DISTRIBUTION | Getting To “Yes!”:
Tips on Raising Independent Capitol
By Shane Stanley
There are different ways to raise capitol for your movie and sometimes the easiest place to get it is where you’d least expect it – from people with deep pockets interested in dabbling in the motion picture industry. In my new book, “What You Don’t Learn in Film School: A Complete Guide to (Independent) Filmmaking I dedicate a whole chapter to not only raising private equity, but how to conduct yourself when it comes time to pitch. In film school they make sure to cover the basics like creative writing, camera, editing and budgeting – at least they’re supposed to – but I am yet to find one institution that has an effective course in presenting a project to potential investors. A lot of your success on raising money will be based on preexisting relationships, connections you make through life, and good luck, but once you get into the room, there are some basic dos and don’ts that are rarely covered in the lecture halls. Here are just a few tips from my book that I think you’ll find helpful that come from my thirty-plus years of trial and error.
If someone is really in the position to write a check to finance a film, they’re probably pretty savvy. Trust me, they have been pitched everything from financing movies, to opening night clubs, starting clothing lines and molding widgets by someone a lot slicker and more qualified than you. Investors know they hold the key to unlocking the door to the dreams that can change your life, so go deep in thought when creating a presentation because you’re pitching them on a fantasy (smoke and mirrors), not real estate or something they can look, touch or feel at the moment.
I always advise new filmmakers to play in an arena they’re not only passionate about but also comfortable in. As you find your legs I think it’s wise to have all the bases covered of your chosen genre, which will aid when executing creative discussions with your filmmaking team and onscreen talent, but more so when pitching your project to potential investors. They’ll appreciate your expertise on the subject and sense the passion you possess as the gibberish naturally rolls off your tongue. Remember, when you pitch an investor to finance a film, you’re selling something different. You’re selling the magic and the sizzle of Hollywood and most importantly, you’re selling yourself along with the upside (or fallacy) of what their investment might return.
What to put in your film finance package is key. I don’t think you need too much weight in the room. A simple proposal can include a summary about your film, your bio, and a distribution plan including similar films and how they did in the marketplace. You might want to bring a hard copy of your script so they can see it in person, but offer to email it to them later if they’d prefer. It’s also a great excuse for a follow-up unless they’ve already read your script before the meeting. I don’t recommend putting pictures of famous actors you’ll never get in your proposal. You laugh. I can’t tell you how many times I’ve seen Matthew McConaughey or Jennifer Lawrence’s mug in presentations for films that cost under $2M. It’s ridiculous and just sets you up for failure and ultimately their disappointment. An investor might ask, “Who do you see starring in the picture?” That answer can be met with, “I’d like to spread the cast budget over three or four well-known actors to better the odds of our film’s success in the world-wide marketplace. Almost like an ensemble.” Trust me, they’ll appreciate that. And notice I used the words, “our film” in there. It’s the little things in your pitch that will help give you a snowball’s chance in Hell to getting that elusive ‘yes’.
People with real money are presented opportunity all the time and you have to think on your feet and always be prepared for an audible. Know your presentation backward and forward and never be afraid to say, “I don’t know” when asked something you don’t know the answer to. One of the best business relationships I ever had was launched on, “I don’t know,” my answer to a question they asked in our first meeting. Those three words told them the truth; I didn’t know and I had the confidence to admit it. I capped it with “I will find out for you,” which gave the investor a sense of security I wasn’t going to create some line just to appease him right then and there. It also gave me another great excuse to reach out the next day and get him the answer he was looking for, ultimately allowing me to get him on the phone quickly and close the deal.
Think outside the box and keep things in the ‘real world’ when giving investors comparables. I’ve used films with little fanfare in my presentations like Lovely and Amazing or Like Crazy; films that cost little to produce and turned respectable profits that are more realistic to obtain. Dig deeper than the obvious when listing comps and return on investment potential. Trust me, they’ll sniff through the hype immediately. Imagine if you were pitched a real estate investment. You’d feel hustled if you heard about the investor who put in $250k and flipped it for $3 million a year later. But a story about the person who invested $250k and turned it into $750k seems more realistic. Base hits and doubles make sense to investors and they’ll be more apt to develop a sense of trust with you early on as opposed to if you used pictures like Paranormal Activity or Juno as your comps. Those films had more money than you think with major studios behind their release. It’s important to always under promise, so you have a chance to one day over deliver. If your investor turns a profit and makes their money back plus 25-30%, that’s an attractive return. But if they are anticipating making back five times their money because you said they could, they will only be disappointed when things fall short. Always keep things in perspective so that even modest returns can be seen as a victory.
So what’s the appropriate amount of time to give an investor to respond once you’ve presented your project? I believe the best way to help avoid this uncomfortable (and painstaking) process can be addressed upon closing your meeting. When wrapping up kindly ask, “When do you think you might get back to me with a decision?” This does two things. First, it subconsciously puts some justifiable accountability on them and second; it gives you a timetable as to when you can expect to hear something and if not, you have reason to reach out. Remember, you never want a potential investor to feel rushed or pressured. And you certainly never want to come off sour if they pass. Several investors who have turned me down have circled back and funded my projects. Why? I think largely because of the respect I showed them when they said no. Rejection is hard and if you burn a bridge, rebuilding it is much harder if even possible at all. Take rejection gracefully. If it feels right, ask them why they elected to pass if they don’t offer their reason. But most importantly, thank them for taking the time to listen to your presentation and consider backing your project. Make sure to let them know you hope to keep the door open for the future. I bet 9 out of 10 times they will welcome you to make another presentation down the road.
After all, people pass for so many different reasons and I promise you, I’d wear out the keys on my computer writing half of them. You never know what makes people pull the trigger on things, but life is a long time and people’s circumstances and minds are always changing. On the flipside, people will do business with you because they like you and feel a sense of comfort in how you conduct yourself. I once had an investor reject me after asking for a couple of weeks to consider a proposal. After I thanked him for his consideration and explained I respectfully understood his decision, he did a 180 right there on the phone and agreed to finance the project, as he only wanted to test my personality by giving me a false no. He explained how he often does that when he invests in people and makes a final decision based on their response to rejection. I found it to be a little quirky, but to each is own.
You have to learn to be well versed in what the opposition is thinking. Any Army General or sports coach will tell you that’s key to a successful battle plan. There have been countless articles written to help save potential investors from getting hosed by bad investments and scams surrounding the entertainment business, especially after people like Joseph Medawar have done so much damage. Business managers and C.P.A.s strongly discourage their clients from investing in film and stay employed by guiding them to keep their money where it’s safe and sound. Pitching to investors is its own kind of game. Not a deceptive game, but the slightest wrong move can turn them off entirely. You have to be smooth, calculated and debonair, all while taking your time and not looking at all desperate. If an investor is led to think they’re the only option you have, they will quickly gain the upper hand, but at the same time they need to feel like they’re the only person you know with money. To say you’re tap dancing on landmines and walking the razor’s edge when courting a potential investor is a severe understatement.
For more insight on how to prepare your pitch and get more invaluable tips to raising capitol and producing your independent film, please visit www.whatyoudontlearninfilmschool.com.
Shane Stanley, filmmaker and author of the popular new book, “What You Don’t Learn In Film School” is a lifelong entertainment industry insider, who has worked in every aspect of the business, covering a multitude of movies, television shows and other successful projects. At 46 years old, Stanley has been a steady earner in film and television since he was in diapers with a career that started in front of the camera at 9 months old and grew into a life of an Emmy Award-winning filmmaker spanning more than three decades. To order a copy of Shane’s book and for his seminar schedule, please visit: www.whatyoudontlearninfilmschool.com