ASK & DISCUSS INDEX

10 years ago - Marlom Tander

If you take money from people looking for a profit, you are legally required to use your best endeavours to make them understand just how risky their investment is.

What could possibly go wrong if you don't? You get sued. (You could actually be prosecuted for fraud, but that's unlikely unless you tell a pack of lies that imply that it's a dead cert).

Plaintiff case is basically, "yes, he said there were risks, but then he showed us a biz plan with vizinnes, prints of stills, DVD sales and it all looked pretty good. None of that happened, and no one bought the movie"

You then have to show the evidential basis on which you did your numbers, and show that most industry people would think them reasonable. You are allowed to try, and fail, but need to be able to show that you had a sensible plan, and that you did all that could be expected re it's execution. Every number that you pluck out of the air is a nail in your coffin. Someone like me will look at the numbers and zero in on the dodgy ones faster than Milton Jones can crack a bad pun.

Note that having a Ltd Co will Not protect you in these cases, as you are being held personally liable for your actions.

IMO the only safe story to tell an investor who lacks film experience is "you'll lose all your money unless we manage to sell it. And that depends on the buyers wanting it when we take it to market". You can then ameliorate that with "we will try...sponsors, yadda, stills, yadda yadda though we really have no idea how much, or even IF, any of these will pan out, and chances are they'll just help offset unexpected spending anyway".

IMO if you lay it out like this your investor will probably run away, but ce la vie, in doing so they will have protected you from a bigger loss if they had stayed.

Or perhaps they'll say "right, 100K on spec is too much. But how about we give you 5 to package it up and try and hold meetings with people in the UK and then AFM. We'll give you a letter to the effect that we'll cofund 50;50 up to 200k budget if a channel comes on board. The idea is great, lets just see if the industry will nibble at it before we spend too much".

10 years ago - Giordano Cossu

very good points Marlom, I think that the approach mentioned in the last paragraph is the most reasonable one: rather than "take the money and run", showing a production approach whereby their investment goes into *developing* the product concept and testing the market for co-producers (whether public or private) looks to me the most sensible approach that anybody trying to develop a new interactive product (whether author or investor) should aim to do!

10 years ago - Paddy Robinson-Griffin

You've hit upon one of the biggest questions in the industry (or in any industry, I guess, but particularly relevant in ours).

Sell ads, product placement, sell to a distributor, do appearances with Q&A sessions, make an eBook of the fuller story you can promote from the film, etc. Whether or not you can make a profit for a backer, though, is going to depend a lot on the project, the costs, the appeal, the exclusivity, etc.