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Presentation prepared for Film Angels to help young producers approach funders

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    1. 1. <ul><li>FUNDING YOUR FILM </li></ul><ul><li>SUCCESSFULLY PITCHING TO INVESTORS </li></ul><ul><li>MATCHING WHAT FILM MAKERS WANT TO SHOW WITH WHAT INVESTORS WANT TO SEE </li></ul><ul><li>Patrick O’Heffernan, Ph.D. </li></ul>
    2. 2. Part 1 UNDERSTANDING INVESTORS Investors are from Mars Producers are from Venus ?
    3. 3. You need to know who “investors” are to pitch them <ul><li>They are not all alike, and they are not all investors. </li></ul>
    4. 4. Accredited/Qualified Investors <ul><li>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 </li></ul>
    5. 5. What this means <ul><li>The have the capacity to invest – they have money they can afford to lose </li></ul><ul><li>They may or may not be investing in film (but would not likely be there if not) </li></ul><ul><li>They may or maynot invest in your fiom </li></ul>
    6. 6. Seven Reasons people invest in independent films <ul><li>Make a lot of money – low cost/high return </li></ul><ul><li>High risk that balances their portfolio </li></ul><ul><li>Film can be counter-cyclical </li></ul><ul><li>A fun investment with acceptable risk </li></ul><ul><li>They like indie film and indie producers </li></ul><ul><li>They like being around creative people </li></ul><ul><li>“Executive Producer” after their name </li></ul>
    7. 7. Five kinds of film investors (that I have known ) <ul><li>Professional investors </li></ul><ul><ul><li>Professional investors/portfolio balancers </li></ul></ul><ul><ul><li>Film specialists </li></ul></ul><ul><li>Non-professional investors </li></ul><ul><ul><li>Causal investors who “know film” </li></ul></ul><ul><ul><li>“ Play money” investors </li></ul></ul><ul><ul><li>Disposable income investors </li></ul></ul>
    8. 8. Head investors, Heart investors <ul><li>Another way to look at investors </li></ul><ul><li>Head investors: focused on ROI </li></ul><ul><li>Head investors: want facts, audience </li></ul><ul><li>Head investors: comps are critical </li></ul><ul><li>Heart investors: look at the story </li></ul><ul><li>Heart investors: look at the esthetic </li></ul><ul><li>Heart investors: look for powerful drama </li></ul>
    9. 9. Sources of funds to explore before you pitch investors <ul><li>Friends and family, your own money </li></ul><ul><li>Pre-sales </li></ul><ul><li>Tax rebates </li></ul><ul><li>Film subsidies </li></ul><ul><li>Negative pickup deals </li></ul><ul><li>Investors love to see them because they reduce risk </li></ul>
    10. 10. Tax incentives <ul><li>States and some cities compete with each other to give tax credits </li></ul><ul><li>Tradeable tax credits </li></ul><ul><li>Cash rebates </li></ul><ul><li>Exemption from sales tax </li></ul><ul><li>Can be carried forward </li></ul><ul><ul><li> </li></ul></ul>
    11. 11. Film subsidies <ul><li>Similar and often the same as tax incentives in the US </li></ul><ul><li>In other countries, actual payments to producers to film in that country </li></ul><ul><li>Canada offers subsidies to US producers – why a lot of TV shows are shot in Vancouver (recently reduced the amounts) </li></ul>
    12. 12. Pre-sales <ul><li>Based on the script and cast, director, etc. </li></ul><ul><li>Distributor buys the right to distribute a film in different territories before the film is produced. </li></ul><ul><li>Requires producers to deliver on certain elements of content and cast </li></ul><ul><li>20% down on agreed rights payment; 80% paid on delivery </li></ul><ul><li>Can be used as collateral for production loan </li></ul>
    13. 13. Negative pickup <ul><li>Contract with a movie studio to buy the movie at a fixed date and for a fixed sum. </li></ul><ul><li>Producer must get financing and pay any costs over-budget </li></ul><ul><li>Producer obtains loan against the value of the negative pickup contract </li></ul><ul><li>Not easy for small indie films </li></ul>
    14. 14. Part 2 BUILDING THE PITCH
    15. 15. Organize your Pitch <ul><li>Key elements: film, team, talent, numbers, distribution, status, schedule, investment </li></ul><ul><li>Strategy evolves from who is in the room </li></ul><ul><li>Content evolves from the project’s status –determines what you have to show </li></ul><ul><li>Timing is often dictated but… </li></ul><ul><li>Be ready with an elevator pitch, venture pitch, full pitch </li></ul>
    16. 16. Your Team and Crew <ul><li>Important to sign up as many good team members as possible – gives us more confidence </li></ul><ul><li>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 </li></ul><ul><li>We may know them – brings you closer </li></ul><ul><li>Show us their resumes, track record </li></ul><ul><li>Use their reels if you don’t have one yet </li></ul>
    17. 17. Line up your talent <ul><li>The more talent you line up in advance, the more investors trust you </li></ul><ul><li>A director and a producer with a track record, or advisors with strong reputations </li></ul><ul><li>If possible, sign actors who are respected </li></ul><ul><li>Reveal conditional contracts and attachments </li></ul>
    18. 18. Talent attachments <ul><li>The talent attachment agreement is an under- standing that the named actor is 'attached' or is committed to perform, usually with conditions. </li></ul><ul><li>Gives us great confidence in the film and in your ability to attract talent and in your business skills. </li></ul><ul><li>A pitch with talent attachments is more valuable than one with promises or “talking to” or a talent wish lists. </li></ul><ul><li>Sample at - </li></ul>
    19. 19. Do your homework audience, costs, aftermarket revenues <ul><li>Tell us who the audience will be and why and what films they spent money on </li></ul><ul><li>Include costs/revenue cuts for distribution, marketing, film festivals, contingencies </li></ul><ul><li>Include TV, DVD, sales foreign sales, even licensing applicable </li></ul>
    20. 20. Audience <ul><li>Demographics, psychographics </li></ul><ul><li>What other films this audience has paid for in the past </li></ul><ul><li>Why your film will appeal to them (often obvious) </li></ul><ul><li>Their size in the film market, the DVD market </li></ul>
    21. 21. Budgets and Projections show us you can be trusted with our money <ul><li>We need to understand how the film will make money </li></ul><ul><li>We need to understand that you understand how the film will make money </li></ul><ul><li>Base your audience projections on comps, but also look ahead to market changes </li></ul><ul><li>Cost budget based on bids and contracts is best </li></ul>
    22. 22. Costs <ul><li>Above the line and below the line budgets as you would expect </li></ul><ul><li>Film festival costs if you are gong that route </li></ul><ul><li>Insurance, completion bonds </li></ul><ul><li>Theater fees (50%) </li></ul><ul><li>Deals with distributors – their % and they kind of marketing $ they put up </li></ul>
    23. 23. Revenue <ul><li>Box office – track out for reasonable period – 1 st , 2 nd , 3 rd run </li></ul><ul><li>TV – first run, reruns </li></ul><ul><li>Foreign rights </li></ul><ul><li>DVD sales </li></ul><ul><li>Ancillary markets (airplanes, streaming) </li></ul><ul><li>Licensing </li></ul>
    24. 24. Investment details <ul><li>How much you need </li></ul><ul><li>What it will be used for </li></ul><ul><li>How you will hold it/bank it </li></ul><ul><li>Legal status (equity, loan, units, etc) </li></ul><ul><li>Priority of payout/ use of first funds in </li></ul><ul><li>Guarantees, if any </li></ul><ul><li>Other investors – their place </li></ul>
    25. 25. Comps <ul><li>Comps give investors a yardstick </li></ul><ul><li>Investors don’t know the comps - saves them research time </li></ul><ul><li>You need to know comps to check the reality of your own estimates </li></ul><ul><li>Give highs and lows and a full range </li></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul><ul><ul><li> </li></ul></ul>
    26. 26. Distribution Plans key to selling your movie <ul><li>We need to know how your movie will be distributed </li></ul><ul><li>A distribution deal signed before a pitch gets you halfway there </li></ul><ul><li>If no deal, who are you talking to, who are you planning to talk to. </li></ul><ul><li>Film festivals …let’s talk </li></ul>
    28. 28. Comps that I like Film/year/cost US box office Foreign box ofice TV: US TV: world DVD sales Other totals
    29. 29. Film festivals are high risk, high cost <ul><li>Very tough, even if you are picked </li></ul><ul><li>Generally, once is not enough </li></ul><ul><li>Many extra/hidden costs </li></ul><ul><li>Look beyond the festivals to distributors </li></ul><ul><li>Can be a plus, but not as good as a distribution deal </li></ul>
    30. 30. Slides and leave behinds <ul><li>Good use of early money –invest in professional production if you don’t have the skills or the time. </li></ul><ul><li>If you do the PowerPoint well, you will likely do your film well. </li></ul><ul><li>More is not better; better is better. EDIT! </li></ul><ul><li>Embed video in your PowerPoint </li></ul><ul><li>Contact information on everything </li></ul>
    31. 31. Leave behinds <ul><li>Leave something </li></ul><ul><li>A brochure is best – well done with a summary of your business case, your film, your crew and talent </li></ul><ul><li>Have biz plan or a script ready, but only give to serious people </li></ul><ul><li>Offer to email docs to requesters </li></ul><ul><li>SWAG doesn’t impress me, but…. </li></ul>
    32. 32. Five keys to powerful slides <ul><li>Make sure it allows us to understand the film – test it first. </li></ul><ul><li>Professionally or custom done to reflect your film </li></ul><ul><li>Save tiny numbers for bizplan – give us financial summaries we can read </li></ul><ul><li>More is not better; better is better – each slide has to be there for a reason </li></ul><ul><li>Organize for a conclusion, but leave space for questions </li></ul>
    33. 33. Planning your time rehearsing your delivery <ul><li>Look at your time allocation – where are you spending the most time </li></ul><ul><li>Rehearse it to fit the time allowed, then…. </li></ul><ul><li>Take the time to do it shorter. </li></ul><ul><li>Special care with two or more presenters to stay on track and in sync </li></ul>
    34. 34. Summary: Six Smart Things to do when pitching your film <ul><li>1. Show us the revenue. </li></ul><ul><li>2. Make sure we understand the film. </li></ul><ul><li>3. Tell us how it will be distributed. </li></ul><ul><li>4. Line up your talent; then pitch us. </li></ul><ul><li>5. Tell us how to give you the money. </li></ul><ul><li>6. Show us your team and talent. </li></ul>
    35. 35. Part 3 MAKING THE PITCH & GETTING TO “YES”
    36. 36. Building Rapport pitching your movie before you pitch it <ul><li>Research the investors and/or the group </li></ul><ul><li>BE aware of who you meet in the lobby (rest room, bar, etc) </li></ul><ul><li>Sending materials in advance may not be a good idea. </li></ul><ul><li>Confirm the meeting, but don’t give them an excuse to bail. </li></ul><ul><li>Be prepared for cancellation on the spot – know the intermediaries, get new appointment </li></ul>
    37. 37. The Critical First Minute <ul><li>Impression Killers </li></ul><ul><ul><li>Not sure where, how to start </li></ul></ul><ul><ul><li>Multiple presenters who are not necessary </li></ul></ul><ul><ul><li>Not prepared for technical glitches </li></ul></ul><ul><ul><li>Inappropriate dress, language, statements </li></ul></ul><ul><ul><li>Facts wrong </li></ul></ul><ul><ul><li>No investment vehicle </li></ul></ul><ul><li>Impression Builders </li></ul><ul><ul><li>Well-organized, well-rehearsed, confident </li></ul></ul><ul><ul><li>Backed up – ready for any problem </li></ul></ul><ul><ul><li>Have work to show, even from another film </li></ul></ul><ul><ul><li>Business cards and system for follow through </li></ul></ul><ul><ul><li>Dressed and pitched for the presentation </li></ul></ul><ul><ul><li>Investment vehicles ready to go </li></ul></ul>
    38. 38. Timing <ul><li>Staying on the pitch timing and leaving space for questions tells us you can manage. </li></ul><ul><li>Allocate your time: what is most important; what needs the most explaining. </li></ul><ul><li>Rehearse, test and listen to the questions. </li></ul><ul><li>Build in time for technical problems, or have work around ready while they are fixed </li></ul>
    39. 39. “ Head” pitches vs. “Heart” pitches <ul><li>A “head” pitch is focused on the ROI – stats on the audience, the comps, projections…the facts of why this movie will make money </li></ul><ul><li>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. </li></ul><ul><li>Each pitch is a blend, but if you know your audience and you have the materials you can shift focus </li></ul><ul><li>May depend on your film, your status, your material. </li></ul>
    40. 40. Staying in Control of the Pitch <ul><li>Organize your pitch so it reaches the conclusion, this is a good investment – here is how to invest. </li></ul><ul><li>Decide when to take questions. </li></ul><ul><li>Control cynics and supporters. </li></ul><ul><li>Avoid arguments about comps. </li></ul><ul><li>Don’t hand out materials in advance </li></ul><ul><li>What to do about cell phones </li></ul><ul><li>Going overtime. </li></ul>
    41. 41. Using your Radar scoping out a group pitch <ul><li>Banter before hand if possible to get a feel for “friendlies”…you can call upon them for reinforcement </li></ul><ul><li>Make sure everyone knows who you are and what movie you are pitching </li></ul><ul><li>Quickly identify cynics (often the person asking when questions are appropriate) </li></ul>
    42. 42. Making your pitch team count <ul><li>Who should come? Who should talk? </li></ul><ul><li>Assign sections to experts. </li></ul><ul><li>Rehearse and watch each other’s time </li></ul><ul><li>Help each other with control of the pitch </li></ul><ul><li>Decide who will be the closer </li></ul>
    43. 43. “ But our director can’t be here” <ul><li>Plan in advance for absences – they happen </li></ul><ul><li>Bring him or her in by speakerphone – but check on technology in advance </li></ul><ul><li>Be prepared for technical glitches (avoid cell phones or skype) </li></ul><ul><li>Consider video – very impressive!! </li></ul>
    44. 44. “ @#$%& – the video won’t run” turning problems into opportunities <ul><li>Bring your DVD </li></ul><ul><li>Bring your thumb drive </li></ul><ul><li>Bring your computer </li></ul><ul><li>Bring your wi-fi card </li></ul><ul><li>Bring a backup plan – what to do when nothing works (Stills? Audio? Act out?) </li></ul>
    45. 45. Deploying your materials <ul><li>After, not before or during your pitch </li></ul><ul><li>Hand out them personally – don’t leave them to be picked up </li></ul><ul><li>Go through them with a prospect if possible </li></ul><ul><li>Consider emailing video files instead of handing out DVD’s </li></ul><ul><li>Give a card, get a card – and then annotate it. </li></ul>
    46. 46. Wrap up and listen <ul><li>Wrap it up and ask for questions </li></ul><ul><li>Let investors talk while you listen carefully </li></ul><ul><li>Anticipate the questions in the pitch, but have answers ready </li></ul>
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