There is usually a reason why investors are interested in getting involved in the entertainment industry. Most of them have been very successful in other industries, and will likely know how to make money in those businesses without too many worries.
But while investors always like to make a profit and get a good ROI (“return on investment”), there are likely other motivations for them to consider backing a film or TV project.
The entertainment industry can offer a sense of glamor like few others. And many investors see this as a great opportunity to support a cause, to back a filmmaker, or even just to enjoy a new experience and have some interesting stories to tell.
Understanding the special qualities of this industry is something that all filmmakers should use to their advantage when appealing to investors. Once you can figure out what an investor is truly looking to get out of this experience, then you can start working with them to deliver it.
For people all over the world and in all walks of life, however successful or wealthy they might be, the glitz and glamor conjured up by places like Hollywood, Sundance, and Cannes are hard to underestimate.
The perks that a filmmaker can offer an investor are virtually unmatched by any other industry. After all, in which other business sector could you offer an investor the chance to sip champagne with their favorite movie stars at a party in the Hollywood Hills or on a luxury yacht along the French Riviera?
For some investors, particularly those who have made fortunes in other industries and want to use their wealth to have a bit of fun or support the arts, the opportunity to take a photo of themselves or their family members with an A-list star is more appealing than a simple monetary return.
Sometimes just seeing their name up in lights on the big screen when the credits roll is enough to make someone invest. It makes for a great story at dinner parties with their friends.
Believe me, the thrill of sitting in a darkened theater, surrounded by friends and strangers alike, and seeing your name appear in giant letters on the screen in front of you is truly exhilarating. However much money an investor might have made in their previous businesses, there are few experiences that are quite so intoxicating, and it makes you want to do it again and again.
Perks
Alongside a potential ROI, filmmakers can use some of the perks that are unique to this industry to entice potential investors. These are experiences that likely wouldn't be available to them unless they invested in a film or TV show, and these can be extremely alluring.
Filmmakers should be aware of the potential perks that they can offer here. Don’t underestimate how attractive these can be to someone who has had no previous exposure to the entertainment industry, even if they might seem trivial at first glance.
For example, an investor might be invited to:
Visit the set
Meet the cast
Be an onscreen extra
See rushes/dailies/footage
Attend film festivals
Attend premieres and screenings
And much more…
All of the above is at the discretion of the producers and whatever they negotiate with the investor. This should only be where the circumstances are deemed appropriate. Neither the producer nor the investor should take advantage of the other.
For example, I remember working on a film where an investor felt permitted to turn up on set pretty much every day of the shoot. At first it wasn’t an issue, but by the end he was getting in everybody’s way, especially when the production needed a small and mobile crew. The producer had to ask the investor to stay at home, which was very awkward and embarrassing for everyone.
Conversely, I recall another occasion when a producer completely ignored an investor’s desire to visit the set and witness first-hand the production that she had helped pay for and make possible. The producers were treating the investor as more of an annoyance than a vital part of the project.
Neither of the above scenarios is appropriate. Whichever side of the coin you are on, just remember that any perks should be reasonable and within the bounds of what the production can realistically offer. Neither party should take advantage of the other.
It's Still A Business
The glamor of the film industry is a potent weapon to have in your arsenal when approaching investors. You can offer them something that many other entrepreneurs can't when they are pitching their business ideas. Use this wisely.
However, for all the glamor, just keep in mind that this still needs to be a good business proposition for the investor. These investors aren't dumb, and they didn't get rich by making careless investments on a whim.
Perks are not usually a reason in themselves to invest. They are add-ons to make an investment even more attractive.
So, when pitching to an investor, make sure that you have your business plan in great shape so that they take you seriously and know that you are ready to talk business. Just don't forget to highlight some of these great perks that you can offer that they wouldn't be able to get anywhere else!
Ricky Margolis has over 15 years' experience in the entertainment industry, and has been involved in the finance, development, production, and/or distribution of over 30 titles.
The above is an excerpt from the book HOW THE HELL... Do I Get My Film Financed? Book Three: EQUITY FINANCING. Still want to know more about film & TV financing and production? You can find the other books in the series by clicking here.
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