Like most working independent film producers, I’ve pitched my projects to more potential financiers than I can remember.  I’m always relieved when they’re seasoned film investors because then I can focus on the creative aspects of the project, the production and distribution plan, and the recoupment structure.  When I pitch …]]>

Like most working independent film producers, I’ve pitched my projects to more potential financiers than I can remember.  I’m always relieved when they’re seasoned film investors because then I can focus on the creative aspects of the project, the production and distribution plan, and the recoupment structure.  When I pitch to someone who hasn’t invested in film before, most of my time is spent explaining how film investment works, the typical life cycle of a film, and the current industry landscape (often with historical context!).

I genuinely love educating people about “how film works.” It’s great to shatter the US Weekly version of the film world, and show people that it’s a serious manufacturing industry comprised of hardworking creative and technical professionals.  But honestly, how many more times am I going to have to explain this on an individual basis?  A girl’s gotta sleep (oh, and actually make movies too).  I’m guessing that for every 200 of these newbie film investors I pitch (and educate), 199 of them say “no.”  And pitching to them is so much more extensive and drawn out than pitching to an experienced film investor.  This doesn’t seem like a very efficient use of my time, right?  It isn’t.  I should be reading and developing scripts, making and executing production and distribution plans, figuring out how to innovate in a rapidly changing landscape.

A few weeks ago at the Creative Capital artist retreat, I was chatting with Philipp Engelhorn of Cinereach about the state of film financing and distribution.  He wondered why there were labs and training programs for screenwriters, directors, and now even producers, but no such programs for investors.  Indeed, why aren’t there any?  There are investor training courses in stocks, real estate, tech, and other industries. Why not in film?  Especially now that film budgets have plummeted, subsequently lowering an investor’s barrier to entry.  Not only would investor “labs” make producers’ lives easier, but they could potentially groom new classes of intelligent investors specifically for the film industry–more “smart money,” less “dumb money”!

An educated investor is primed to be a repeat investor.  I’ve met too many investors who never want to be involved in another film again because they were burned by their first one.  Their expectations were not properly managed, the risks not explained, the production was a nightmare, the distribution plan was stupid, the filmmakers neglected the film after its premiere, and so on.  If someone had explained to these investors how to identify� good directors and projects, assess deals, spot red flags, mitigate risk in a very risky type of investment, and effectively work with producers, perhaps they wouldn’t have made a doomed investment, and perhaps they would’ve invested again.

It’s understandable why producers are reluctant to lay out all the risks themselves. They want to paint a rosy picture of a film’s prospects because they want it to get financed.  But they’re doing themselves, the financiers, and the film industry at large a disservice by promising things that they’re not certain they can deliver.  This is where neutral third-party investor labs would come in handy.

These labs could help make investors proactive instead of reactive (how great would it be if more of them sought us out instead of the other way around?), and weed out the ones who want to be in it just for the money.  Did I mention that film is a very risky investment?  Well, it bears repeating.  Film investments are alternative assets like real estate, rare coins, artwork, or investment-grade wine that diversify an investor’s portfolio.  It’s rare for a film to hit it big, but when it does, it can hit it really big.  Ultimately, however, the best kind of film investor is someone who is not merely interested in financial return, but also in psychic return—that is, the unquantifiable joy of being part of an artistic endeavor, of learning about filmmaking and the film industry from the inside, of supporting a social issue or cause addressed by a film, of going to celebrity premieres and parties, of establishing relationships with promising filmmakers, and of helping to make something that will hopefully be seen by many and talked about for years to come.

So, who wants to start the first lab for film investors?

Sometimes I feel like a traveling salesman, going from festival to festival selling my finished films, and from market to market pitching my new projects.  I recently participated in my ninth project market on the “filmmaker” side, and I’ve done four of them on …]]>

Film Independent's Fast Track project market

Sometimes I feel like a traveling salesman, going from festival to festival selling my finished films, and from market to market pitching my new projects.  I recently participated in my ninth project market on the “filmmaker” side, and I’ve done four of them on the “industry” side, so I figured I’d write about my experiences with project markets to try to demystify them a bit.

What is a project market, you ask?  It’s basically a matchmaking program between filmmakers (writers, directors, producers) and industry professionals, with the goal of getting the filmmakers’ projects closer to production.  They usually run over 2-3 days, and are often held in conjunction with a film festival.

Examples of U.S. project markets include: Tribeca All-Access (held during the Tribeca Film Festival), Film Independent’s Fast Track (held during the Los Angeles Film Festival), and IFP’s Project Forum (which, by the way, is currently accepting submissions).

Examples of non-U.S. project markets include: Cinemart (held during the Rotterdam Film Festival), Berlinale Co-Production Market (held during the Berlin Film Festival), Hong Kong-Asia Film Financing Forum (held during the Hong Kong International Film Festival), and OMDC Toronto International Financing Forum (held during the Toronto Film Festival).

If you are a filmmaker with few industry connections, project markets are a great way to start building your network of useful contacts.  A project market essentially “validates” you and your project, and prompts the industry to start tracking you.  These markets serve as curators of new talent, which is critical because industry professionals are so inundated with submissions that they need curators to help focus their attention.

However, filmmakers who get accepted to project markets should be careful to manage their expectations. If you think your film will get greenlit within the months following a project market, think again!  Chances are, as ever, slim—I think this is because project markets tend to favor first- and second-time filmmakers and less commercial projects, and because it takes time to build a relationship and mutual trust with an industry person.

But don’t dismay: there are, of course, a handful of films that I know found a chunk of their funding at a project market. And at the very least, you’ll get a chance to meet a lot of industry folks in a short period of time, and to start developing relationships that may later bear fruit.  The value of a project market has more to do with building relationships and a network for yourself than getting a green light for your project. Hopefully, you will have other projects in your back pocket so that if you meet someone who doesn’t like your drama, maybe they’ll like your comedy instead.

So…who the hell are these “industry professionals” anyway? Below is a breakdown of the industry types a filmmaker might meet at a project market:

Production Companies & Producers

• 1. Production Companies Backed by Investors: These companies have private equity, the holy grail for independent films. Some also have first-look or overhead deals with studios.
• 2. Production Companies Connected to Actors: Some have studio deals and connections to financiers. Sometimes, the particular actor must be attached, so if you don’t want to abide by that condition, look elsewhere.
• 3. Production Companies Connected to Directors: Some have studio deals and connections to financiers. Sometimes, the particular director must be attached, so if you don’t want to abide by that condition, look elsewhere.
• 4. Production Companies and Producers With No Backing: The vast majority of “producers” fall under this category. While these folks have no money, they do often have connections to financiers, talent agents, distributors, etc., and can help develop your script, do a budget & schedule, attach cast & crew, and shop your film. Every film needs a producer, so if you don’t have one, find one.
• 5. Development Companies Backed by Investors: These companies focus on script development only. They usually acquire material (books, articles, etc.) and seek writers to do adaptations.

Agencies and Management Companies

• 6. Financing Agents: The major Hollywood agencies (UTA, WME, CAA, ICM, Gersh) and Cinetic have financing divisions that specialize in packaging and finding financing. These agencies work on commission when shopping a project to their network of financiers, and reserve the right to sell the finished film domestically. It’s rare for an agency to take on a low-budget project unless the director or actors attached are repped by that particular agency.
• 7. Domestic Sales Agent: Also called producer’s reps, these companies or individuals work on commission when trying to sell your finished film to a distributor at a festival, market, or directly. Most of them who aren’t one of the aforementioned financing agents don’t have the deep network of financiers necessary to greenlight your film (though some do). As such, these agents are most likely just tracking your project in anticipation of representing it when it’s done.
• 8. Foreign Sales Agent: These guys are responsible for selling the foreign rights for your project. Some of them can offer financing in the form of minimum guarantees (MGs) at the script or financing/casting stage, but this usually requires a big star or big director attachment, or other elements that have specific commercial appeal for certain territories. Even if you can’t get that rare MG, these agents can provide foreign sales estimates that you can show to your potential financiers.
• 9. Talent and Lit Management Companies: These companies can assist with cast attachments, and possibly represent you as a writer or director, thereby opening up their network of connections to you.

Studios and Distributors

• 10. Studios: A major Hollywood studio has the power to fully acquire and finance your feature, but chances are, they won’t do that if you’re a filmmaker early in your career. More likely (though still pretty unlikely) is a negative pickup deal in which a studio promises to pay you an acquisition fee upon your delivery of the film to them. You would still have to cashflow this deal through a bank or other financier. Note that you should expect to give up a degree of creative control in a studio deal, especially in a full acquisition. A studio executive might attend a project market to track you as a director or writer, or your project as a potential future acquisition after you’ve finished the film.
• 11. Mid-Sized and Smaller Distributors: Companies like IFC and Magnolia don’t typically finance production, but in very rare cases, they may put up a portion of the budget in exchange for certain distribution rights. But these companies are still useful to get to know since they’re among the most likely to buy your finished films.
• 12. Other Distributors: There are a whole slew of smaller specialty distributors and newfangled platforms (cable VOD, online streaming sites, etc.) that are helpful to know.
• 13. Distribution Service Companies & Consultants: Distribution service companies will release your film for a fee, and consultants and PMDs (producers of marketing & distribution) will advise you or manage your distribution, also for a fee. These guys won’t help get your film greenlit, and are probably just tracking potential future clients.

Debt Financiers

• 14. Banks and Debt Financiers: These guys can cashflow your negative pickup deal, foreign MG deal, tax credit, or similar collateral.  It’s rare for very low-budget films to use debt financing because a portion of the financing fees (bank, attorney, completion bond, etc.) are flat, so they’ll suck up a bigger percentage of a smaller budget.

Non-Profit & Government

• 15. Grantmaking Organizations: Generally, grants represent a small fraction of a film’s budget, but they’re still great if you can get ‘em!  Most focus on special interests (women, social issue, etc.).
• 16. Government Film Commissions: Whenever possible, “soft money” should be a part of every film’s financing plan as it can mitigate financiers’ risk and give you some “free” money for your budget.  In the U.S., various states have tax credits (NY, NC, LA, CT, AK, to name a few), and in Canada and elsewhere in the world, there may be loans and grants in addition to tax credits. Sadly, soft money is disappearing due to the state of the world economy.
• 17. Project Markets & Labs: Project market organizers sometimes troll other project markets for submissions.  It’s good to do multiple project markets to widen your industry network, but note that like festivals, project markets don’t like to take projects that have already “premiered” elsewhere, though there are of course exceptions. These guys primarily want to meet and track up-and-coming filmmakers, and see what other projects they might have that may be more suited to their own project markets. Also sort of related to project markets are screenwriting, directing and producing labs, which can be helpful in developing your craft and connecting you to more potential collaborators.
• 18. Film Festival Programmers: They don’t have the power to greenlight your film, but it’s good to develop relationships with programmers since so many indie films are launched and acquired at festivals. These guys want to meet new filmmakers and track future films.

Services

• 19. Post-Production Companies: Some post-production companies grant post services, or do in-kind equity deals.  Note, however, that post equity deals will value services at full rack rates.
• 20. Production Service Companies: It’s helpful to get to know the production service companies that have a lot of experience shooting in the region where your film will shoot, particularly if you’re not familiar with shooting there.
• 21. Completion Bond Companies: These companies oversee the production of a film and provide assurance to financiers that a film will be completed on time and on budget (and they’ll cover any overages). But it often doesn’t make sense to bond a small-budget film because these companies require a minimum service fee and 10% contingency.
• 22. Attorneys: Attorneys attend these things to track new potential clients. This is a good time to start shopping around for an attorney so you’ll have one when you’re ready to make deals. Note that some of them also represent investors.

* * * * * * * *

I think that about covers it!  Notice anything missing?  I do: high-net-worth individuals, who are the primary financiers of very low-budget films in the U.S.  You’ll have to find those folks elsewhere.

Some other suggestions

- Write a project summary that includes: logline, synopsis, director’s statement, bios of all cast/crew attached

- Bring a look book, or at least some visual references

- Don’t hand people a full paper script

- If your project has both a director and producer, you should both attend because I find that pitching as a team is more effective

- Be conversational and keep any formal presentations short and sweet

- Follow up over email, and include links & attachments presented at the meeting, even if you’ve already given them physical material

One last thing: before you start pitching to the industry person sitting across the table (whether at a project market or not), figure out exactly which of the above categories they fall into, and adjust your pitch accordingly.  Happy networking!