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Old 07-08-2005, 09:24 AM   #1
Thunderclap
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Business Plan

I'm gearing up to shoot a low-budget feature later this year and was wondering if investors are going to want to see a business plan for a project that will cost $15,000 - $25,000. It's not that I can't do the business plan it's just I don't like doing them.

Also, will investors want to have a contract with the investor return breakdown? If so, is there a generic modifiable contract on-line somewhere? I'd rather put together something myself and give it to my attorney rather than have him put it together and be charged extra.

Thanks!
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Old 07-08-2005, 11:16 AM   #2
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From my experience with investors and investing myself, I would require a business plan. Also, If I'm giving you $25,000 you better believe there will be a signed contract!

If you need contracts, release forms, and anything else... you must go to SonnyBoo.com That place is awesome, and Peter is a great person.

However, I do know some investors that have taken project plans instead of a business plan. You have to realize that an investor is looking for ROI. They will give you the money if they believe you and your plan and will get their ROI. I have never invested in something where ROI wasn't discussed at the beginning.

Basically, you want $25,000. You offer the investor say 17% return on investment (ROI). Then you explain HOW you will be able to pay back the $25,000 plus the 17%. If they believe you then you get the money, if not you probably wont. You HAVE to have a marketing plan in your project plan or business plan. Without that, how will you make money?
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Old 07-08-2005, 11:35 AM   #3
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Quote:
Originally Posted by CootDog
Basically, you want $25,000. You offer the investor say 17% return on investment (ROI). Then you explain HOW you will be able to pay back the $25,000 plus the 17%. If they believe you then you get the money, if not you probably wont. You HAVE to have a marketing plan in your project plan or business plan. Without that, how will you make money?
Well, we're not looking for the full $25,000 as we've raised through family, friends and personal investments about $7,000. And the way I've written previous business plans in the past is the investor makes 200% of the initial return (double their money) before it's split on an agreed amount. But these have been plans for larger budgeted films... I wasn't sure if the same technique was used for smaller budgeted films.

Thanks for the information.
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Old 07-08-2005, 11:56 AM   #4
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As soon as you step out of the realm of family and friends who (for the most part) are investing because they believe in you, your pitch will change.

I would say you need a good plan for the $18,000 you still need to raise. Personally I think a 200% guarantee is high - but very attractive to the investor.

Since you have experience raising money for larger budget films I bet you could tell us a thing or two. What were the budgets you've raised in the past? Did your investors get their 200%? If so that's going to be a HUGE advantage to your current project.
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Old 07-08-2005, 12:08 PM   #5
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Quote:
Originally Posted by directorik
As soon as you step out of the realm of family and friends who (for the most part) are investing because they believe in you, your pitch will change.
Most definitely. You have to convince them it can be done.

Quote:
Since you have experience raising money for larger budget films I bet you could tell us a thing or two. What were the budgets you've raised in the past? Did your investors get their 200%? If so that's going to be a HUGE advantage to your current project.
I should rephrase my previous message. I've TRIED raising money for larger projects but the problem is that the investors didn't see a viable turnaround for an exclusive web series. They liked the script, the liked the return, but the felt a first time feature and it being available on the web was too big a gamble.

Of course, now Daniel Myrick is doing the exact same thing with "The Strand" proving once again it's always marketable so long as there is a recognizable name. *sigh*

As for the budget we tried to raise $500,000. We started trying to get the money back in 2001 and finally gave up last year and returned the investors money in full. We decided for a first time feature a lower budget project would be more likely to happen.
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Old 07-08-2005, 12:46 PM   #6
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Speaking of which, if anyone is interested in viewing the teaser trailer we cut you can do so at http://www.rpmfilms.com/movies/Dead_Water_Teaser.mp4

Quicktime 6 or higher is required.
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Old 07-08-2005, 02:41 PM   #7
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Quote:
Originally Posted by Thunderclap
Well, we're not looking for the full $25,000 as we've raised through family, friends and personal investments about $7,000. And the way I've written previous business plans in the past is the investor makes 200% of the initial return (double their money) before it's split on an agreed amount. But these have been plans for larger budgeted films... I wasn't sure if the same technique was used for smaller budgeted films.

Thanks for the information.
200%!!! Yes it looks good, but I've NEVER seen anything like it. If someone gave me something like that, I would either a)just toss it because it's TOO GOOD TO BE TRUE, or b)have a look and make sure they have One Hell of a marketing plan and probably some attached names.

Just my thoughts...

I would offer 20% and a 20% share in profits or something.. not put 200%... It's a big number and seems untrue...

For me, if someone invests in something of mine, then I'll pay them the required % but will definately give them a bonus if it all went very well
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