Understanding Money

understanding moneySince my background is at the Institute for International Film Finance, and I put in a year at Global Film Ventures, I get a lot of filmmakers contacting me asking me to help them fund their films.  Some of them are good pitchs, most are not.  Getting investment for you film is incredibly difficult, if not nearly impossible.  There are many reasons for this, but one that is not often talked about is the fact that many filmmakers have a mindset that money shouldn’t come with strings, and that all they should need to worry about is making the film.

There’s this attitude filmmakers have that someone should just give them a check then go away so they can make the film.  I’ve had many filmmakers say that flat out to me, and the ignorance of it is incredibly disturbing. There’s a lot more to investment than just writing checks.

 

Angel investors didn’t get their money by giving it to just anybody.  Investors generally do quite a lot of legwork to research those who they invest in, and they’ll never invest in someone they don’t trust.  This attitude of “just give me the money and let me be” is a huge red flag, and makes an investor far less likely to trust you.  If they don’t trust you, they won’t invest in you.

Once you take money from someone, you have a responsibility to them to send periodic updates, and let them know how everything is progressing.  You need to be available to take their calls at most any reasonable time, and always return their correspondence within at most two business days.  All money has strings, and you can’t expect an investor to just write you a check then never check in on you.

Another attitude problem a lot of filmmakers have is that they feel they don’t need to understand business.  Many feel just need to make the best film possible and money will come to them.  While there’s a kernel of truth in that, relying solely on making the best film possible is a great way to end up broke with a film that never goes anywhere.  The best product without a marketing team will never make money.  Filmmakers do need to make a great film, but they also need to understand at least the basics of how to promote a movie and how it will see revenue.

Distributing a film, promoting a film, and selling a film are all incredibly different skill sets that require decades to master.  Filmmakers can’t be expected to be experts on every job involved in making a movie.  They do, however, need to understand what they don’t know and compensate for that by getting people on their team that do understand how to do those jobs.

In essence this is the difference between a producer and a production manager, or the difference between an executive producer and a line producer.  Line producers and production managers are great at understanding how to manage a crew and get a film in the can.  Producers need to have a good understanding of business, negotiation, deal making, finance, and distribution.  Executives do the latter almost to the exclusion of everything else.  Every film needs at least one of each of these people, and really they shouldn’t be the same person filling multiple roles.

Every film needs people who understand money, how to raise it, how to make it back, and creative ways to save it.  Filmmakers of all kinds can be excellent at the last part of that.  Innovative bootstrapping is a skill perfected by many guerilla filmmakers.  That said, you still need money, and people who understand how to make a film see revenue on your team.

Even if you find an intermediary who can help you get the money from angels, you’re still going to have to have regular phone calls and meetings with that intermediary.  In fact, that intermediary is probably going to have more contact with you than an investor would because they understand both investment and filmmaking.  You need people like this on your team, and you need to understand that you’re creating more than just a film.  Every film is in essence a business, and in order to run a successful business you need skilled business people just as much as skilled artists and visionary directors.

Whenever you seek investment, it is into your business.  You need to understand that the business is necessary.  You also need to have an appreciation and at least a basic understanding of what it takes to make money in business.  This should not be your sole consideration, but it does need to be part of your plan when creating a film.  If you do not include this in your plan, you’ll never actually see revenue from your projects.

So readers, if you’ve ever thought that all you need is someone to write you a check; remove that notion from your head.  In order to get money, you need to understand money.  Only if you understand how money works, and have a good business plan will you be able to successfully get investment and make a profitable film.