A model for indie film financing
In which I've failed to actually secure said financing. But success means nothing without first encountering failure.
Success and failure are two sides of the same coin, and often go hand in hand. Failure is a natural part of any journey towards success. It is through our failures that we learn the most valuable lessons and make progress towards achieving our goals. This is particularly evident in one of my favorite TV shows to rewatch of late—Ted Lasso.
Ted's approach to coaching and competition, which emphasizes kindness, empathy, and a growth mindset, is exactly what the team he coaches—AFC Richmond—needs to succeed.
But primarily, throughout the series, Richmond experiences both success and failure, but it is largely through their failures that they are able to learn and grow the most. The successes are the reward for the long journey of failure.
Without these failures, we would not be able to learn and grow, because success without the context of the struggle it took to earn is meaningless. I’ll return to this in a moment. But first—
Let me see if I can recite to you everything I’ve got going on in my life at this present minute.
Currently trying to buy a house in another state. And because my wife and I refuse to buy sight-unseen, this means multiple 3-hour+ trips (one way) to check out what have all turned out be duds.
Formulating a Kickstarter campaign for our next short film, Frigid (which I posted about last week). This involved traveling last week to upstate New York to film a “talking head” piece for our video, as well as various promo slots leading up to the launch. Also writing up the launch page content, developing perks, and doing some pre-launch asset building.
Still in pre-production on Lucid. Mostly this is for raising financing, so this involves meetings with producers, pitching, et al.
Revising three feature scripts, all three of which are for producers.
Writing one new feature (for funsies).
Developing a second new feature (for funsies).
My “day job,” which is how I pay rent, and it sucks a good 8-10 hours a day of my time.
Oh yeah, and this weekly newsletter.
Clearly, I don’t have enough going on in my life.
If my entries over the past (or future) few weeks feels harried, it’s because I probably am juggling a massive mental load and have a deficit of free time.
Then again, I’m not a parent, which means I have it 100000x better in terms of not going absolutely insane. Every single of one of my friends who have kids have all been living in plague houses for the past three months. Not COVID, thankfully, but pretty much every other kind of child-borne illnesses have abounded, and cycled through families like Leonardo DiCaprio goes through girlfriends between the ages of 21 and 24.
You parents—you are true champions. I salute you.
🎥💰 Film Financing: A Guide to an Indie Financing Model
You may have noticed I’ve been writing more about financing and money for filmmaking lately, and specifically for independent producers. The challenge has always been how to manage the various cogs and gears of film financing that are connected in seemingly intractable ways.
There’s usually a Catch-22 in which you can’t get money without attaching X or Y (say, a top director or box office-friendly talent), but you usually can’t get those attachments without having at least some money to wave in front of their faces. What to do, what to do?
I thought I’d throw a VERY, VERY basic guide over to you on ways to navigate this process to avoid that problem.
Keep in mind I’m writing this as someone who has NOT YET ACHIEVED THIS IN MY OWN PRODUCING WORK. Remember, this whole Substack is largely a public proclamation of my own failings. YMMM (your mileage may vary).
In fact, one of my biggest failures was thinking of approaching equity financing FIRST, rather than what I should have done (outlined below). What I’ve learned is, just like there are deal flows, there are financing flows that one ought to follow to maximize your attractiveness with each stage of the financing process. That’s not to say this is a static, rigid model—so I guess technically you CAN do any of these steps in any order you like—but…well, just keep reading and you’ll understand why that may not be optimal.
From what I’ve been reading, the model I’m about to outline for you below is something established and veteran producers use when they aren’t embedded within a studio system. And, due to the current changes happening in the film industry, particularly with streaming services retracting or shrinking their financing and acquisition of independent films, this structured finance model—AKA the indie finance model—is gaining renewed attention.
This model involves combining private equity with tax credits, soft money, debt, and pre-sales to finance a film project. Below is the general framework for achieving this—but it’s by no means complete nor fully fleshed out here. Each one of these aspects could (and probably will) warrant their own separate Substack posts.
Development and Packaging
The foundation of independent financing is in-house development and packaging. Without it, the whole process falls apart. You can’t attract talent or money with a script that is in desperate need of rehabilitation. I mean—you can—but gosh, why would you want to start off with a terrible script? Let’s just not entertain that notion. Get your script in order. Then start talking to partners with whom you have established rapport and who may be willing to work with you in some capacity (co-production? referrals?). Establish an entity under which the project will live. Set up your business, get your bank accounts and paperwork in order—be ready.
Secure a Sales Partner
Last week I wrote about how Sales Agents could be the grease beneath your airplane wings, helping your project to soar where it might have been languishing on the tarmac otherwise. A Sales Agent could be crucial to secure pre-sales early on, creating momentum and confidence for other financiers. It’s easier to secure a Sales Agent when you have some attachments, but there are some who may consider your project without attachments IF the script is super solid and right for the market (their job is to know the market as well as or better than anyone else). But—this will take a lot of researching and cold querying.
Debt Financiers
The debt financing step can be tricky. Get advice from your Sales Agent or an experienced producer/EP on the best companies to work with. If you're not confident in putting together a finance plan, hire a team member who does. Debt financing is a fascinating subject I’ve been reading more about, and I will do a post on it at some point in the next few months.
Equity Investors
Find those equity investors who will invest cash or equity into your project. Approaching equity with all other pieces in place gives you a better chance than pitching a 'naked' project. This is largely where I had jumped the gun, but to be fair to me, there are models in which private equity is the ONLY step you take before undertaking the step of attaching talent—but that usually only works when you’re talking to investors who are casual film lovers or who have zero understanding of the business.
Close Financing
All the pieces have been put together and you’ve closed financing. Most likely this won’t be a single deal, but will involve multiple deals and financing partners (each with their own terms, etc.). If this whole section feels daunting to you, you may want to consider hiring someone with experience in closing multi-party financing plans.
So, look—this is all really top-level stuff, and I’ve purposely not gone into a lot of detail, in part because they all are more complicated and require getting into the weeds, and in part because I’m still figuring this stuff out myself. Also, I’m well aware that none of these explicitly go into how to avoid the dreaded Catch-22. I think that’s not something that I can get into on this post.
I will try and break these down more over the next few weeks. If it seems like this film producing stuff is complicated—IT IS!
I do feel like I’ve been failing a lot more lately than I’ve been succeeding, at least as pertains to the producing game. Lucid is and always was going to be a messy project in the sense that I was going to be learning this stuff on the fly. Producing short films does not prepare you for the sheer scope and scale of a feature film. There simply isn’t a comparable there.
But I don’t lose heart. I’m succeeding in the right ways. I’m learning. I’m becoming braver. I’m getting to know people who are generous with their own knowledge and experience, and they’ve shared some of those things with me. I am trudging more than running—but at least I’m moving.
So failure—she’s not so bad when you look at her the right way.
Schmaltzy? Sure. But true.
I meant a lot.. Like whew lots of work put into iit and lots of work ahead for anyone to do what you said.
Whew..... Good luck on your house dream😁. It's a long time in coming.
That article was exhausting just to read, ha ha ha... You're a mench. 😘