How To Access The Secret Film Investing Club

In this week’s filmmaking question, a reader asks the following about investing in a webseries.

Question: I’m doing a webseries and I am distributing to YouTube and iTunes so far. I’m not launching till at least Feb when everything is done. I am doing this out of pocket and need funding. I don’t have wealthy friends nor do I know any rich people. What’s the first step in obtaining an investor? Is there a group of people that invest? I’ve tried those crowdfunding sites to no avail. Any suggestions?

One of the most frequently asked questions in filmmaking is: How do I find someone to invest in my project?

While the answers vary from asking your dentist for money to calling your rich uncle, I am going to tell you a secret that most filmmakers don’t want you to know. Are you ready?

Angry businesswoman

Secret Film Investing Club

There is a top secret, underground group of prospective film investors who are hungry to invest in unproven projects, produced by unknown filmmakers and they are chomping at the bit to give you their money. That’s right. I’m taking about the secret film investing club…

But before you can be admitted to the club, you must first decipher the secret password.

Just kidding… There really is no such secret film investing club.

But there is a myth perpetuated in this industry that leads most filmmakers to believe otherwise. This is evidenced each year by the gazillion, first time, hopeful filmmakers who flock to The American Film Market and end up hobnobbing with Hollywood posers who pretend that they are actually interested in financing unproven projects.

While some filmmakers get lucky, many leave AFM with a list of “good contacts” and “great feedback” on their project and spend the next two years chasing a carrot on a string. So instead of taking this route, I suggest learning how to think like an investor.

What’s the first step in obtaining an investor?

When I started out, I didn’t know any rich or successful people. I grew up in a small town surrounded by factory workers. Like most filmmakers, I spent a lot of time trying to figure out how I would find an investor for my projects. At one point I read a book totally unrelated to filmmaking called Rich Dad Poor Dad. The book talked about rich people – how they think and what they look for in investments.

Inspired by the book, I started asking friends if they knew any rich people. One of my friends mentioned a local auto dealer who owned a dozen dealerships. One day I picked up the telephone and called his dealership. I left a message with his secretary. And to my surprise, the prospective investor called back and agreed to meet.

That single meeting was the beginning of a business relationship that I still maintain to this day. (For the record, this guy was worth 67 million dollars.)

Later when I worked with a producer in New York City, I found out that the strategy for finding investors wasn’t much different.

So the first step in finding a prospective investor is to ask friends and family if they “know of” any rich people. If someone mentions a name, reach out and request a meeting. If no names are mentioned, then I would pick up the Yellow Pages and look for the biggest ad. People pay a lot for those ads – so if you find one, why not attempt to connect with the CEO for a meeting?

Is there a group of people that invest in projects?

If you Google “investment clubs,” you will get a ton of results. Just know that if you find a legit group, they probably focus on popular investments like stocks or real estate. While I would encourage you to attend a few meetings, refrain from pitching your agenda until you make sure members are open to new types of investments. Your initial goal with any first meeting is to make friends and see where it takes you.

Assuming you take the necessary actions that lead you to prospective investors, I would not make a pitch until you figured out how to answer a few basic questions, usually as part of your business plan:

  1. How will the money be spent?
  2. How will you recoup the money?
  3. How soon will you recoup the money?
  4. What is the projected ROI?
  5. Why should they invest in your project over other investments?

Think of it like this – Most investors make 8% to 12% on their money in a good mutual fund. Add the fact that a solid real estate investment could produce this return, plus cashflow and it is easy to understand why asking people to invest in an unproven project is challenging.

Thoughts on Crowdfunding?

Aside from raising money, the more important aspects of crowdfunding include testing, proving and pre-selling a concept. Additionally, a crowdfunding campaign allows you to test the footprint of your social influence. When crowdfunding attempts fail, it could mean the concept is not yet interesting to the marketplace, the filmmaker’s social media reach is limited or both.

When in doubt, think of your project from the perspective of a prospective investor. What seems more risky? The guy who just had a successful crowdfunding campaign, sourced a mailing list of 10,000 people and has advertisers offering to buy advertising space… Or the unproven project with no plan for ROI.

Don’t be that guy.

Just because you are filmmaker, producing a short, webseries or feature does not mean that you are no longer bound to the general principals of business. You must never forget that you are creating a product. So before you approach any prospective investor, you need to first figure out how your project will make money.

In the end, while there is no such thing as a secret film investing club, the are financial rewards if you’re willing to hustle.

If you like this film finance advice, check out the Film Finance Guide.
 

Comments

  1. Bryan Bachar says

    I’ve learned so much of this over the course of the last couple years as I’ve developed and produced my first feature length film, Fight 4 Your Life, which which will be finally wrapping in August. Even getting a few bucks out of people you would think would “love” to help you see out YOUR dream proves to be a huge challenge. And YOUR is the key word here. People tend to not care about YOUR. They want to know about THEIR. What’s in it for them?

    A perfect example is this gentleman I know who is quite deep in the pockets and an avid movie lover. The guy even built his own home theater. And from what I’ve seen he’s the type that loves to be the host, you know, having people over and wining and dining them, etc. It seems he likes to be “the man”.

    Now, I don’t claim to know the guy very well, but I’ve definitely worked with him and spent social time with him. He knows me and I know him, period. Plus, when my crew and I first set out to make the short version of our film in 2012, which I later developed and rewrote for the feature length version we are now about to wrap with, I had actually thought of this guy as the lead.

    During that time I had the idea of this film originally being a comedy. And this guy is a bit of a clown, having shown such on multiple YouTube videos, etc. I thought he’d be open to the idea. Turns out I was wrong, although he did show interest in the project, which we ended up going a more serious toned route with anyway.

    So, I thought he’d be a perfect person to approach when I embarked on this feature’s journey. I mean, all signs pointed to YES in my mind. But, wouldn’t you know it, the guy wasn’t willing to budge with a single cent. I wasn’t even asking for a lot, to be honest. Twenty bucks would have been great for the cause in my eyes. But this guy, Mr. Money Bags, Mr. Movie Lover and Mr. Host, wasn’t willing to budge with absolutely anything.

    It finally downed on me something I had heard many times but never really thought of….rich people are rich for a reason…..In other words, they make smart choices with their money and tend to not give it away. This guy obviously didn’t want to get into things with me and this film because he doesn’t view it as beneficial to him in any way. Ok, sure, he’s being a real tight wad by not even wanting to donate a few bucks for the cause. But, perhaps, he just doesn’t want to give a few crumbs, enabling someone like myself to feel like the door is now open for the whole loaf of bread. Feel me?

    The bottom line is people don’t enjoy giving their hard earned money away. And why should they? This is why what you have placed in this article is so great. This is the mindset you have to go into making a film with. What’s in it for your potential investors? Why should they invest or donate to your “magnificent project” over that of someone or something else?

    Filmmaking is a business. And no matter what your big picture is with your film, whether you want it to be a money maker or simply a “creative masterpiece” for all to enjoy, you have to think in terms of business to make it happen. This is the part of the game a lot of filmmakers just refuse to get.

    We have to adapt to this mindset, even if our heart is in the art. Otherwise, our art will never exist, or, at least, rise to its full potential as seen in our minds.

    – B

    http://www.fight4yourlifemovie.com

  2. Charles Pointer says

    My name is Charles Pointer and I am looking for financing to do movies on my two books which are selling on Amazon. One is called The Making of a Black Belt Karate Champion and the other one is called The Autobiography of Charles Henry Pointer His Life His Legacy. I am the author. My other book called A Time To Remember will be published a month from now when I submit it to my publisher. I would love to submit a script to a movie producer. Can you help me in this effort?

  3. cary Hall says

    Your work is very interested in much way, and it opens a door in the mind of any one who wants to do business in the movie industry and find some one to invest in their work.

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