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Old 09-04-2011, 12:12 PM   #1
Nate North
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A Snowball in Hell

I've been promising for a while to write some threads about putting together money in a vaccumm.

Here's what I did, a technique I call "Snowballing"

1. I made some money

I got a job filming an event for Hyundai and got paid 10 grand for the shoot. Put all money in bank.

2. I count up my current applicable resources, and add them to the total

several rendering stations, 7k in sound equipment, thousands in 3d models and design templates, etc

3. I go to the first investors and say, I've got 30k into this thing, and will you throw in another 10-20k

They give me the 20k

4. I go to the second set of investors and say, I've got 50k into this thing, you want to throw in another 20-30k

5. I go to the third set of investors and say, I've got 76k into this thing, you want to throw in another 30-40k

So in this way I've gotten up to near 80k based on initial holdings of 10k. I go to another indie filmmaker and say, I have 80k, you have 80k, let's each buy half of a movie camera, knowing that neither of us will use it more than a few months a year. I'm now out actively leveraging that 160k towards raising 300k.

It's super important to note that I go to these investors with properly formatted business plans, show them how I'll repay the money, and cite my sources for them to do reference checks. I'm not running a pyramid scheme, just escalating the external perception of my scale. They have it in writing what I'll do with that money and how it will be repaid.

Another component is cold calling. At some point in your fundraising efforts, you will run out of people you know personally. At this point you'll find yourself wondering who to talk to. No one want's to be accosted by a stranger asking for large sums of money right?

You need to have something to offer them, and then strike up a conversation on their turf. I call every listing in the phone book for cameras, rentals, lenses, studios, production houses, etc. I ask immediately for the head person, and then the secretary says "what is it you want to talk to them about". I say, "I want to talk to them about bringing in 160k in equipment to your operation." That gets me through every time. They basically just want to know that you aren't a Jehovah's witness etc.

Once I'm talking to the owner/president, I make a fair an honest proposal based on the resources I do have. I try to make friends with them, really, not as manipulation. I'll ask them to grab lunch with me, chat a little about making films, etc. About one in 8 times this works, and I've started to make friends with people that can actually be of some assistance. I start doing business with them, keep things fair and don't let them down, and soon I'm developing trust. As these assets and connections build up, my chances of getting into the correct circles increase via introductions, and references. At the same time, I'm squeezing every last drop of income I can out of each piece of equipment I get, and using that income to repay the earlier lenders.

So I've gotten this far, and now have almost a complete set of hardware to begin cinema grade feature production. I'll simply keep my word with all these people, and I'm building a foundation of trust and business ethics that others hear about.

At this point we are going into the real investment search, armed with hundreds of pages of documentation, at all levels of interest. (1 sheet, 3 page, 15 page booklet, 75 page illustrated overview)

I've recruited professional salesmen and internet networking specialists to begin the process of combing the region in an outward geographic spiral, connecting to every serious investment group and known angel investor.

I'll tell you guys how it turns out.
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Old 09-04-2011, 04:40 PM   #2
Morris
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Good luck.
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Old 09-04-2011, 05:26 PM   #3
don patterson
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With all that top-of-the-line equipment and know-how experience... Death Walks Behind You.

How many times have you heard this? I have no money but i would like to make a high-quality, top-of-the-line production 'looking' movie...

My aged DVcam equipment are closer to toys in comparison with yours, but I have no current debt... debt in today's reality, scares the crap out of me.

If wishes were horses, then the-working-class-poor would ride.

Nate, need to feed the monster. Make something.
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Old 09-04-2011, 05:42 PM   #4
PaulGriffith
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Just curious, how do you deal with percentages and who gets what return? Are you promising a fixed return (ie: $35k for a $20k investment) or have you worked it out that each gets his equal ownership?
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Old 09-04-2011, 09:39 PM   #5
Nate North
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Quote:
Originally Posted by PaulGriffith View Post
Just curious, how do you deal with percentages and who gets what return? Are you promising a fixed return (ie: $35k for a $20k investment) or have you worked it out that each gets his equal ownership?
I just set it up as fixed interest loans, on a long enough timeline that average predicted rentals payout 3-5x the minimum loan payment. On a long enough timeline, it's really pretty secure.
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Old 09-04-2011, 09:44 PM   #6
Nate North
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Quote:
Originally Posted by don patterson View Post
With all that top-of-the-line equipment and know-how experience... Death Walks Behind You.

How many times have you heard this? I have no money but i would like to make a high-quality, top-of-the-line production 'looking' movie...

My aged DVcam equipment are closer to toys in comparison with yours, but I have no current debt... debt in today's reality, scares the crap out of me.

If wishes were horses, then the-working-class-poor would ride.

Nate, need to feed the monster. Make something.
I'm thinking about it. Remember Don, I'm working class poor as well, I'm just taking a lot of risk and using leverage.

I'll contact you soon about DWBY.
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Old 09-05-2011, 08:37 AM   #7
don patterson
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Absolutely NO PRESSURE. You are under enough already.

I just hope you haven't bit off more than you can chew. Wish you the best. You have guts. I invested $20,000.00 in equipment twelve years ago. Granted, it was a lot less then you have invested, but it took me eight years to pay the banks back. My wife (over 30 years) was on my back almost every breathing day...

Just know that I am rooting for you to succeed, whether we do a movie in the future or not. Hope Death Walks Behind You got some interest. Wish you the best. Contact when you can...
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Old 09-09-2011, 02:28 AM   #8
DirtyPicturesTV
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Best of luck, and please give us updates.

As somebody interested in producing their own feature, I'm very curious about the various methods that others are trying.
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Old 09-09-2011, 02:52 AM   #9
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Dude. I'm very happy to see that you've got the business side of things rolling. Big ups!
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Old 09-09-2011, 11:38 AM   #10
directorik
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Quote:
Originally Posted by Nate North View Post
I just set it up as fixed interest loans, on a long enough timeline that average predicted rentals payout 3-5x the minimum loan payment. On a long enough timeline, it's really pretty secure.
This interests me.

Do I understand correctly that the investors loaned you the money
at a fixed rate? Is the agreement that you pay them back no matter
what happens to your business?
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Old 09-09-2011, 12:50 PM   #11
Nate North
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That's correct. The business is film and content production, but the loans are secured through rentals. Much of the borrowed money comes from the rental houses themselves, who all want to claim this high end equipment in stock, but are notoriously "thrifty"

I tell them they can take their loan payments directly from rentals, and it eliminates the trust issue, and puts the business side in an area they are specializing in.

It works surprisingly well.

As a director yourself, you know that there are a lot of pre and post days compared to shooting days, so logically, you can leave a lot of your equipment in the insured vaults of these rental houses, and make money while you edit and color the footage from your shooting weeks.

I suppose now someone will want a walkthrough of one of those cold calls. You just need a phonebook and a brain.

The key is to view it all as rental properties, optimize that as a business, then use your own rental houses as $0 lending libraries for cine equipment.
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Old 09-09-2011, 01:24 PM   #12
directorik
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Quote:
Originally Posted by Nate North View Post

As a director yourself, you know that there are a lot of pre and post days compared to shooting days, so logically, you can leave a lot of your equipment in the insured vaults of these rental houses, and make money while you edit and color the footage from your shooting weeks.
You are correct - I know about the production process.

I am interested in the business plan you put together - it's
unique to me. I am not interested in following it - I do not
own high end equipment, I am a renter - just fascinated by
the loan aspect.

Glad it's working out.
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