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Truly Free Film

Towards A Sustainable Investor Class: Pre-set Backstop Risk Mitigation

Your parents taught you to cover your ass didn’t they?  You like to be prepared, right?  You can’t expect to have dinner if you haven’t put food in the refrigerator, right?  How come then we make films and don’t have any distribution options lined up in advance?  Are we expecting others to always take us for dinner?

When someone is encouraged to make a movie and bring it to market without having any backstop distribution or marketing plans in place, that advisor clearly has another agenda at hand than the investors’ (or filmmakers’) best interest.

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Truly Free Film

Towards A Sustainable Investor Class For Film Culture And Business

In my 38 Ways The Film Industry Is Failing Today post, I cited at #2 “The film industry has never tried to build a sustainable investor class”.  That was over two years ago.  What progress has been made?

The need for greater transparency, access, education, and community in film investment circles is only now being generally recognized in the film industry.  For over a century, the powerful kept close hold on the financial side of things, limiting access between creators and supporters.  This required always paying a visit to

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The Next Good Idea Truly Free Film

Invest in Artists, Not Art; in Individuals, Not Projects

MCN tipped me to this article in Barrons on Creative Capital’s practice of investing in the artist, and not the project.

BRENT GREEN WAS 25 AND ABOUT to relinquish his dream of becoming a filmmaker when he discovered Creative Capital.

Green had been looking high and low for a $14,000 grant to finish an animated film. Creative Capital, a nonprofit based in New York, sized him up and offered something entirely different: $43,000 to help support his career over the next three years. It would go toward everything from equipment to transportation to the cost of a publicist. In return, Green would give Creative Capital a small cut of any profits.

In the five years since then, Green’s work has been shown at the Sundance Festival and a number of museums and film festivals in North America and Europe. He has even found himself turning down galleries eager to represent his work.

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Truly Free Film

A Producer’s Contribution (Part 2 of 3)

Recently on this TrulyFreeFilms blog, Michael Walker of Pangofilms asked why more producers don’t invest in their own movies. This is part two on my attempt to answer Michael.

Walker’s question of why producers don’t invest in their movies brings us back to the perennial problem that most people think that producing is just about raising the money. The first film that I raised the financing for was Hal Hartley’s FLIRT, even though I had already produced about ten films by then. Producing has always been about making the best movie possible and making sure that the audience for it, sees it. The money part of the equation is just the steps needed to get to the making part.

It seems like until the late ‘80’s producing was solely the province of the wealthy and privileged. Up until then it also seemed like those that could pursue producing in this country, had to do it the Hollywood way – which meant that if you succeeded presumably you quickly became more wealthy and privileged. Producing will never be a secure profession in America, but it is open to those who are willing to work at it and have something to offer – not just the wealthy and privileged.

I don’t have money to offer – and never expect to – but my partners and I do make considerable investments in all our films. When we consider taking on a new project, we anticipate it will be a three-year commitment at the very least. Although we have had projects like AMERICAN SPLENDOR that only go through a few drafts (and go on to get nominated for the Academy Award), we also figure that each project will have a minimum of fifteen drafts. Some have forty or more. Each draft represent reading time, discussion, notes, and generally a fair amount of emotion. The scripts themselves require research through books, websites, and other movies — more time, more energy, and more thought.  Even AMERICAN SPLENDOR was something that I had spent years developing before I brought to the writers, having already shot footage on Harvey & Joyce, secured the Letterman tapes, committed to a hybrid structure, and decided on the central theme of the project — when Bob & Shari walked into the office they were like a dream come true, the perfect peg to fill the hole: a couple who had written bio pics and made docs on off-center pop culture.

A producer gets no glory for the films they create and make. A producer’s name is rarely recalled for the work that others have enjoyed. A producer is the one that each side looks to for solutions, and thus one that has to sacrifice to bring satisfaction. When the film works, it has no bearing for the producer on future rewards, as it will the actors, directors, and writers. When things go well for a producer, it means more people seek them out, more people expect them to pick up the tab. The producers I know are creative collaborators who put their heart and soul into their projects, but never achieve the ownership that might lift their savings into real levels of security.

The demands on a producer don’t change due to their limited finances however. Each project is also a relationship, or rather several. The filmmakers, investors, and collaborators all have real needs and need thoughtful attention. The forays that we make to investors, cast, crew, distributors, critics, and fans all depend on different relationships that we have put considerable time and effort into. If we are going to survive, theses other relationships will need to extend far past the singular film. How well we service these relationships will directly reflect what fruit we can bring to subsequent projects. Each new film is a risk, where all this historic good will, this capital we have raised, is tested and re-valued.

Part One
Part Three
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Truly Free Film

A Producer’s Contribution (Part 1 of 3)

Recently on my TrulyFreeFilms blog, Michael Walker of Pangofilms asked why more producers don’t invest in their own movies.

This question first assumes that there are producers who could even afford to consider this possibility. Right now, when it comes to financial matters, I don’t know of any producers that aren’t first and foremost concerned about their immediate survival (even the concern of long term survival now looks like a luxury). The business once supported prolific quality producers with overhead deals, but those days are now dead and gone. A financial investment in a movie is not something most producers can afford.

I have made financial investments in my films, but mostly in terms of bridge loans and never with any reward for it. Usually the director didn’t even know I was doing it. And once I got burned and came very close to watching it spiral and thus losing a great deal more as a result. I have also “invested” in filmmakers I believed in, whether to help them complete their movie, or just to survive, but never in a structure that had expectation for financial reward — more as a friend or family member would. But generally, the reason why, as a Producer, I haven’t invested financially in my projects, is because I, like most producers, can’t afford to. Sad to break it to you, but Indie Film producing is not a lucrative profession. We don’t do it for the money honey.

To be frank, I think investing in films is counter to what a producer should be doing. Investors generally are looking for a financial return, albeit one that contributes something to the culture too. A director is trying to make their movie. A producer has to balance these multiple interests. One of the most difficult things about producing is making sure all collaborators share a common agenda. As much as folks claim to be on the same page, their behavior frequently betrays this goal. The director and the financier both need to know the producer is looking out for their diverse interests.

Producers have a fiscal responsibility to their movie, but it is not their only responsibility. I am surprised that a director would want a producer who by way of their investment was declaring the fiscal responsibility their primary one. I would be surprised that investors would want to go forward without someone to balance their needs with that of the director’s. How would such an investor ever get a great film? Unfortunately, a film’s financial success is dependent on far many things beyond the quality of the script, so even if the producer who developed it had infinitely deep pockets, the intersection of art and commerce would create an imbalance of power. Movies thankfully will never just be about these interests; it is the blend that really makes each film find new heights.

Part Two
Part Three
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Truly Free Film

Locavesting: Is it applicable to film?

Mind you most of film finance is probably classifiable as Loco-vesting, but I was struck by one of the ideas cited in the NY Times’ excellent YEAR IN IDEAS roundup.  Locavesting is simply the practice of investing in local businesses.  

A region’s benefit in incentivizing locavesting is akin to the logic around state tax credits: money spent in film is again transfered to the region’s other businesses generally.  Civic leaders recognizing this might come up with additional incentives to encourage it.  Certainly a savvy producer would be sure to foreground this with any locally-based investor-wannabe.  The promise of regional cinema could be grounded by such a locally based film slate investment fund.

This is that excerpt from the article:
Locavestors
By AMY CORTESE
Perhaps you’ve heard of locavores: people who eat only foods that have been produced within a 100-mile radius. Now some people — call them locavestors — are investing in much the same way. The idea is that, by investing in local businesses, rather than, say, a faceless conglomerate, investors can earn profits while supporting their communities. To help match mostly local investors with capital-hungry local businesses, regional stock exchanges are starting to spring up around the globe.

Consider InvestBX, which was formed to serve businesses looking to raise relatively small sums in England’s West Midlands region. In February, InvestBX’s first listed company, Teamworks Karting, which runs an indoor go-kart center in Birmingham, raised more than $735,000 to open a new track in nearby Reading. In November, Key Technologies, a high-tech firm with 232 employees and annual sales of some $26 million, floated shares worth nearly $3 million. To list on InvestBX, a company must be based in the United Kingdom and have a significant part of its operations in the West Midlands. Companies can raise about $3 million from “local and U.K.-wide investors.”

Local exchanges address a financing gap for smaller companies, which may not be able to attract venture capital and for whom the major exchanges may be out of reach. “Small businesses need funding options more than ever in today’s recessionary climate,” says Trexler Proffitt, a professor at Franklin & Marshall College in Lancaster, Pa., who recently completed a feasibility study for a seven-county Lancaster exchange. (His conclusion: affirmative.)

In a way, we’re coming full circle. Until the 1950s, when they began to consolidate, there were thriving regional exchanges all across the country. “Globalization has been advantageous, but we’re starting to see the sacrifices we’ve made,” Proffitt says. “People are interested in figuring out how to connect to their local communities again.”