I have time and time again seen the case of people who have become very successful in their regular business lose all their investment in attempting films. The film business is a lot of fun but it will eat up private investors and spit them out without burping.
The modern film business is about end users and the successful are incredibly well financed and have years of development experience behind them.
It is possible to make films and make money but it is not easy and the woods are full of people who give bad advice and will take your money.
Here are a few quick tips:
- Use leverage: 30%-40% in equity should get most films made if other end users will buy into the premise.
- Keep budgets low- foreign should cover at least 50% and 70% is better.
- Don’t rush a particular script- there are thousands of scripts out there- don’t fall in love with one which can’t get agreement from end users.
- Prepare to drive distribution with your own investment. It’s where all the money is.
- Prepare to play for multiple pictures. A $5 million investment can buy participation in several films- not just one.
- Never put up more than 50% in equity- if the producer can’t find the rest, you’ll never come out.
- Do not look at results garnered by the majors in you’re financial modeling. INDIES ARE NOT MAJORS.
If you are thinking of becoming involved in the film business or have been approached for financing I would be pleased to answer any simple questions.
If you would like my detailed analysis of a project please let me know and I will give you a price.