be difficult to sell internationally.  It could also be something like, the film is completely original and has no existing fanbase.   As previously stated, you’ll want to add exactly how you plan on addressing any weaknesses below each one. 

Opportunity

While Strengths are inherent to your project, opportunities are more related to the current state of the overall market.  This could be a marketable attachment you’ve got that just had a big win, such as one of your cast being cast in a major show or movie that was just announced.

Another example of this might be that there aren’t enough Fourth of July movies currently being made to sate demand and you’ve budgeted your film such that you can make your money back domestically.

Another example would be that a book from the same author as the book we’ve based our script on just got picked up for a television series by *insert name of the studio or PayTV Channel.*. Similarly, if your story is inspired by current conditions going on in the world or targeting a growing audience this is a good place to hammer that point home.

Threats

Just like opportunities, threats are reflective of current market conditions.  An example of a threat would be that due to the current geopolitical state of the world, many foreign countries are less likely to buy American than they used to be.  A potential trade war would also be considered a threat, although as of right now that’s not incredibly likely to effect to film and media.   Without being too political, many threats you’ll need to understand are a result of macroeconomic conditions that you can only really track by being politically aware.

Thank you SO much for reading!  I do a lot of this sort of work with my clients, so if you have a direct question that you need help answering for your business, then check out the Guerrilla Rep Services page.

If you like the content, you should grab my free film business resource package You’ll get great research aides and a whitepaper on the state of the industry, you’ll also get a free e-book, money and time-saving resources, templates, monthly digests of content like this segmented by topic, plus a whole lot more. Link in the button below.

Finally, this is part 5 of a 7 part series. Next week we’ll be tackling the financial text section, and then we’ll round it out with proforma financial statements the following week. In the meantime, check out the other parts of the series with the links below.

Executive Summary
The Company
The Projects
Marketing
Risk Statement/SWOT Analysis (This Section)
Financials Section (Text)
Pro-Foma Financial Statements.

How to Write an Independent Film Business Plan - 4/7 Marketing Section

In this installment of my 7 part blog series on business planning, we’re going to take a look at the marketing section of the plan.  This section is likely to be the longest section, as it encompasses an overview of the industry, as well as both marketing and distribution planning.  Generally, this section will encompass 3-5 pages of the plan, all single-spaced.  This is among the most important sections of the plan, as it is a real breakdown of how the money will come back to the film

Industry

In this subsection, you’ll want to define some key metrics of the film industry.  You’ll want to include its size, how much revenue it brings in, and ideally an estimate of how many films are made in a year, as well s the size of the independent part of the film industry vs the overall film industry.  If you want help with some of those figures, you should look at the white paper I did with ProductionNext, IndieWire, Stage32, and Fandor a few years back.  To the best of my knowledge, it’s still among the most reliable data on the film industry.

The fact that the film industry is considered a mature industry that is not growing by significant margins is also something you’ll also want to mention.  You’ll also want to talk about the sectors of growth within the film industry, as well as where the money tends to come from for independent producers, and a whole lot of other data you’re going to have to find and reference.  As mentioned above, the State of the Film Industry book linked in the banner below has much of this information for you.
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Overall, this section should be about a page long.  The best sources for Metrics are the MPA THEME report and the State of The Film Industry Report. You can find links or downloads of both of those in my free resource pack.

Marketing

The marketing subsection of the plan goes into detail about both the target demographics and target market of your film, as well as how you plan on accessing them.  To quote an old friend and long-time silicon valley strategist Sheridan Tatsuno, Finding your target market is like placing the target, and marketing is like shooting an arrow.  For more detail on how to go about finding your target market, I encourage you to check out the blog below, as my word count restrictions will not let me go too deeply into it here

Related: How do I figure out who to sell my movie to?

Figuring out how you’re going to market the film can be a challenge for many filmmakers.  Generally, I’d advise putting something more detailed than “smart social media strategy.”  I tell most of my clients to focus on getting press, appearing on podcasts, and getting reviews.  Marketing stunts can be great, but timing them is difficult to pull off. 
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All of this being said, you’ll need more to your marketing strategy than simply going to festivals to build buzz. The marketing category at the top of this blog, as well as the audience, community, and marketing, tags at the bottom of the page, are a good place to start.

Distribution

This section talks about how you intend to get your film to the end user.  This section should be an actionable plan on how you intend to attract a distributor.  This section should not be “We’ll get into sundance and then have distributors chasing us!” I hate to break it to you, but you’re probably not going to get into Sundance.  Fewer than 1% of submissions do. 
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The biggest thing you need to answer is whether you plan on attaching a distributor/sales agent or whether you intend to self-distribute.  if you’re not sure, this blog might help you decide. There’s lots more to it, I’d recommend checking the distribution category or the international sales tag on this site to learn more of what you need to write this section.

Related: 6 questions to ask yourself BEFORE self distributing your indiefilm

Somewhere between a quarter and a third of all the blogs on this site are devoted to distribution, so there’s lots of stuff here for you to use when developing this plan.  If you want to develop more of a plan than distributing it yourself, it’s also something I’d be happy to talk to you about it.  Check out my services page for more.

If that’s a bit too much for you but you still want more information about the film business, check out my film business resource package. You’ll get a free e-book, monthly digests segmented by topic, and a packet of film market resources including templates and money-saving resources.

This is part of a 7 part series.  I’ll be updating the various sections as they drop.  So check back and if you see a ling below, it will take you to whatever section you most want to read. 
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Executive Summary
The Company
The Projects
Marketing (This post)
Risk Statement/SWOT Analysis
Financials Section (Text)
Pro-forma Financial Statements.

Check the tags for more content!