Why Professional Financial Documentation is Critical to Obtain Film Finance | FilmBudget.com Worldwide | Film Budget Inc.
FilmBudget.com – Provider to Hollywood of Film Budgeting Services
As a film financier, producer, line producer & DGA Unit Production Manager based upon my experience it is critical to have the very best in professional film financing documentation for your movie funding goals. Investors are scrupulous and intelligent as ever before and we are fighting against the fact of a challenging, alternative investment. The key question of “how to obtain film finance” must be addressed by every filmmaker.
Wealthy Investors Read Documents
Wealthy investors are very accustomed to reading extremely detailed and precise financial documentation. They are pitched continuously and understand a quality presentation from one lacking in the important details.
Business proposals are very solid, professional documents. Think real estate, start-ups, manufacturing, etc. Financiers generally have people to review and evaluate proposals. That is their trade, investing in smart endeavors which will make them money. That is what investors do, make money. They want and need to see that a proposal can demonstrate the viability of the project and a thorough understanding of the business fundamentals behind it.
Produced by Jack Binder | Film Budget Inc. & Greentrees Films
Film Proposals Take Many Forms
I see film proposals everyday. Many do not convey the proposition correctly or can be incomplete. Perhaps some elements are interesting, the screenplay, the talent proposed, a source of potential funding, etc., but for a large part they have something in common – they can tend to lack professionalism of the real financial world.
Why? The film business is complicated and success is not easily quantifiable. Some in the film business do not fully understand the business. For example, a filmmaker may think they are in the “great screenplay” business. If I just get a “great” screenplay, nothing else matters!
Nothing could be further from the truth. Yes, a great screenplay is a basic foundation of the creation of a viable film, movie or tv series, but their is much more to the equation.
Likewise, they will have a dream cast list and pictures showing who they think they will get to star in their film production. Nicely packaged graphics, photos and subtitles, elaborating on the virtues of the actor or that actor. Yes, cast is extremely important, but it is not the only factor to be determinative of a movie’s success.
Why Is It So Important to Have Professional Film Finance Documents for Investors?
Ah, now we are asking the important question. Some investors can be swept away in the dream of the motion picture industry, Hollywood, movie stars, romantic locations and the glamour of the show. Some. As I have often said, and remains true, the stupid money left the room on 2008, if not sooner.
Film investment took on a new format following the crash of Wall Street amidst the sub-prime mortgage crisis and the resulting credit crunch on the world financial system. First off, at the time one of the biggest sources of private equity for the independent film sector, and the Major Hollywood Studios off-balance sheet financing, was Hedge Funds. Well, these instruments of cash accumulation were hit very hard and you could hear the sound of hedge fund money being sucked off the streets of Sunset Boulevard and beyond throughout the entertainment industry.
What Do Investors Need Then to Invest In My Movie?
Even better question. Due to the above, the evaporation of capital and combined with the word-on-the-street reputation of film investment entailing a good amount of risk. Filmmakers often put together the most urgent paperwork required to get their film into production, the financials. They google, ask a friend, hire an editor to put together some nice graphics and video, etc.(or do it themselves) but they tend not to grasp the simple fact: Investors invest in a Finance Plan. Not your dream nor your lovely presentation of your dream.
What Do Film Financiers Need?
Standard materials for a sophisticated film financier, investor, producer, executive producer, studio executive, independent production company partner or development manager to evaluate a production for investment include:
- A professional film budget (or tv budget & tv series budget) created by an experienced film and television line producer or production manager, and
- A professional film finance plan, created by a veteran producer, attorney or consultant with extensive experience in the value chain and route to market for a film or tv product.
These are the two basic documents which will determine whether your dream movie idea gets made or not. The rest is nice, fun, interesting and great that you spent hours and hours of time and money upon, but they generally will not be the determinative factor in the decision for the savvy investor.
What is So Important About the Film Budget?
The film budget (or tv budget, tv series budget) is the roadmap to how an investors money will be spent. Created by and industry veteran, experienced professional with substantial track record, the film budgeting is the critical factor in determining the cost of the film production and where the money will go. (There is a wealth of description of the film budget on the main page and accompanying pages of FilmBudget.com
Why Does a Filmmaker Need a Film Finance Plan?
The Film Finance Plan is at the mercy of the film budget. For one, nothing can make sense to an investor, bank, lender, film tax credit or film tax incentives government official without the movie budget that explains the expenditure of the funding; how it is spent, when it is spent and for whom and for what it is spent upon.
A quality film finance plan details the sources of potential funding, how and when it enters the filmmakers working environment, and how it gets out. The most important question a financier wants to know is: how do I get my money back. The second most important question is: When. The finance plans answers these questions in great detail. From the investment finance sources, to the quality of the product under consideration (the bells and whistles and dream concepts) to the detailed route-to-market, marketing plan, distribution plan, projected revenue, evidence upon the projections, collateral, debt, bank and other lending institutions involved, film tax credits and production incentives. All of these factors go into the determination for the investor if this product is a worthy investment for their sacred money, with the understanding, the first rule of investing is – Don’t Lose Money.
FilmBudget.com is the International Leader in Worldwide Film Budgeting & Scheduling, Film Finance Plan and Film Tax Credits Services. Founded by veteran Major Hollywood Studio & Independent Film Producer Jack Binder whose credits include: ‘First Reformed’ (Ethan Hawke), Reign Over Me (Adam Sandler), The Upside of Anger (Kevin Costner), Man About Town (Ben Affleck), Londinium (Colin Firth), The Search for John Gissing (Alan Rickman) and many others.
Contact Jack here for a free consultation and custom quotation on film budgeting, film finance plan and consulting package services.
