Pitch decks are great tools to help you prepare for your next investor meeting. But even if you end up not presenting in a formal or semi-formal way, each page of our template contains insight to help craft the appropriate talking points before you chat with anyone interested in funding your film.
Before we dive into how to find film investors, let's look at a few suggestions before approaching any sort of investors.
First things first, you’ll need to know what kind of deal you want.
Are you looking for a loan, an equity deal, a tax incentive, or an angel investment?
Each of these types of deals have different expectations.
I chatted with Tiffany Boyle of Ramo Law PC, an entertainment law firm about some of these differences.
“For equity investors, they typically expect a 20% return. A bank loan is more difficult as they are more risk averse. They usually want to see bankable sales, for example, that the project is pre-sold to France for $300K with a respected distributor.”
Like anything else, if you won’t get something for nothing. Decide what you want from them, but ensure you’re giving them what they need, too.
“Unless you’re bringing in financing from angel investors, you’ll need a good script and typically a package with at least a director or credible actor for the budget.”
You’ll also need to put together a preliminary budget in mind that’s a somewhat close approximation of how much money you need to produce your film.
“If you’re going to approach investors, you have to get near what the actual budget will be.”
If you’re using a pitch deck, this will absolutely be part of it.
In a lower-budget indie film (under $1,000,000), an indie film investor may not want to exercise creative control. Still, that doesn’t mean it isn’t a possibility.
On many larger projects, film investors don’t want to end up with something like Battlefield Earth in their portfolio. Major changes to the screenplay may require the investor's approval and be explicitly stipulated in a production services agreement. A film funding company may even want to approve specific cast and crew members, whether it's the director or third lead.
Some film investors may also want to be credited as a producer and a larger back-end deal for equity. “I have known investors wanting 75% in the gross back end,” said Tiffany.
A production agreement between an investor and producer may also specify that the production company is liable for over-budget expenses or overruns that are not a result of withheld approvals or last-minute changes requested by the financier.
To incentivize staying within the budget, some agreements may stipulate the production company can keep part of (or even all) funds remaining after the final cut is locked. The financier may want to retain the right to take over the production if the project goes over budget or falls off schedule.
Get ready to take on accounting and payroll duties or find experts who can do that for you. This includes paying off taxes associated with your LLC and preparing a K1 form for your investor so they can pay their taxes on time.
When payroll is poorly managed or SAG members do not receive residuals, you can end up with surprise debts.
Get excited about your project so they can feel that excitement but don’t sugar coat it. Many indie film investors don’t make their money back. Including a warning in any investment agreement isn’t just an SEC requirement. You’ll need to make this crystal clear.
Even the major studios know there’s a risk as Matt Damon discusses on HotOnes.
A film pitch deck should include:
Tiffany suggests easy but critical prep.
“Be prepared to answer questions like why this project now and who in the market is going to buy this? Netflix? An independent production company? That way, they know how they might recoup their investment.”
Don’t forget to download our film pitch deck template to help you get started.
Work with a seasoned producer to ensure your budget makes sense. You may find an investment can actually stretch further on certain items you’ve estimated in your budget.
Inevitably “when will I get my money back?” will come up.
The answer to that question begins with the waterfall schedule put in place.
For the uninitiated, a waterfall schedule defines the order in which different parties will receive money once a movie generates revenue. This schedule is outlined in a financing agreement.
In an independent film, the first money may go out to pay union residuals, sales agent fees, collections account manager fees, (a 3rd party who gets the money that comes in from your project and distributes it to everyone else).
From there, an investor may get first dibs on the remaining pool of funds up to 120% of their investment. Then the remaining amount may be split 50/50 between the investor and creatives (writer, director, and talent). Or, in some cases after residual, agent fees, and CAM fees are paid, a financing agreement may specify a 65/35 split between film investors and the creative talent for all the remaining funds.
On larger-budget projects ($1 million+), a bank may demand in the waterfall schedule that they get paid before any other profit participants or salary deferments.
Then there are also potential bonuses you need to be aware of and will need to communicate with an investor on why you’re including them. For example, a high-profile actor may want a bonus or a small percentage of the revenue.
This year we saw Scarlett Johansson fighting Disney over Black Widow’s streaming profits. The revenue from streaming channels that talent is eligible to earn will be a new requirement moving forward.
Remember, beyond the specific terms of your investment agreement, who you’ll receive money from will vary based on your specific project. For example, an independent film with a budget of $1-$10 million may need to work with a foreign sales agent to get a bank loan.
Be honest with any prospective film investors if you can’t meet their expectations whether it’s a return or a Netflix top 10 film. They may not like the news, but you’ll still be able to share why targeting an up-and-coming or more niche streaming channel makes sense.
As you get more credits under your belt, entertainment lawyers and other seasoned producers can be a great resource for navigating how to get funding for a movie project.
It can take a team to get your movie financed. Your lawyer, sales agent, and talent manager are not only a great resource for running by budgets and specific agreement terms, they can also be a fresh set of eyes before you send out your deck to film investors. Be sure to download our pitch deck template to better prep before your next meeting.
