How to get investors the right way!

When getting money for your film from investors, there are a lot of ways to go about this. Some ways are better than others.

Find Investors Locally

Finding investors is incredibly difficult when starting out. Finding investors is difficult even if you’ve already made a film. Often times filmmakers are looking for investors that are already attached to the filmmaking world.

However, there is untapped opportunity to find investors who have never thought of a film as an addition to their portfolio, and best of all, they are local.

With over 25 million millionaires the chances that one of them lives in your city is highly likely, even if you little in a small city. In some cities there will be thousands of millionaires.

How do you find them?

A little research will go a long way. Even the most simple approaches may give you a handful of names. Look up the owners of:

• The top real estate in your city. Can you find the name of the owner of million dollar houses?

• Look up the names of the owners of local franchises? Does someone local own the McDonalds or Subway franchise?

• Are there other local businesses that are doing very well? Who owns them?

• Just ask your own network. Do they know someone that fit into the above list?

Once you have some names, you will need to set out to find email addresses and phone numbers. Especially if it is local, you can try to get someone on the phone just to request a quick chat in person. Offer to buy them a cup of coffee for a 15 minute chat or ask if you can get them on the phone again for a 15 minute chat. Keep that chat window small so that you show you understand their time is precious.

Why local matters.

Find investors local has a few major benefits. First, you have the potential to actually find the names of individuals with money. Secondly, you give the investor the opportunity to be a part of the film and filmmaking process. This is not say you should give them any say or control over the project, but that they can see what goes on during pre-production, they can visit the set during production, they can check out the editing suite during post-production and of course can attend a premiere event if you chose to host one in your city.

A sense of trust and security is established by being local. By doing your own research and reaching out to them, you have already shown them you are capable of taking on unique challenges. Also, seeing the filmmaker face to face, knowing the filmmaker will use their money in the city they live in will give them security about how the money is being spent.

The added benefit to the pitch outside of your great film project and outside of return on investment (ROI) is that the investor will be a part of something that is taking place in their community. They are adding to their community and may very well be recognized for their commitment to the intersection of art and business - which a film is.

More important than anything, by being local, by meeting in person, you can build trust.

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The Right Material

You have found your investor but do you have the right material in place to attract them. Almost everyone has a pitch deck together, usually filled with beautiful images, bold text, enticing logline, and synopsis, with those fantastically written bios of the writer, director, producer.

None of that matters.

It does matter but not in the way most filmmakers pitching to investors think. That is the second or even last piece of documentation you show them. You need to start with the thing they care about most.

• How of their money do you need?

• How will their money be spent?

• How do you go about trying to make an ROI on their money?

In essence, you need to convince the investor that their money could potentially be better off with your film than just sitting in the bank where it will forever be safe. The filmmaking side of it is how you tap into that emotional investment. It may be worth the risk of the money because it will be fun to be involved in the making of a movie. Now, you need to think about the business side of it.

The Film Business Plan

A film is a business. You have an idea, you need money to make that idea, in order to make that idea you need to hire people who all work together to build the product, and then you need to market that product, then you need to ensure people consume that product. Idea, film, audience.

The film business plan will layout how you will think about your movie like a business.

• How much money is needed?

• How will that money be allocated to the different areas to make the film? Also known as the budget.

• How will you market and advertise that film?

• How will people consume that film? In a theatre? On streaming? On YouTube?

• How are the creative and logistical heads running the film? Direct, Producer, DP, HOD, et cetera.

• How much money will the investor potentially get back? Is it pro rata return, or fixed return, or a variation?

The film business plan will lay all of this out. You can get a copy of a free Film Business Plan here.

The PPM

Private Placement Memorandum (PPM) is is the legal document that governs the terms and conditions of the investment made by outside investors and the LLC that is receiving the investment. I say LLC but it could be any corporate entity, but you will likely register an LLC for your film.

Taking an investment into your film falls under the regulations of the SEC, so you need to ensure you are taking all of the appropriate legal measures to accept money from an investor. The PPM protects you and the investor. It is very likely the investor will want you to have a PPM in place.

You can get the PPM plus a lot of other useful agreements and templates here.

It is always highly recommended to consult with legal advice when drafting your PPM for investors or any other contracts.

It’s simple but not it’s not easy.

Once you have mastered the above, you can take the next step and cold email film financing companies, film investors, studios, or producers.

Getting a yes is hard. With the right tools in place and with continued practice, you will be able to find an investor to get behind your film. The more of the steps you take yourself the greater filmmaker you will become. Do the hard work now so that it becomes easier later on.

If you seek out investors now and take the local grassroots approach to making your film, later on producers and studios will see that you have the creative and logistical mindset to get a film made. They will then be coming to you, asking you to make their next film.

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