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Creative productions and financing:

Some thoughts and learnings




                                 Tommi Pelkonen
     ...
•   Global organisation of international business and consulting
Finpro in brief       professionals (~350 experts in abov...
•   Global organisation of international business and consulting
Finpro in brief           professionals (~350 experts in ...
•   Global organisation of international business and consulting
Finpro in brief           professionals (~350 experts in ...
•   Global organisation of international business and consulting
Finpro in brief           professionals (~350 experts in ...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
Introduction: learnings from megaprojects




   It is not about ROI (return on investment), it is
             about retu...
What are we talking about?




   Project Finance: The financing of an asset where
    debt service and returns on equity ...
Financing as structure




    Sharing future revenues may a new source of
     financing also for digital media productio...
Financing as structure




    Sharing future revenues may a new source of
     financing also for digital media productio...
Financing as structure




    Sharing future revenues may a new source of
     financing also for digital media productio...
Reality: answering tough questions from financiers?




    NOTE: Regardless of these, they may ALSO
    have personal int...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
Reality: answering tough questions from financiers?
•   I’m afraid I can’t remember how this meeting was set up and I don’...
What’s on financier’s mind?




 And you had a humble wish that they would be sinceraly
      interested about you and you...
Multimedia producer’s concerns and trends

•   Companies are small and even smaller
•   Business is creative process drive...
Sources of finance for creative projects




             Mandate: aim to understand each group’s
            motives and ...
Funding for digital media productions




        Can you position your production into this
                  chain and s...
Hint 1: Pitch in a structured manner




Standardise & be ready to show them the money in max 10 min!
                    ...
Hint 2: Use financiers’ lingua = numbers!
  Express your ideas in form of:    Show and know the number game_

• Profitabil...
Hint 3: Understand the motives of your investor




             Talk to stakeholders with their motives in mind
         ...
Hint 4: Convince them of you passion!


• Investors want to work with passionate entrepreneurs
  they can trust on:
   • S...
SUMMARY: How to make your financier to
believe in you?

• The availability of funds depends on the ability to
  convince p...
Remember: Do not think that financier = easy access to money




                                                         ...
Remember: Do not think that financier = easy access to money




                                                         ...
Questions, thoughts,
   comments...




                       17
18
For more
    information




tommi.pelkonen@finpro.fi
   +36 -20 - 250 10 77


                         18
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Europrix 2008 Creative Productions Financing Pelkonen

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Presentation on creative business financing challenges at Europrix 2008 in Graz.

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Transcript of "Europrix 2008 Creative Productions Financing Pelkonen"

  1. 1. Creative productions and financing: Some thoughts and learnings Tommi Pelkonen Business Consultant Finpro Hungary November 28, 2008 / © Finpro ry / 1
  2. 2. • Global organisation of international business and consulting Finpro in brief professionals (~350 experts in above 40 countries) • Works to help Finnish companies to succeed wherever they are / © Finpro ry / 2
  3. 3. • Global organisation of international business and consulting Finpro in brief professionals (~350 experts in above 40 countries) • Works to help Finnish companies to succeed wherever they are !quot;#$%& '()*)+#)& 3/(quot;+4%0& 56++6*7& (quot;quot;/*& ,+/)(+$2quot;8 ,+-.*/(0& +$%6*$2quot;+& )1')(2*)& )1')(2*)& / © Finpro ry / 2
  4. 4. • Global organisation of international business and consulting Finpro in brief professionals (~350 experts in above 40 countries) • Works to help Finnish companies to succeed wherever they are !quot;#$%& '()*)+#)& 3/(quot;+4%0& 56++6*7& PROCESS (quot;quot;/*& ORGANISATION ,+/)(+$2quot;8 ,+-.*/(0& +$%6*$2quot;+& )1')(2*)& )1')(2*)& / © Finpro ry / 2
  5. 5. • Global organisation of international business and consulting Finpro in brief professionals (~350 experts in above 40 countries) • Works to help Finnish companies to succeed wherever they are !quot;#$%& INSIGHT '()*)+#)& FORESIGHT 3/(quot;+4%0& 56++6*7& PROCESS (quot;quot;/*& ORGANISATION ,+/)(+$2quot;8 ,+-.*/(0& +$%6*$2quot;+& )1')(2*)& )1')(2*)& / © Finpro ry / 2
  6. 6. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  7. 7. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  8. 8. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  9. 9. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  10. 10. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  11. 11. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  12. 12. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  13. 13. Introduction: learnings from megaprojects It is not about ROI (return on investment), it is about return OF investments! / © Finpro ry / 3
  14. 14. What are we talking about? Project Finance: The financing of an asset where debt service and returns on equity are derived from the cashflows generated by the asset / © Finpro ry / 4
  15. 15. Financing as structure Sharing future revenues may a new source of financing also for digital media productions / © Finpro ry / 5
  16. 16. Financing as structure Sharing future revenues may a new source of financing also for digital media productions / © Finpro ry / 5
  17. 17. Financing as structure Sharing future revenues may a new source of financing also for digital media productions / © Finpro ry / 5
  18. 18. Reality: answering tough questions from financiers? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  19. 19. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  20. 20. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  21. 21. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. • Do you really think you have the right experience to be the CEO of the company after this possible deal? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  22. 22. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. • Do you really think you have the right experience to be the CEO of the company after this possible deal? • Please tell me about the technology/solution/product/service/ production and the market you’re going after. NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  23. 23. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. • Do you really think you have the right experience to be the CEO of the company after this possible deal? • Please tell me about the technology/solution/product/service/ production and the market you’re going after. • What segment of the market are you targeting and what is the competition doing in that market segment? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  24. 24. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. • Do you really think you have the right experience to be the CEO of the company after this possible deal? • Please tell me about the technology/solution/product/service/ production and the market you’re going after. • What segment of the market are you targeting and what is the competition doing in that market segment? • Can you describe the technology architecture / production process and whether any of your technology / solution / product could be considered proprietary? Have you looked at the intellectual property rights around your offerings? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  25. 25. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. • Do you really think you have the right experience to be the CEO of the company after this possible deal? • Please tell me about the technology/solution/product/service/ production and the market you’re going after. • What segment of the market are you targeting and what is the competition doing in that market segment? • Can you describe the technology architecture / production process and whether any of your technology / solution / product could be considered proprietary? Have you looked at the intellectual property rights around your offerings? • How much capital do you need to get started? How will you plan to pay my/our money back? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  26. 26. Reality: answering tough questions from financiers? • I’m afraid I can’t remember how this meeting was set up and I don’t have any documents. Can you please remind me who referred you to me? • Please give me your personal backgrounds and tell me the story of how you know each other. • Do you really think you have the right experience to be the CEO of the company after this possible deal? • Please tell me about the technology/solution/product/service/ production and the market you’re going after. • What segment of the market are you targeting and what is the competition doing in that market segment? • Can you describe the technology architecture / production process and whether any of your technology / solution / product could be considered proprietary? Have you looked at the intellectual property rights around your offerings? • How much capital do you need to get started? How will you plan to pay my/our money back? • What valuation are you putting on the deal, and are you speaking with other finaciers? NOTE: Regardless of these, they may ALSO have personal interest towards your project! / © Finpro ry / 6
  27. 27. What’s on financier’s mind? And you had a humble wish that they would be sinceraly interested about you and your production! :) / © Finpro ry / 7
  28. 28. Multimedia producer’s concerns and trends • Companies are small and even smaller • Business is creative process driven • Producer mindset determining outcome • Finance is needed for development and implementation of creative processes, productions and projects • Competence and content key issues in assessment and evaluation • Combining creative and other professional resources crucial management challenge • Individual insight must in hit driven business • Messy business models • Lacking knowledge and expertise to fullfill investment criteria • Perceptions of the investors – lacking knowledge of creative businesses • Tailored financial tools not available - project development funding is needed Financiers, at best, know these and want to see how you cope with them! / © Finpro ry / 8
  29. 29. Sources of finance for creative projects Mandate: aim to understand each group’s motives and needs for security on investment / © Finpro ry / 9
  30. 30. Funding for digital media productions Can you position your production into this chain and struture? / © Finpro ry / 10
  31. 31. Hint 1: Pitch in a structured manner Standardise & be ready to show them the money in max 10 min! / © Finpro ry / 11
  32. 32. Hint 2: Use financiers’ lingua = numbers! Express your ideas in form of: Show and know the number game_ • Profitability: Ability to • Balance Sheet generate earnings/savings. • Income Statement • Liquidity: Measures • Statement of Cash Flows shortterm cash flow ability. • Changes in Financial • Solvency: Indicates Statements longterm financial health and stability. • Efficiency/Coverage: Suggests how well things are done. Put some of that passion to digital media into basics of business language! / © Finpro ry / 12
  33. 33. Hint 3: Understand the motives of your investor Talk to stakeholders with their motives in mind / © Finpro ry / 13
  34. 34. Hint 4: Convince them of you passion! • Investors want to work with passionate entrepreneurs they can trust on: • Substance • Ambition • Managing productions / projects • Track record • Competitive edge • Team of multi-talents • Business-understanding Show you passion - but keep science fiction out of the table :) / © Finpro ry / 14
  35. 35. SUMMARY: How to make your financier to believe in you? • The availability of funds depends on the ability to convince providers of funds that the project is: • Lead and created by a team of trustworthy & talented people • Technically feasible • Ability to perform & deliver • Economically viable and profitable (with right motive) • You should talk their language - as much as they try to understand what you try to offer for them! • Develop your edge - not only conceptually and artistically, but also in your business-orientation! We know you can design excellent productions. BUT: can you design also you finance structure and approach? / © Finpro ry / 15
  36. 36. Remember: Do not think that financier = easy access to money / © Finpro ry / 16
  37. 37. Remember: Do not think that financier = easy access to money / © Finpro ry / 16
  38. 38. Questions, thoughts, comments... 17
  39. 39. 18
  40. 40. For more information tommi.pelkonen@finpro.fi +36 -20 - 250 10 77 18
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