Advice on Private Investors, Tax Rebates, State Subsidies, and More
by Stacey Parks
Here are some basic approaches to financing your independent film. Keep in mind, this is not conclusive by any means but at least will give you a look at the landscape and what you’re working with when looking to finance your film.
1. Private Investors
This is one of the most common ways to finance your independent film. Of course, everyone wants to know: “But where do I find private investors for my film?” Unfortunately, there is no straight answer to this. I’ve heard of people finding private investors through friends, family, neighbors, local businesses, and even through the internet (classifieds, boards, portals). If you’re sitting there saying, “Yeah, but I don’t have any rich uncles,” then all is not lost if you can get creative and pull together a little bit from here, a little bit from there, and so on. I’ve even heard of filmmakers raising money from private parties through $500 or $1000 increments.
2. Development Deal
If you’re looking for financing from a studio or mini-major, here’s the deal: it’s called a development deal. You can’t just send your script to a studio or mini-major and ask them to finance it without them taking over complete control. That’s right – you’re out of the picture for now. What they will do is option your script, develop it in house, and if it makes it into production, you’ll get paid for the script eventually.
A pre-sale is when a distributor who has good reason to believe that he will be able make money off your film in one way or another, pays you a distribution fee up-front, for the rights to distribute your film in a specific territory or territories once it’s completed. Pre-sales used to be popular in the 80’s and 90’s when the demand for independent films far out weighed the supply. However, you can kiss those days goodbye now that everyone and their brother can make a film due to technological advances. It’s no longer a seller’s market, but a buyer’s market, and the only way to get pre-sales for your film is to be an established director with a track record of box office hits and an A-list cast. This is the type of insurance distributors want these days before financing your film in the form of pre-sales.
4. Self Finance
I think self-financing may be the most realistic way to finance your indie for most people – it’s surely the quickest way. You don’t have to wait around for anyone to get back to you, or see deals fall apart, you just empty out your savings or max out your credit cards…or both. Seriously, I don’t recommend doing any of that, or self-financing if it’s going to put you or your family in financial jeopardy, but fortunately making films is cheaper than ever these days, so if you just want to go for it, just spend whatever you can afford and get your film in the can now!
5. Tax Rebates
Several states have tax rebates for filmmakers who shoot their films in their state. I know they will only finance a certain percentage of your film’s budget, and there are many stipulations, but if you can swing it, then it might be worth it to get a percentage of your budget covered and then go knocking on other doors to get the rest. A lot of times, if you have some type of financing committed to your project, then that’s all it takes to get the ball rolling and get others to chip in as well.
6. State Subsidies
Fortunately, for filmmakers living in countries outside the United States, there are generous government funds to help finance your films. Us here in America wouldn’t know about that, but since many of you reading this live outside the United States, I thought it was worth a mention, especially if you’re living in the UK or Australia where I know the subsidies can be generous (well, generous to us Americans).
7. Institutional Investor Groups
I’m sure many of you have heard about these new investor groups popping up all over the place, i.e., hedge fund groups and the like. The deal with these is that most of them are looking to finance slates of films, not just one here or there. So if you’re a production company looking to finance an entire slate of films, this option may be a good one for you. And most of them can be found right on Google.
Stacey Parks is the author of the “Inside Guide to Independent Film Distribution” (Focal Press), a comprehensive educational program for filmmakers and producers dedicated to film distribution and the marketplace. Stacey has worked for many years as a foreign sales agent, sales executive, and has worked in independent film for over 10 years. Her website is www.FilmSpecific.com.
Featured in StudentFilmmakers Magazine, January 2008 Edition.
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