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FUNDING YOUR FILMFUNDING YOUR FILMSUCCESSFULLY PITCHING TO INVESTORSSUCCESSFULLY PITCHING TO INVESTORS MATCHING WHAT FILM MAKERS WANT TO SHOW MATCHING WHAT FILM MAKERS WANT TO SHOW
WITH WHAT INVESTORS WANT TO SEEWITH WHAT INVESTORS WANT TO SEE
Patrick O’Heffernan, Ph.D.Patrick O’Heffernan, Ph.D.
Part 1Part 1UNDERSTANDING UNDERSTANDING
INVESTORSINVESTORSInvestors are from Mars
Producers are from Venus
?
You need to know who You need to know who “investors” are to pitch them“investors” are to pitch them
They are not all alike, and they are not all investors.
Accredited/Qualified InvestorsAccredited/Qualified Investors
Qualified investors is a technical term referring to people with a net worth of $1 million or more and/or an annual income of $250,000. All IIFF investors must meet these qualifications
What this meansWhat this means
The have the capacity to invest – they have money they can afford to lose
They may or may not be investing in film (but would not likely be there if not)
They may or maynot invest in your fiom
Seven Reasons people invest in Seven Reasons people invest in independent filmsindependent films Make a lot of money – low cost/high return High risk that balances their portfolio Film can be counter-cyclical A fun investment with acceptable risk They like indie film and indie producers They like being around creative people “Executive Producer” after their name
Five kinds of film investorsFive kinds of film investors(that I have known(that I have known ))
Professional investors Professional investors/portfolio balancers Film specialists
Non-professional investors Causal investors who “know film” “Play money” investors Disposable income investors
Head investors, Heart investorsHead investors, Heart investors
Another way to look at investors
Head investors: focused on ROI Head investors: want facts, audience Head investors: comps are critical
Heart investors: look at the story Heart investors: look at the esthetic Heart investors: look for powerful drama
Sources of funds to explore before Sources of funds to explore before you pitch investors you pitch investors
Friends and family, your own money Pre-sales Tax rebates Film subsidies Negative pickup deals Investors love to see them because they
reduce risk
Tax incentivesTax incentives
States and some cities compete with each other to give tax credits
Tradeable tax credits Cash rebates Exemption from sales tax Can be carried forward
http://www.makingthemovie.info/2006/07/tax-credits-for-filmmakers-state-by.html
Film subsidiesFilm subsidies
Similar and often the same as tax incentives in the US
In other countries, actual payments to producers to film in that country
Canada offers subsidies to US producers – why a lot of TV shows are shot in Vancouver (recently reduced the amounts)
Pre-salesPre-sales
Based on the script and cast, director, etc. Distributor buys the right to distribute a film in
different territories before the film is produced. Requires producers to deliver on certain elements
of content and cast 20% down on agreed rights payment; 80% paid on
delivery Can be used as collateral for production loan
Negative pickupNegative pickup
Contract with a movie studio to buy the movie at a fixed date and for a fixed sum.
Producer must get financing and pay any costs over-budget
Producer obtains loan against the value of the negative pickup contract
Not easy for small indie films
Part 2Part 2BUILDING THE BUILDING THE
PITCHPITCH
Organize your PitchOrganize your Pitch
Key elements: film, team, talent, numbers, distribution, status, schedule, investment
Strategy evolves from who is in the room Content evolves from the project’s status
–determines what you have to show Timing is often dictated but… Be ready with an elevator pitch, venture
pitch, full pitch
Your Team and Crew Your Team and Crew
Important to sign up as many good team members as possible – gives us more confidence
Your hiring reflects how you will manage this production; your ability to attract good technical talent is an indicator of how you will attract cast
We may know them – brings you closer Show us their resumes, track record Use their reels if you don’t have one yet
Line up your talent Line up your talent
The more talent you line up in advance, the more investors trust you
A director and a producer with a track record, or advisors with strong reputations
If possible, sign actors who are respected Reveal conditional contracts and
attachments
Talent attachmentsTalent attachments The talent attachment agreement is an under-
standing that the named actor is 'attached' or is committed to perform, usually with conditions.
Gives us great confidence in the film and in your ability to attract talent and in your business skills.
A pitch with talent attachments is more valuable than one with promises or “talking to” or a talent wish lists.
Sample at - http://www.filmtvcontracts.com/samples/139.html
Do your homeworkDo your homeworkaudience, costs, aftermarket revenuesaudience, costs, aftermarket revenues
Tell us who the audience will be and why and what films they spent money on
Include costs/revenue cuts for distribution, marketing, film festivals, contingencies
Include TV, DVD, sales foreign sales, even licensing applicable
AudienceAudience
Demographics, psychographics What other films this audience has paid
for in the past Why your film will appeal to them (often
obvious) Their size in the film market, the DVD
market
Budgets and ProjectionsBudgets and Projectionsshow us you can be trusted with our show us you can be trusted with our moneymoney
We need to understand how the film will make money
We need to understand that you understand how the film will make money
Base your audience projections on comps, but also look ahead to market changes
Cost budget based on bids and contracts is best
CostsCosts
Above the line and below the line budgets as you would expect
Film festival costs if you are gong that route Insurance, completion bonds Theater fees (50%) Deals with distributors – their % and they
kind of marketing $ they put up
RevenueRevenue
Box office – track out for reasonable period – 1st, 2nd, 3rd run
TV – first run, reruns Foreign rights DVD sales Ancillary markets (airplanes, streaming) Licensing
Investment detailsInvestment details
How much you need What it will be used for How you will hold it/bank it Legal status (equity, loan, units, etc) Priority of payout/ use of first funds in Guarantees, if any Other investors – their place
CompsComps
Comps give investors a yardstick Investors don’t know the comps - saves them
research time You need to know comps to check the reality of
your own estimates Give highs and lows and a full range
• http://www.filmtracker.com• http://www.boxofficemojo.com http://www.worldwideboxoffice.com http://www.the-numbers.com/interactive/news.php http://www.imdb.com/boxoffice/alltimegross?region=world-wide http://www.blssresearch.com/reports/filmrevenue.aspx http://www.nytimes.com/interactive/2008/02/23/movies/20080223_REVENUE_GRAPHIC.html
Distribution PlansDistribution Planskey to selling your moviekey to selling your movie
We need to know how your movie will be distributed
A distribution deal signed before a pitch gets you halfway there
If no deal, who are you talking to, who are you planning to talk to.
Film festivals …let’s talk
Distributor wish listDistributor wish list
POTENTIAL US DISTRIBUTORS • SONY PICTURES CLASSICS• MAGNOLIA• IDP / SAMUEL GOLDWYN• FOX SEARCHLIGHT• LIONSGATE• OVERTURE• MIRAMAX• THE WEINSTEIN COMPANY• SUNDANCE (launching a theatrical division tied to channel)• IFC FILMS• Link TV
Comps that I likeComps that I like
Film/year/cost
US box
office
Foreign box ofice
TV: US TV: world DVD sales Other totals
Film festivals are Film festivals are high risk, high costhigh risk, high cost Very tough, even if you are picked Generally, once is not enough Many extra/hidden costs Look beyond the festivals to distributors Can be a plus, but not as good as a
distribution deal
Slides and leave behindsSlides and leave behinds
Good use of early money –invest in professional production if you don’t have the skills or the time.
If you do the PowerPoint well, you will likely do your film well.
More is not better; better is better. EDIT! Embed video in your PowerPoint Contact information on everything
Leave behindsLeave behinds
Leave something A brochure is best – well done with a
summary of your business case, your film, your crew and talent
Have biz plan or a script ready, but only give to serious people
Offer to email docs to requesters SWAG doesn’t impress me, but….
Five keys to powerful slidesFive keys to powerful slides
Make sure it allows us to understand the film – test it first. Professionally or custom done to reflect your film Save tiny numbers for bizplan – give us financial
summaries we can read More is not better; better is better – each slide has to be
there for a reason Organize for a conclusion, but leave space for questions
Planning your timePlanning your timerehearsing your deliveryrehearsing your delivery Look at your time allocation – where are
you spending the most time Rehearse it to fit the time allowed, then…. Take the time to do it shorter. Special care with two or more presenters
to stay on track and in sync
Summary: Summary: Six Smart ThingsSix Smart Things to do to dowhen pitching your filmwhen pitching your film
1. Show us the revenue.2. Make sure we understand the film.3. Tell us how it will be distributed.4. Line up your talent; then pitch us.5. Tell us how to give you the money.
6. Show us your team and talent.
Part 3Part 3MAKING THE PITCH MAKING THE PITCH
& & GETTING TO “YES”GETTING TO “YES”
Building RapportBuilding Rapportpitching your movie before you pitch itpitching your movie before you pitch it
Research the investors and/or the group BE aware of who you meet in the lobby (rest room,
bar, etc) Sending materials in advance may not be a good
idea. Confirm the meeting, but don’t give them an
excuse to bail. Be prepared for cancellation on the spot – know
the intermediaries, get new appointment
The Critical First MinuteThe Critical First Minute Impression Killers
Not sure where, how to start Multiple presenters who are not necessary Not prepared for technical glitches Inappropriate dress, language, statements Facts wrong No investment vehicle
Impression Builders Well-organized, well-rehearsed, confident Backed up – ready for any problem Have work to show, even from another film Business cards and system for follow through Dressed and pitched for the presentation Investment vehicles ready to go
TimingTiming
Staying on the pitch timing and leaving space for questions tells us you can manage.
Allocate your time: what is most important; what needs the most explaining.
Rehearse, test and listen to the questions. Build in time for technical problems, or
have work around ready while they are fixed
““Head” pitches vs. “Heart” Head” pitches vs. “Heart” pitchespitches A “head” pitch is focused on the ROI – stats on the
audience, the comps, projections…the facts of why this movie will make money
A “heart” pitch is focused on the power of the story, the beauty of the images…qualities of the movie that will grab the investors, and presumably the audience.
Each pitch is a blend, but if you know your audience and you have the materials you can shift focus
May depend on your film, your status, your material.
Staying in Control of the PitchStaying in Control of the Pitch
Organize your pitch so it reaches the conclusion, this is a good investment – here is how to invest.
Decide when to take questions. Control cynics and supporters. Avoid arguments about comps. Don’t hand out materials in advance What to do about cell phones Going overtime.
Using your RadarUsing your Radarscoping out a group pitchscoping out a group pitch Banter before hand if possible to get a feel
for “friendlies”…you can call upon them for reinforcement
Make sure everyone knows who you are and what movie you are pitching
Quickly identify cynics (often the person asking when questions are appropriate)
Making your pitch team countMaking your pitch team count
Who should come? Who should talk? Assign sections to experts. Rehearse and watch each other’s time Help each other with control of the pitch Decide who will be the closer
““But our director can’t be here”But our director can’t be here”
Plan in advance for absences – they happen
Bring him or her in by speakerphone – but check on technology in advance
Be prepared for technical glitches (avoid cell phones or skype)
Consider video – very impressive!!
““@#$%& – the video won’t run”@#$%& – the video won’t run”turning problems into opportunitiesturning problems into opportunities
Bring your DVD Bring your thumb drive Bring your computer Bring your wi-fi card Bring a backup plan – what to do when
nothing works (Stills? Audio? Act out?)
Deploying your materialsDeploying your materials
After, not before or during your pitch Hand out them personally – don’t leave
them to be picked up Go through them with a prospect if
possible Consider emailing video files instead of
handing out DVD’s Give a card, get a card – and then
annotate it.
Wrap up and listen Wrap up and listen
Wrap it up and ask for questions Let investors talk while you listen carefully Anticipate the questions in the pitch, but
have answers ready