NEWSLETTER:  THE FILM ENTREPRENEUR
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What equity investors look (and look out) for

Equity investors are just like us, except they have a great deal more money. They vary in their reasons for investing in films just as filmmakers vary in their reasons for wanting to make films. And the bridge between filmmakers and private investors is a well-written business plan. Your single most important talent in preparing a plan is common sense. Know your audience (and yourself) so that you can choose the right attention-getting theme. Remember: people raise money; business plans are only a tool toward that end.

A PRUDENT PLAN...An investor wants a business plan showing your intentions over the next three (one film) to five (multiple films) years. A project that you can easily explain and justify works best. It should be long enough to show how everyone will make money over the time period. On the other hand, a plan should not be too heavy to lift. Plan ahead and have a scenario to show the potential success of the project in terms of audience approval and financial projections. You will score more points than the person who does not do this.

HEDGING THEIR BET...Too many filmmakers assume that profits are not important. Investors are gamblers and risk-takers. By no stretch of the imagination is film a rational investment. That is why you include a risk statement in every business plan. But investors are also entrepreneurs. As such, they expect to make their money back, at the very least, and have a megahit, at the very best. Even though financing movies is a risk, investors do not set out to throw away money. As a partner, the investor may not be on the set helping direct (at least we hope not), but he has a vested interest in your triumph and prosperity.

GOOD SCRIPT (Or Scripts)...Never underestimate the influence of a good tale. Private investors and studio moguls alike look for scripts an audience will want to see. The reasoning may be highly subjective. Most equity investors finance pictures they want to see themselves. If someone's hobby is karate, that is what he will like. If he used to be a policeman, he will probably favor cops and robbers.

A REASONABLE BUDGET... Compare your budget to the potential of box office grosses. If you look at similar films ? genre, budget size, experience of actors, directors and producers ? you will see what it takes for the film to have commercial viability. In this sense, commercial only means that you have the potential to make more money at the theater than the cost of producing and distributing the film.

EXPERIENCE...The familiar catch-22 of filmmaking is: "What is your track record?" It is not impossible to get money for a first film, only a lot harder; that is why many producers and directors self-finance their first projects. Make your pitch reasonable by keeping the budget commensurate with your experience. A specialty film by a new filmmaker may make sense at $250,000 to $1,000,000; however, a $15 million budget is likely to be out of the question. Be willing to bring in an experienced producer, at least on your first film.

HONESTY...The majority of people with enough money to take a flyer on films are, or have been, in business themselves. They are used to looking at faulty proposals and for hidden agendas. The best way to approach any investment source is with total honesty. Admitting your drawbacks may not take you out of the game; deception could. Fiction belongs in the script, not the plan.