ASK & DISCUSS INDEX

9 years, 9 months ago - John Lubran

A useful cautionary observation Vasco though I don't believe that it's a universal generalisation. Human stories are far too varied for it ever to be so.

I'd also suggest that you really don't know who the folks are that frequent these lists and neither can you be so sure that none of these folks are as qualified as the people over at LinkedIn.

As I've often stated here. 'One should not take ones own case for a generality'

9 years, 9 months ago - Lee 'Wozy' Warren

Vasco - it's all about context. You should never say never to anything as a rule of thumb. You should do your own due diligence about who you are working with. If it makes sense, then sure pay them. If it doesn't, don't. Sometimes the fees asked are legit and sometimes they're a con.

You as a professional need to work out which is which and make the best call you can on the situation - based upon the context. Just saying 'no' as a rule can shoot you in the foot as many times as it saves your (professional) life.

Wozy

9 years, 9 months ago - Vasco de Sousa

Thanks for all your comments. Seems very different to the LinkedIn group.

Anyway, the guy said, you pay for someone to write a budget or draw up contracts, a specific service where you get an end product. But, if you're looking for someone merely to find money, they get paid on commission. Their product is getting the money. (And yes, there are people in the UK who do this for a living.)

There are people who fill out forms for a living, applying for grants or trying to find customers. That's not what this is talking about. An employee who fills out forms is doing a job that's quantifiable, and you can see if they are working.

What we're talking about is people who try to get you to pay them upfront as a kind of freelance money finder. You have no way of telling whether they've done the work they are claiming to do.

In California, it's apparently illegal for them to charge in certain ways. (Of course, most of us are in the UK on this list, I don't know the laws regarding charging fees here.)

9 years, 9 months ago - Marlom Tander

Paying money to raise money. (Not just in films)

OK is :-

IF they have a track record and can prove it. These people will be delighted for you to check their references. They do not expect you to take your word for it. Due Diligence is part of their life.

Their fees will usually be something for their time in getting stuff done to get you to the level that the money needs to see.

A lot of it is getting "stuff you know" down on paper in a format that the money understands and can trust so that you can show that you know it.

In general business this would include cash flows and financial projections done to standards, valuations of non property assets (property would be valued by a surveyour) and a general crossing if I's and dotting of T's re IP, patents, HR issues, credit checks on company and directors etc etc.

In film, maybe getting you nailed down on what "Joe Smith is interested in playing the lead" means - got an actual LOI from his agent "subject to diary and terms" or "well, met him at a party and we got on really well and I'm sure he'd remember me". Plus nuts and bolts of scheduling and budget and marketing plan etc.

Note that many fees will be passed through to other experts for their work. Do the math, your guy should be covering his costs taking you on, but he shouldn't be making profit unless he succeeds in raising money.

The best of them will grill you at first meeting - they want to know that they have good odds of success because otherwise they're wasting their time.

NOT OK is :-

Anyone who, when you crunch the numbers, seems to be making their living from the above fees even if they fail.

They may be honest, but they are honest failures.

RUN AWAY FAST from :-

Anyone who even implies that paying fees will release money. This is Advance Fee Fraud territory, and is a con as old as investment itself and if you fall for it, you will lose your money. It relies on the idea that you are willing to pay 1-3% up front to release the money. "The money's there, as soon as your fee hits the bank, we'll do the paperwork and you'll have it next week". These guys tend to prey on businessess people in trouble, they do take the trouble to set up dummy companies, fake web sites etc because it costs pennies and brings in pounds.

If in doubt, VISIT every address (oh look, it's Mailboxes r Us), check WHOIS (and if privacy protected, walk away).

9 years, 9 months ago - Dan Selakovich

Accurate and cautionary reply, Marlom!

I might also add, that if you are a first timer, and walk into a meeting with these professional money people, be wary if they say "yes."

I've never heard of any situation where these legit money guys took on a near impossible uphill battle. Don't have great stars, a solid producer with a winning track record, a professionally done prospectus? And still they say, "yes"? I might be hugely wary of their end game, even if money doesn't change hands.