ASK & DISCUSS INDEX

9 years, 5 months ago - Paddy Robinson-Griffin

Whatever percentage you have to give up, but bear in mind 'find £1M' could span a lot, and the £1M will come with costs of its own. If, for instance, the guy he interests is a financier, they'll want a percentage too. They may come in with a loan, or buying stock, secured, unsecured, etc. See what terms you're working towards before making any overtures. Sounds like you need a producer or at the very least take legal and financial advice. A million quid doesn't come without strings.

As for the 'idea', it's worth whatever you agree.

9 years, 5 months ago - Franz von Habsburg FBKS MSc

Thanks Paddy. This is only to deal with the finder who is demanding much which is why I'd like a % guidance. We are only looking for an investor not a loan and will be done through EIS so we're happy to bear the costs but this question is regarding the finder who will not be paid up front but upon results of the gross, pro rata if received in traunches.

9 years, 5 months ago - Marlom Tander

NEVER NEVER NEVER pay a fee to a finder for ANYTHING apart from (and out of ) ACTUAL MONEY IN THE BANK.

It's called advance fee fraud and is the most popular scam in the book. Mainly because it is very close to the legit version.

A genuine finder will say "give me X, Y and Z by way of documentation and I can take it to my funding sources and nail the deal. My success fee will be S". There might well be costs incurred in putting those docs together - legal docs, company structure, accountants letter, distribution agents analysis comfort letters etc but the Finder should NOT be interested in a penny of that. OR be willing to pay for it themselves since :-

They should be pretty damn sure that they will convert their 5K cost into a 50K payday. If not then that tells you they have a less than 10% hit rate. Which is just not serious. Nor do such people have any qualms about telling you their fee. After all, it's not you who is paying it, it's the investor, and the investor is working on net maths.

The fraudster OTOH either gets you to pay something up front, or charges for the docs and is in profit without finding you any money, (and never will).

A while back I met with Nicola Horlick who was running a seed fund. She went through her model. I was sitting there thinking "Bloody hell, she needs a hit rate of better than 1 in 3 to just break even. Bite her hand off if she says yes". My partners (the producers) thought her terms were outrageous. (Guys, you need to be able to this maths, in your head, when in this kind of meeting, or you'll blow it).

Also the 1M is the STARTER FUND? For what budget of movie?

My take – probably a fantasist, possibly a fraudster. But if you want to have some fun, (and like the project enough to commission a writer), suggest that they become the Producer to do the funding deals, but they'll need to invest half the writers fee and cover their own costs until they have raised the money. I doubt that you'll see them for dust.

9 years, 5 months ago - Franz von Habsburg FBKS MSc

Thanks for your input Marlom. The script is complete and packaged with most cast and crew and we have a top director who's worked on five Bond pix and the budget is c.£9m and we're filming in Cologne where we qualify for close on 65% soft money. Any fee will be taken out at source once we receive investments via EIS.

9 years, 5 months ago - Franz von Habsburg FBKS MSc

PS 1m is the EIS cap and if paid 40% tax on that they get it back :-) the movie is www.MargeryBooth.com

9 years, 5 months ago - Paddy Robinson-Griffin

Pretty sure you'll find EIS relief is limited to 30% of the value of the shares for several years now, and the scheme does carry some genuine constraints too. Dealing with £9M you should certainly be seeking specific tax and legal advice :)

9 years, 5 months ago - Marlom Tander

There's a 5M limit on EIS (max funds raised, max 1M from any single individual) and all sorts of general anti avoidance rules to prevent silly games to use EIS to support bigger projects.

Also, with EIS although the rule requiring business to be conducted in the Uk was removed, it was replaced by a requirement for a "permanent establishment" http://www.hmrc.gov.uk/manuals/vcmmanual/vcm13030.htm and if the film is being filmed in Cologne you'd def want advice as to whether or not whatever you do have in the UK would count.

EIS is great for Uk money making UK films in the UK for up to 5M cash down. Move outside that simple envelope and "here be mine fields".

You def need a proper switched on producer who is aware of the current film finance situation.

At minimum you need an accountant au-fait with EIS and Film Finance.

Now might be the time to buy such people lunch, maybe even cut them a cheque.

9 years, 5 months ago - Dan Selakovich

My initial view, Franz, was shock; why do you need that much seed capital? 1.4 million dollars? Is that the amount the "finder" came up with? If so, it makes SOME sense. He'll walk away with 400k dollars of that. Keep in mind, I know almost zero about the UK system, but finding money here in the U.S. is extremely expensive and complicated. Also, I've heard in the past about "SEIS" for seed money from the UK government. I'm too lazy to look into it, but if I remember correctly they had a program as a grant that didn't need to be paid back. And your film is certainly UK "centric." And you have top talent, so it seems you'd be a good candidate if that program still exists. But like I say, I don't know how EIS works at all.

And beware, as Marlom point out. Tax rebates are excellent in spurring film production. But they are also huge draws for fraud. Here in America (and Canada, for that matter), the people I personally know that have been scammed exceeds the number of filmmakers that have used finders successfully. I'm not exaggerating.

So the same guy that is finding the funds also came up with the idea? Is that right? He wants to get paid coming and going? Unless I knew this guy, and knew of his track record and talked to people he's dealt with, that would be a huge red flag for me. An idea for a movie is worthless (and you can't copyright an idea), especially if it's about an actual person, which your film is. I'd be more worried about M. Booth's family and what they want. Or if this came from a biography of Booth, the rights for that book. If this all falls together, I suppose he deserves something, but not if he's fulfilling the role of ad hoc producer (which he seems to be). I guess you could look at it this way; rule of thumb payment for a script is 2.5% of the production budget. How much of that do you suppose this idea is worth? .5%? .05%? Especially since you could have found it on your own, being an actual person and all. This may be all legit, but man, it doesn't pass the smell test for me. If he's getting a cut of start up funds, that's plenty.

9 years, 5 months ago - Franz von Habsburg FBKS MSc

Yes, he came with the idea as we hadn't heard of her but when we got our production accountant who'd worked on The Reader in Berlin, he had. I picked 1m only because that is the EIS cap but we could start with a lot less. Mind you,, if someone out there had several companies then each company could put in 1m :-) and there is no Booth family. No kids, siblings etc. and she died alone :-( and no book as I'm also writing it :/) so all info is from research, press cuttings etc. and this isn't a scam as we know this person well.

9 years, 5 months ago - Jane Sanger

Hi Franz, I thought the EIS cap was higher than 1million , I thought it was 2 and others here are saying 5 so that's worth checking. The problem you may have is that you want to get 1mill for start up. And from my experience this should have a commission rate on receiving fees of around 10 per cent, but unless this coming in one hit, each investor will probably want something which will cost you so it impossible to tell what amount you will 'loose' of the 1 mill. However I presume you want this for seed money which means it would be used before you start and not many investors will want that it's not bonded and there is not so much chance of getting it back( high risk) Maybe it's not for seed money. There is a good accountant and bond guy and you need a good lawyer at our media club. Usually money like that is held by a lawyer or accountant to stop it being used til needed and not used for seed money. Sorry I know this was not the question but this person who may get you the money does not seem to be asking the right questions so a bit suspicious. But hey he might have a wealthy contact or 2 and that's not to be sneezed at. Someone just offered me 250,000 so I know they exist

9 years, 5 months ago - Jane Sanger

Ps 10% for seed money 3 -5% for the rest of it!

9 years, 5 months ago - Franz von Habsburg FBKS MSc

Thanks Jane. I know who you mean at the lunch club and know them both so will be using them. I'll contact you soon about arranging a visit offline.

9 years, 5 months ago - Marlom Tander

Franz - a while since this was area but Jane's numbers sound right. Seed money is expensive because seed funders (people who will let you spend their money in early stages, before full finance in place) are only slightly more common than Unicorns.

Perhaps what you really want is "first money", which is some level of binding (or at least strong) commitment from an investor that "subject to commitments from other people to the sum of 9M, my share of the 9M shall be 1M". That's something you can take to market as "raised" but not something you can spend :-) Basically an investor is saying "love the idea so much I've set aside 1M for it, there for the asking if others come on board".

Also, EIS, you have to read up on it. It doesn't matter how many companies a person has, EIS is a relief against personal Income Tax.

cheers