Financing Plan

The complexities and options in the financing of indie films is far too extensive to cover in one web page, but we’ve created a financing plan for The Debut that we’ll try to boil it all down with a few basic points.

FILM FINANCING BASICS

Most films begin by setting up an LLC, and the funding of the film is achieved through the selling of shares in the LLC.  A $100,000 film, for example, could sell 100 shares of $1,000 each.  The number of shares each investor purchases later determines the percentage of profits they receive in the back end.

This is the model we will be following for The Debut, but expanded and specified for our purposes.  Our financing plan is made up of 3 stages:

STAGE 1:

CROWDFUNDING

Crowdfunding is one of the newest film funding opportunities available to filmmakers, which has only come about in the last few years.  With crowdfunding, filmmakers can solicit donations and contributions from the general public in return for various rewards.  By not offering back end points to contributors, the filmmaker is able to get around securities laws that apply to selling of shares.

For The Debut, we’ve established profiles with the two largest crowdfunding services, Indiegogo, and Kickstarter.  Our goal is to raise $15,000 to $20,000, which will be put toward legal fees associated with setting up the LLC, sign the bands to the film, develop artwork, and start putting together the package to sell to distributors.

STAGE 2:

DEVELOPMENT

Many films set up a development fund that they use to package the film to the major investors and distributors.  The “package” includes hiring top name actors and key crew people with experience producing profitable films.  It’s “seed money” at it’s most basic.  Doing this creates two classes of investors, Class A investors and Class B investors.  Because the risk is higher (even after the development money is spent, there is a possibility that the film doesn’t happen) Class A investors receive extra points on the back end of the movie.

In the case of The Debut, we are offering our Class A investors 100% on top of their original investment.  So if someone were to invest $10,000, they would first receive their original $10,000, then an additional $10,000 before any profits are split.  In other words, as producers, you would receive double your investment back before we make a dime.

This development money will be spent to hire A-list actors, produce sales materials, acquire pre-sales and foreign sales agents, and complete the package we will use to approach production and distribution entities.  Our goal is to raise $200,000 in development money.

STAGE 3:

GENERAL INVESTMENT

Once the project is in place via the development money, we will approach film investors and investment groups that regularly invest in independent film.  Through a combination of primary investors, tax incentives, and gap loans, we will finish the financing package and begin production of the film.