Announcement: A New Method for Indie Financing
Safety, security, risk assessment, numbers, waterfalls, bonding, exposure, bankability, variables.
Top independent filmmakers know their investors and lenders care about these things, and so before they submit their projects, they take their finance plans seriously. Without the finance plan, no funding will occur.
Producers may relate to this… Recently, a producer/writer/director submitted a project to me and asked for my assistance with funding. I emailed back:
- What is the current status of the project (i.e. talent, financing, pre sales, etc.)
- Do you have a finance plan?
- What is the budget level?
- What is the background on the script itself?
- Are you a first time producer?
- Is the script being adapted by a first time writer?
His concept was strong, and he had an intriguing film website, a stellar spec trailer, attractive concept art, an experienced production team, but he didn’t have a finance plan and so he was still far away from a film closing. I told him he wasn’t ready yet, and that until the finance plan was complete, he couldn’t acquire equity, gap loans, pre-sales, or tax-credit advances from a lender or investor.
I offered to give him specific reasons and fixes to the problems and then take a second look and re-consider the project after those issues were resolved. Many producers find this extremely helpful.
It can be frustrating to be stuck in an endless loop of needing financing in place in order to attach creative elements and needing creative elements attached to secure financing. Many indie producers who have commented on FilmClosings.com have told me so. We all know this story.
In today’s market, I am aware we need to explore alternatives to get us out of the no-financing abyss.
I may be a financier who works within the traditional film finance model, but I’m not traditional. In other words, I like disruption and I’m open to change.
The alternative finance models out there have some novel concepts behind them. Right now, I’m interested in exploring tribe/crowd financing to merge with our current model. This hasn’t been done before in the way that I’m proposing to my knowledge.
The traditional model certainly has its setbacks, but the rules are pretty straight forward and it can close relatively quickly. (It should be noted that even within the traditional model, no two financings are the same — they’re like snowflakes: they’re cold, tasteless, and always in a state of free-fall.) So, what’s wrong with adding one new snowflake to the mix?
Here’s my thought: Rather than trying to use tribe/crowd financing for the entire film, I am interested in finding out if any of the crowds, micros, tribes, socials, and hybrids in the alternative financing space (such as Biracy, IndieGoGo, Investedin, Kickstarter, Trampoline, Rockethub and Massify) can provide funding for 20-25% of the project’s budget. If so, I could wrap a finance structure around that.
I would be interested in hearing from people or companies who have experience with the tribe/crowd financing in the current model. Was it successful? Was it a nightmare?
For this new, merging option I’m proposing to even be considered: (1) Securities laws must be considered — ignorance is not a defense; (2) The funds need to be verifiable.
If nothing else, people like myself need to try to incorporate new sources for film finance. Help me help you. With your involvement, this merging of crowd/tribe financing into the traditional model may indeed be possible.