Most of the time filmmakers seek to raise their investment round in one go. A lot of people think that’s just how it’s done, so they ask would they try anything else?
But just as filmmakers shouldn’t only look for equity when raising money, Filmmakers should consider the possibility of raising money in stages. Here are the 4 best stages I’ve seen, and some ideas on where you can get the money for each stage.
If you want to raise any significant amount of money, you’re going to need a good package. But even the act of getting that package together requires some money. So one solution to getting your film made is to raise a small development round prior to raising a much larger Production round.
If you want to do this with any degree of success, you’re going to have to incentivize development round investors in some way. There are many ways you can do it, but they fall well beyond my word count restrictions for these sorts of blogs. If you’d like, you can use the link at the end of the blog to set up a strategy session so we can talk about your production, and what may or may not be appropriate.
Related: 7 Essential Elements of an IndieFilm Package
Most often, your development round will be largely friends and family, skin in the game, equity, or crowdfunding. Grants also work, but they’re HIGHLY competitive at this stage.
It generally doesn’t make sense to raise solely for pre-production, so you should raise money for both pre-production and principle photography. This raise is generally far larger than the others, as it will be paying for about 70-80% of the total fundraising. It can sometimes be combined with your post-production raise, but in the event there’s a small shortfall you can do a later completion funding raise.
It’s very important to think about where you get the money for the film. You shouldn’t be looking solely at Equity for your Raise. For this round, you should be looking at Tax incentives, equity, Minor Grant funding if applicable, Soft Money, and PreSale Debt if you can get it.
Some say that post production is where the film goes to die. If you don’t plan on an ancillary raise, then too often those people are right. Generally you’ll need to make sure you have around 20-25% of your total budget for post. It’s better if you can raise this round concurrently with your round for Pre-Production and Principle Photography
The best places to find completion money are grants, equity, backed debt, and gap debt
It’s very surprising to me how difficult it is to raise for this round, as it’s very much the least risky round for an investor, since the film is already done.
Theres a strong chance your distributor will cover most of this, but in the event that they don’t, you’ll need to allocate money for it. Generally, I say that if you’re raising the funds for distribution yourself, you should plan on at least 10% of the total budget of the film being used for distribution.
Generally you’ll find money for this in the following places. Grants, equity, backed debt, and gap debt.
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My name is Ben, I'm an Entrepreneur, Producer's Rep, and Author. I'm the founder of Guerrilla Rep Media, Co-Founder/CMO of ProductionNext, and founder of PRoducer Foundry. Together, the organizations seek to help make filmmaking a more economically sustainable endeavor. I am dysic, I have capitalization issues, and the blogs are often unedited. opinions all my own.
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