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.  

How to Vet your Sales Agent or Distributor

Every filmmaker has heard horror stories of distribution deals gone wrong.  Sometimes this is due to something completely unpredictable like a change in the demands of buyers or distributors, or a freak occurrence that makes the movie unpalatable.   More often than not, however, this is due to a poorly negotiated deal with a less-than-reputable sales agent.  So with that in mind, it’s incredibly important that you vet your sales agent.  Here are a few ways to do just that.

1. Get Professional Help

Distribution deals are complicated things.  It’s easy for one clause that seems innocuous to strip thousands of dollars out of your pocket.   Get yourself an entertainment attorney or producer’s rep to help you through the process.  Entertainment attorneys are generally expensive but can save you money in the long term.  Producer’s reps SHOULD work on a commission for brokerage tasks, but may or may not be able to negotiate as well as they claim. ​ Often, it’s wise to have both a rep and an attorney, as reps focus on general salability whereas

Related: What does a Producer's Rep DO Anyway?

If you can’t afford an attorney and are wary of hiring a producer’s rep then take extra time on the next several steps. ​

2. Carefully Review their base distribution agreement

There’s always some room for negotiation in these agreements, but it the arrangement is too far off of what you’re hoping for from a starting point, then the deal is unlikely to be any good.  Good places to look are at the recoupable expenses and the sales agency commission.  If the sales agent’s commission is higher than 30%, proceed with extreme caution.  If it’s higher than 35%, you probably don’t want to deal with that sales agent.

Related: The 7 Main IndieFilm Distribution Deal Points

Similarly, is the recoupable are higher than about 25,000-30,000, you should be VERY careful on dealing with them if you have a lower budget film.  If they’re at this level, you’ll want them to attend at least 5-7 markets.  That segues nicely to.

3. Ask the Sales Agent Which Markets They Attend

Traditional Film Sales and Distribution still happens primarily through face-to-face meetings at markets.  Establishing good relationships with buyers takes several touchpoints a year.  In order to really trust a sales agent with your film, you need them to attend both Cannes and AFM at a minimum.  Ideally, you want them attending EFM as well, but that market is slightly more arthouse so it can be given a miss if you’ve made a genre picture. If they don’t attend EFM, they should attend Hong Kong FilmMart.
​

Read More: What is a Film Market and How Do They Work?

4. Look the Sales Agent Up on IMDb

You need to verify some of the films that the sales agent has helped distribute recently.  Looking them up on IMDb is a great way to get started.  You’ll want to look for films that are similar in genre and feel to yours, and you’ll want them to have represented quite a few films in the last 3-5 years. You should be able to find a lot of information on the company they’re working with if you have IMDb Pro, but sometimes sales companies change their names without much notice. That’s a red flag if it happens, but it’s not necessarily a dealbreaker. If it does happen, just use IMDb to look up the acquisition agent you’re dealing with.

If you have access to it, you should also look them up on Cinando. It’s worth noting that many sales companies do not keep their Cinando Profiles as up-to-date as they should.

5. Visit the Sales Agent Website

The Website of the sales agent will help you understand what they’re currently promoting.  It will also have some things that IMDb won’t.  These are things like recent press coverage, and links to their other social media profiles.  You want the sales agent to have gotten your films a good amount of press.

6. Call Filmmakers they've worked with in the past. 

If you take only one thing away from this article, let it be this.  ALWAYS call filmmakers the Sales agency has worked with in the past prior to doing a deal with them.  Filmmakers they’ve worked with in the past are the best way to get an unbiased account of whether the sales agent lives up to expectations laid out in their contract.  While other sales agents will give you opinions on that front, the sales agency game is quite competitive, so they might overstate the issues with their competition to gain a competitive edge.

Thanks for reading! If you like this, and decided you need professional help when dealing with sales agents, check out the Guerrilla rep media services page. We know the players in the game and can help you get to your goal faster. If you just want to learn more, check out the free indie film business resource pack for a free ebook, templates to help you track contact with sales agents, and even form letters to get you started on reaching out to them. These won’t substitute for professional help, but they’re a good place to start.

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5 Rules for Vetting Your Producer’s Rep

The term producer’s rep has been given a bad name.  A lot of people think that Producer’s reps are just money-grubbing middlemen (or middlewomen, or middlethems) who don’t add any value to your project.  As a producer’s rep myself, I’d like to take issue with the narrative that producer’s reps are slimy con artists who will overcharge you without adding value.  Unfortunately, I can’t.  For the most part, the rumors exist for a reason.

So with that in mind, here are 5 ways to vet your producer’s rep. If you want to sign up with me, do the same.

​Ask what their upfront fees are.

If you’re simply looking for a rep to broker your completed film, then the upfront fees should be very low, or nonexistent then they’ll take a piece of the pie for the length of the deal. There are producer’s representatives who operate on a service basis, I.E. they’ll be paid a few thousand dollars with half up front, half on success. In theory, you end up paying less this way, but the incentives are not always in line with the filmmaker’s best interest.

I’ve heard stories of other reps charging 5000 dollars to represent a film to various sales agencies.  If the Rep got you a deal, the rep would then retain 35% of all money from that deal.  This is without even negotiating for a better deal with the sales agency, essentially just making a few calls and writing a few emails.  

Not all service deals are bad, but you have to do extra diligence if that’s how your rep operates.

Also, it should be noted that if you want your rep to do anything other than basic brokering, you should expect to pay them. When I work with filmmakers at an early stage to guide investment decks, help attach talent, write business plans, or any other consulting-oriented services, you should expect to pay some not-insignificant fees. Nobody on a film shoot should be asked to work for free, including us. We still have bills, and it took a lot of investment for us to develop our skills and contacts.

Related: What Does a Producer's Rep DO Anyway?

For straight representation/brokerage services, I charge nothing upfront, and as of this writing, I don’t even charge recoupable expenses.  I charge 10% for connection to sales agents, and 18% if I sell directly to buyers.  (Generally only domestically.)  I also negotiate with sales agencies and buyers to get you/us the best possible deal. 

That being said, brokerage tasks for completed films are the only thing I don’t charge upfront for.  For other tasks, I either charge by the hour or by the job, sometimes with performance bonuses or deferments. ​

2.   Ask them if they watched your movie.

If they’re offering to represent your movie, they had better have watched it.  If they try to say that they don’t remember the film because they watched 8 last week, they’re probably lying.  I watch 5-8 a week.  If I’m making an offer I’ve probably watched it all.  If I don’t think I can sell it, I stop after 20 minutes. ​

Most sales agents and Producer's Reps have a similar system.  If they can't say some specifics about your film, they're probably lying about watching it.  

3. Look them up on imdb.

You want someone who’s not all talk.  You want to see some associate, co-, and executive producing credits on their IMDb.  I generally ask to be credited as an executive producer because it’s the most accurate credit for the job I do. 

If you want to check out what I’ve done, here’s my imdb,

VISIT MY IMDB

4.  Ask them who they have direct relationships with

Any good rep will have existing relationships with some sales agencies.  That’s why you would want to hire them in the first place.  Great reps will have direct relationships with buyers.  If they can’t list out a few sales agencies that they’ve worked with in the past off the top of their head, then they’re probably not going to do their job very well. 

While I won’t list the ones I’ve worked with here, I will tell you if you ask me when on a call or after you submit your film below.

5. Call 3 of their previous clients

This is true for both Producer’s Reps and Sales Agencies.  You’ve GOT to call the clients of your rep and ask for a reference.  If you ask for references and your rep gets upset, then it’s likely a sign you shouldn’t use their services.  Honestly, It’s better if you just look up those filmmakers on IMDb and call them yourself. You can find all the necessary info on imdbPro.

Thanks so much for reading! If you’re looking for a producer’s rep, you should check out my services page. If you’re not quite there yet, but want to more know about the film biz, you should join my mailing list and get my FREE Film market resource package. Links below in the buttons.

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5 Steps to Vetting your investor

Just like all filmmakers and Entrepreneurs are not created equal, nor are all “Rich Guys.” Many will jerk you around, and not actually deliver on what they promise. So how do you know if your potential investor is legit? Well, here are a few tips.

Note: This Article is largely in response to a piece by Jason Brubaker at Filmmaking stuff. Overall it’s a good piece, but I felt it lacking a few things so I’m expanding it with my thoughts. You can find the original article here. Even though Jason was a bit too involved with Distribbr and that whole debacle, he did make some good content so my response blog is getting a port.

1. Look them up online (Duh)

You need to know who you’re dealing with, so before you meet with them you should do some diligence. The goal of this step is just to ensure they have money, and get an idea of whether they’ll be likely to spend it.

You want to find out what they’ve done, and where they got their money. Generally start by looking them up on AngelList and Slated. These sites do some pretty deep vetting for to make sure that investor members are accredited. They’ll also list the previous investments of the investor, so you can see how they stack up against yours.

Slated is strictly for film, AngelList is focused on Tech. If they have active profiles on these sites, then you know that they are active investors. Active investors are more likely to invest.

If they don’t have either of those profiles, look at their LinkedIn. Generally Linkedin will show you previous positions, if they have multiple executive positions at companies with more than 15 employees, or list that their company was sold to a bigger company they probably have excess capital to invest.

If you’re too far away from them to see their full Linkedin profile, google them. If they have a profile in Forbes or Bloomberg, you’re set. If they have a ton of lawsuits or if you find something saying they, I Don’t Know, tried to buy a baseball team but were laughed out of the room then lambasted by a major newspaper, maybe steer clear. Totally not at all a real example, by the way.

2.Look at what they’re wearing and what they’re driving.

As Brubaker says, this technique is far from perfect. Sometimes the guy in the three-piece suit has less capital than the girl in the jean jacket and yoga pants. However, there are some things you can take into account. Fashion is highly dependent on the area you live in. Here in Silicon Valley, it’s common for the people in sweats to be worth more and be more likely to invest than the suits. Try to understand the cut of the clothes, and get an eye for designers. I know some people who wear T-shirts that cost more than I paid for my first Armani suit. Admittedly, I bought that suit secondhand.

But there are some constants. Before you look at the clothes, look at the shoes. People, especially men, overlook the importance of shoes to the overall aesthetic, but they’re a relatively constant indicator of wealth. Watches are also a good indicator of status.
​
Whatever make or model of car they drive will give you a good idea of how much they’re worth. Generally make is better than model, for example, hybrids are big here in the bay. for a time, a Prius was a status symbol. Now that most luxury brands have a hybrid, the make is generally a good metric to judge by. Teslas are still a great indicator.

​3.Do they pick up the check?

Here’s one that I totally disagree with Jason on. He makes the point that if he can’t pick up a 50 check you’re not getting a 50,000 dollar check from them. Whether or not an investor picks up the check is largely dependent on a few factors. If they’re an independent angel investor, they can take about 8 meetings with entrepreneurs a week. If they always picked up the check, they wouldn’t be an accredited investor for long. Also, most of the rich guys I know are surprisingly stingy.

Generally, if it’s a first meeting I split the check. I pay for my seat at the table, they pay for theirs. A fear of many legitimate angel investors is whether or not the entrepreneur is going to carry their weight, so in a way splitting the check is symbolic of what a good relationship with an investor should be. Future meetings are up for debate.

4. If they’re talking about “Money Coming In” it’s BS.

Jason is completely correct on this one. Unless the startup they were one of the first ten employees at a is about to IPO, (You can google that, and easily fact-check it) that money won’t come in.

However, if they say their money is tied up, that’s a different story. Savvy Rich people don’t let their money sit in a checking or savings account. They invest it. Most of the time, they’ll have a respectable stock portfolio. That means they’ll have to sell something (Liquidate Assets) in order to free up money to invest in your projects. Here’s a tool to help them to do that.

5. Is it too Easy?

It may sound counterintuitive, but if it’s too easy to get the check that should be a huge red flag. I’ve worked in Silicon Valley and Hollywood, and it’s never easy. It requires finesse, charisma, and luck. Just like you need to do your homework, your investors need to do homework on you. They will need a deck, a business plan, and a good relationship in order to give you a check.

This analogy is crass, but the more I play this game the more I realize the truth behind it. Getting investment is like dating. You have to get to know each other first. Then you figure out if you like each other you figure out if you could work well together. Finally, after 3–7 excellent meetings and more phone calls and messages, you get into bed together. Often the more meetings it takes to get into bed, the better the relationship will be. That’s not always the case though.

If you want more like this, you should grab my free film market resource package. It’s got lots of templates to help you talk to investors and distributors including deck templates form letters, and tracking sheets as well as money-saving resources and a free e-book.

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