The fun part of your pre-production process is over and now it’s time to focus on the business side. And make no mistake about it: As fun and rewarding as it is to make movies, it’s a business. Your potential investor is excited to be a part of the film industry; however, their main goal is to get back every penny they invested in their production with a substantial profit on top of that. And it’s your job to show them that you’ll do just that.
The cover: Simple and direct. If you have a .png file of your script title written in a font that characterizes the theme/genre/mood you want to convey, boldly place it at the top. If you have formed an LLC for your production, on the next line below your title, capitalize “(THE SCRIPT TITLE) THE MOVIE LIMITED LIABILITY COMPANY.” On the next line, write “A company established specifically for the financing of the film (the title of your script). On the third line down, put your company number. Not having an LLC is not necessarily a deciding factor, but it adds credibility to your production.In most states, an LLC can be formed for around $250.00.
The content page: You will list each section of your brochure on this page along with the page number where it is located. Keep in mind that you’ll be reviewing and editing your flyer, so make sure the page numbers are correct as your text moves back and forth on page breaks. The best way to check is to create a PDF of the submission document and confirm that everything matches.
The artwork page: If you have the full DVD cover or sheet (movie poster), insert an image on this page. You can also insert a photo of the cast in the wardrobe.
Your introduction: This is your release. Do this about two pages long, expressing your passion for the project without going overboard (example: “This will be the best horror movie ever made!!!”) Tell your investor why you think in this project, why it is unique and why it will be successful. Don’t go into plot details; that comes later. Here is an introductory paragraph I wrote for a prospect that you can modify and borrow:
Making traditional movies is often a frustrating process for both big studios and smaller production companies like (the production company). Fortunately, for the micro-budget movie producer seeking public funding, the road less traveled is the road to success. Once financing is secured, a major hurdle is removed for our production company, allowing us to focus on the artistic side of the film business and ultimately allowing us to create a product worthy of distribution and sale.
Risk Summary: Remind your investor from the start that you will do your best to make this production a success, but there is no guarantee that you will ever turn a profit.
Summary of principles: Write a short biography of each person in charge of your production with a photo of their head. This could be you. Insert any relevant links that will increase your credibility, such as your IMDb profile.
Narrative biographies: List all members of the production team with a short one-line bio, relevant links, and their film credits.
Business structure: If you have an LLC, you must indicate that you are looking for an active investor in a member-managed limited liability company. In an ideal world, you would have a passive investor who hands you a stack of greens and lets you run with them, but in the real world, most people like to have a say in how their money is spent. If you state that you are looking for a passive investor in your prospectus, then you will face a lot of red tape and the SEC will come down like a hammer if you don’t follow the protocol exactly. The main selling point of the LLC is that all members are protected from liability for acts and debts. If you do not have an LLC, please write a short paragraph describing the business agreement and attach a copy to the end of your PDF prospectus marked “Appendix A”.
Synopsis of the film: Write a half-page synopsis of your feature film. Make it vibrant – really sell your story. Your investor must love the concept if they are going to shell out the dough.
Script rights: Simply state: “(The Production Company) has exclusive control and ownership of the script (script title) and any and all rights associated with such script. Enter your WGAw registration number followed by “Writers Guild of America , West”. Include registrants full name.
Market Snapshot: You’re going to have to do some research here. If you’re writing a prospectus, you should have a budget with a pretty good idea of how much this production will cost. Look for other movies in the same genre as your script that have roughly the same budget and have made sizable profits. List each of these with a brief description of the film, production budget, and earnings to date. The more referenced, the better. Remember, your investor wants to make money and this is your chance to show them what has happened and will happen again if they shell out the money.
Investor tax incentive: This is your KO. The American Jobs Creation Act of 2004 was enacted, creating a tax incentive expressly applicable to feature films: 181 of the Internal Revenue Code. This incentive was created to combat “runaway film” projects: productions intended for release in the United States but filmed in other countries. Section 181 allows for 100% write-off of all audiovisual work done in the US. Bottom line: Your investor can get all the money back from their investment the next time they file their taxes. Pretty sweet, and definitely a selling point for you.
Marketing plan: Sure, we made a movie… now what are we going to do with it? The fact that you have searched for an investor means that you have probably searched for negative pickup offers with dealers and found them unattractive. If you have a good business head and/or marketing background, explain your strategy for distributing and selling your film. Otherwise, you’ll need to set aside at least 50% of your production budget, hand it over to a marketing company, and have them handle that end. In any case, a part of the money you request must go to the marketing of the finished product.
Budget: Well, your investor is excited. Now you hit them with the hard numbers. Write a short paragraph stating the dollar figure you need and that the budget is available for them to review (trust me, they will review it thoroughly…).
Rentals: List all the specific filming locations so your investor has a good idea of the logistics involved in production.
schedule: Here is an example:
Development: Two months (completed)
Pre-production: three months (current status)
Production: Forty-five days
Post production: three months
Sales and income: You are not using a distributor, which means you will be producing the DVDs yourself. There are many online DVD manufacturing companies that will create both your DVD and case at reasonable prices. Break down the manufacturing cost and set your price point. The price point is crucial: set it too high and you won’t move units; set it too low and you will move units but destroy your profit margin and turn off your investor.
Writing a feature film prospectus isn’t easy, but it’s necessary, and if you do it right, you’ve just given yourself a boost over 99% of other filmmakers vying for the same cash pool.