SMALL SEED FUNDS.. Literally small return period

[NIGHTFLYER]

Ok here's the thing. I responded to this investor looking for projects on a respectable financing board. It's not exactally film related but the posting said looking for good projects. I e-mailed this person and he e-mail me back. I called him and we had a good lenghty phone conversation. I asked all the general questions, are they and actual investor or finance company, are there any FEES involved, how long does the financing take. Well he is an ACTUAL INVESTOR in Florida a retired accountant, actually he had posted on several boards about a year ago but everyone kept e-mailing him with bogus requests like " they want to buy a car, or they want to put down on a luxury apartment. He is NOT A BANK or FINANCE company. He is looking for worthwhile projects he can invest in and make a good return from. I told him about my film project and he seemed interested. He likes films and something he wanted to consider pursuing. Now the thing is he doesn't know about the film biz;so I gave him the condensed 411 and he was interested. I sent him the budget and synopsis. He is comitted to invest between between 100-300,000. But this is not him pulling the strings; but there small fee of $750 this is for legalites and due dilligence and such. It would be immediately returned upon completion of the actual funding so look it as a short term loan. If it was up to him he wouldn't charge the fee but like I said this isn't in his control. Originally it would have been more but he convinced his parties to be negotiable. Providing if this successful this guy would a golden key for many other struggling filmmakers and such. I told him straight out if he is the real deal the opportunties for you are endless. He is very prompt in responding to my e-mails. He is not requesting any moneygrams, or anything like that. The transaction is to occur by wire transfer. The funding process takes between 3 weeks-1 month.

So if anyone is interested please let me know and I will foward his contact info for anyone to contact him with any questions.
He requested e-mails. Serious inquires only.

After all the bumps and dead ends I've encountered for the past few years. For some reason this come across my path for a reason. I learned from my deceased grandmothers wisdom. Opportunties can come at you from the most of unexpected of places never close doors.

My e-mail (cobrahawkster@gmail.com)

[cameronchapman]

If he's requesting $750 from you to cover fees, I'd RUN in the other direction. What guarantee do you have that you'll ever see that money again? Or that you'll ever see any money? He's an investor but can't cover $750 worth of costs himself? The ONLY thing I would consider doing is setting up an escrow fund with $750, with those funds automatically being returned to you upon completion of financing, or going to him if he finds out you lied about anything during your discussions. I can understand a financier wanting some kind of assurance like that (after all, if he suddenly finds out you're a convicted con man who's been feeding him a load of crap, I can see where he'd want some kind of assurance that he'd get his legal fees back).

But seriously, $750 is a lot of money, and there's no way I would send those kinds of funds to someone I didn't know under such incredibly suspect reasons...

[TheNoob]

Originally Posted by cameronchapman

If he's requesting $750 from you to cover fees, I'd RUN in the other direction. What guarantee do you have that you'll ever see that money again? Or that you'll ever see any money? He's an investor but can't cover $750 worth of costs himself? The ONLY thing I would consider doing is setting up an escrow fund with $750, with those funds automatically being returned to you upon completion of financing, or going to him if he finds out you lied about anything during your discussions. I can understand a financier wanting some kind of assurance like that (after all, if he suddenly finds out you're a convicted con man who's been feeding him a load of crap, I can see where he'd want some kind of assurance that he'd get his legal fees back).

But seriously, $750 is a lot of money, and there's no way I would send those kinds of funds to someone I didn't know under such incredibly suspect reasons...

It's also very difficult to believe someone would just give $300,000 to gamble with. Aside from the fact that the man knows nothing about filmmaking lol. And on top of that he's accepting more filmmakers? And he had other offers in the past which supposedly turned out to be "bogus". This just makes me think he's been running a scam for a while, and covering his google search trail. And he can't pay $750 worth of legal fees, but he's willing to give you over 100k in money.

Or it could be legit. But I don't buy it.

[directorik]

Originally Posted by NIGHTFLYER

But this is not him pulling the strings; but there small fee of $750 this is for legalites and due dilligence and such. It would be immediately returned upon completion of the actual funding so look it as a short term loan.

What if the funding does not come through? Do you lose the $750?
What percentage above the loan is returned to you when the project
is fully funded?

Originally Posted by NIGHTFLYER

If it was up to him he wouldn't charge the fee but like I said this isn't in his control.

Is is up to him. If he knows the money will be returned he can cover
the loan/fee and charge 15%. He chooses to get the filmmaker to
pay the fee.

Originally Posted by NIGHTFLYER

After all the bumps and dead ends I've encountered for the past few years. For some reason this come across my path for a reason. I learned from my deceased grandmothers wisdom. Opportunties can come at you from the most of unexpected of places never close doors.

Your grandmother was correct and very wise.

From what you say here this does not seem like an opportunity - it
appears to be a business transaction with you taking all the risks. I am
NOT saying this is anything underhanded - it might be an excellent
business and this guy is most likely a fine business man with good
intentions. Anyone who charges the client (you) a fee for legalities and
due diligence is taking a chance with your money - not theirs. Imagine
if he got 100 people to pay this fee and then found financing for 5
projects. That's a profit of $71,250.

My advice it to make sure this "loan" is fully refundable if they cannot
finance your project. Make sure you get at least 10% (I would ask for
20%) interest on the loan when the project is funded. If they will not
return your "loan" then is is not a loan - it is a non-refundable fee.

I will repeat: I am NOT saying this is anything underhanded - it might
be an excellent business and this guy is most likely a fine business man
with good intentions.

[NIGHTFLYER]

Thanks everyone. You have made some interesting and valid points. And I have addressed this with him hopefully he will respond with some valid and legit responses to my questions and inquires.

[cameronchapman]

Originally Posted by NIGHTFLYER

Thanks everyone. You have made some interesting and valid points. And I have addressed this with him hopefully he will respond with some valid and legit responses to my questions and inquires.

Keep us posted on how it turns out. I hope it works out for you!

[Cracker Funk]

Sounds like a scam.

[GuerrillaAngel]

Originally Posted by Cracker Funk

Sounds like a scam.

Sounds like a scam?

It IS a scam!

[wheatgrinder]

Our OP is being used as a roper, unwittingly I believe..

[NIGHTFLYER]

Here his responses to some of the questions and inquires I posed to him.

MY QUESTION: Are these funds from a finance company.


HIS RESPONSE: I invest my own funds


MY QUESTION: why do they need $750.00 fee.

HIS RESPONSE: The fee is for Background investigations, verifications and validations. These tasks are performed by an independent third party and that is the cost he charges me.


MY QUESTION: Is this a loan or an actual investment?


HIS RESPONSE: It could be either or a combination of both.




MY QUESTION: Is the fee refundable if the funding is not accomplished.


HIS REPONSE: YES

[zim9000]

I would not do it. I have been ripped before, not on anything video, but for something totally different. What you stated sounds almost exactly the same as far as executing the idea. Be prepared for your money to disappear and him never answering your phone calls again. But if your hard set on it, before changing money from hands, tell him to whip out his drivers license so you can write down his home address in case of an emergency and you need to contact him or some bs. If he says, I can just tell you, and refuses to show you it, leave. That's my two cents.

[DeJager]

I'd need to know the "third party" he's referring to. I'd also run for the hills.

[directorik]

Originally Posted by NIGHTFLYER

MY QUESTION: Is the fee refundable if the funding is not accomplished.

HIS REPONSE: YES

If you can get this in writing with a exact date the fee will be returned
this might be acceptable. Give them 90 days. He said "The funding
process takes between 3 weeks-1 month." so 3 months is plenty of time.

Even then this still makes no sense to me. It's money that must be
spent - if they find anything they don't like and chose not to fund your
movie they are out the $750 to the third party. Bad business - the reverse
of my previous example. Say he take the $750 from 20 filmmakers and
only finds 2 projects worth putting $300,000 into. He refunds $13,500
but he has spent $13,500. He is now 13k in the red with only 2 viable
projects.

This sound like terrible business on his part. Ask yourself why would he
pay a third party $750 and then refund that money to you if this third
party tells him you and your project are a poor risk. Where does he get
the $750 to return to you? From his pocket? If that's the case why does
he need your $750 at all? Why not just pay the third party from in own
funds in the first place? Why does he need YOUR money?

[NIGHTFLYER]

The fee is not to be MONEY GRAMED or anything else like that. They are be offically transfered to his bank account. He has been pretty straight foward so far but to ask him for personal info to me that's crossing the line almost an invasion of privacy. The fact that neither of us knows each other and he's willing to take a chance says a lot. You all have seen these scams in which they want Thousands of dollars upfront and such, and don't even have legit contact info. The best thing to do is what someone suggested put the fee in escrow.

[Cracker Funk]

Background-checks do not cost $750.