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Presentation prepared for Film Angels to help young producers approach funders

Presentation prepared for Film Angels to help young producers approach funders

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  • 1.
    • Patrick O’Heffernan, Ph.D.
  • 2. Part 1 UNDERSTANDING INVESTORS Investors are from Mars Producers are from Venus ?
  • 3. You need to know who “investors” are to pitch them
    • They are not all alike, and they are not all investors.
  • 4. Accredited/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
  • 5. What 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
  • 6. Seven Reasons people invest in independent 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
  • 7. Five kinds of film investors (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
  • 8. Head 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
  • 9. Sources of funds to explore before 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
  • 10. Tax 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
  • 11. Film 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)
  • 12. Pre-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
  • 13. Negative 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
  • 15. Organize 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
  • 16. 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
  • 17. 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
  • 18. Talent 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
  • 19. Do your homework audience, 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
  • 20. Audience
    • 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
  • 21. Budgets and Projections show us you can be trusted with our money
    • 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
  • 22. Costs
    • 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
  • 23. Revenue
    • Box office – track out for reasonable period – 1 st , 2 nd , 3 rd run
    • TV – first run, reruns
    • Foreign rights
    • DVD sales
    • Ancillary markets (airplanes, streaming)
    • Licensing
  • 24. Investment 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
  • 25. Comps
    • 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
  • 26. Distribution Plans key 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
  • 28. Comps that I like Film/year/cost US box office Foreign box ofice TV: US TV: world DVD sales Other totals
  • 29. Film festivals are high 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
  • 30. Slides 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
  • 31. Leave 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….
  • 32. Five 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
  • 33. Planning your time rehearsing 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
  • 34. Summary: Six Smart Things to do when 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.
  • 36. Building Rapport pitching 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
  • 37. The 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
  • 38. Timing
    • 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
  • 39. “ Head” pitches vs. “Heart” pitches
    • 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.
  • 40. Staying 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.
  • 41. Using your Radar scoping 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)
  • 42. Making 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
  • 43. “ 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!!
  • 44. “ @#$%& – the video won’t run” turning 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?)
  • 45. Deploying 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.
  • 46. 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