How much % of your movie should investors get?

[RealJasonBourne]

I found this contest for film makers in Canada, where if you win they give you a $1,000,000 budget and guaranteed to be released in theaters. You have to give them a 2 minute trailer of a movie that you want to make. If you make it in the top 10, you have to sign them 50/50 profits on everything your movie makes, after they get back the $1,000,000 budget that they gave you. Do you think this is too much or is it fair? Good ideas are hard to come by these days, do you think its worth it, or is it better to go another route like indiegogo or kickstarter and try to keep most shares on your movie?

If your team advances to the Top 10 you will be presented with an option agreement for your script that is negotiable. CineCoup will offer the Top 10 Teams a renewable 1-year option on their script for $2500 (CDN). The Top 10 teams will elect a single legal representative that will negotiate the details of the option on all of their behalf with CineCoup. If you choose to accept and execute this agreement, it will describe what rights are optioned and on what terms teams will participate financially and creatively in the production and exploitation of the project. It is anticipated that filmmakers will be entitled to a favourable 50/50 net revenue split after CineCoup recoups its original investment and costs.
Who controls the rights of the Top Project?
For the top project selected for financing and production by CineCoup, there will be a negotiated long-form contract that will address worldwide rights, fees for the filmmakers and a favourable 50/50 net-revenue split after CineCoup has recouped original investment and costs.

 

[Modern Day Myth Prod. LLC]

If you get to that level, take the deal.

Do you know how difficult it is to get someone to invest $1,000,000 in an independent film?

Is there anyway you can get name talent in the trailer?

That would.significantly improve your chances.

 

[RealJasonBourne]

actually yeah, its probably better to make it by giving up half your shares than to get greedy and end up not making it at all. I dont think I could get a big name in it, unless I made a good trailer showed it to them, and then reshoot it

 

[directorik]

I found this contest for film makers in Canada, where if you win they give you a $1,000,000 budget and guaranteed to be released in theaters. You have to give them a 2 minute trailer of a movie that you want to make. If you make it in the top 10, you have to sign them 50/50 profits on everything your movie makes, after they get back the $1,000,000 budget that they gave you. Do you think this is too much or is it fair? Good ideas are hard to come by these days, do you think its worth it, or is it better to go another route like indiegogo or kickstarter and try to keep most shares on your movie?

You have to be realistic. If you raise $1,000,000 on indiegogo or kickstarter and
release the movie yourself you get to keep 100%. If you use a distributor they
will take a percentage. If someone else puts up the money to make your film,
they deserve something, don't they?

If you feel you can raise enough money to make the movie and keep most of
the profits, then that might be the better way to go. What are your realistic
chances of raising $1,000,000 from donations? What are your realistic chances
of raising $500,000? Or even $50,000?

It doesn't matter if it's fair - this is the offer. If you (or any filmmaker) doesn't
like the 50/50 split you (or any filmmaker) do not need to enter this contest.
Personally, if I found an investor to give me $1,000,000 to make my movie and
guarantee a theatrical release I'd take it. I'd get paid for the script and for directing
and have a movie in the theaters. Even if I didn't see any more money that, to
me, is pretty good. Even if it makes $500,000,000 I can get another job because I
just wrote and directed a movie for $1,000,000 that made $500,000,000.

Of course if it makes $500,000,000 you will get $250,000,000 in this deal. That
seems pretty good to me. Doesn't it seem fair to you?

 

[RealJasonBourne]

You have to be realistic. If you raise $1,000,000 on indiegogo or kickstarter and
release the movie yourself you get to keep 100%. If you use a distributor they
will take a percentage. If someone else puts up the money to make your film,
they deserve something, don't they?

If you feel you can raise enough money to make the movie and keep most of
the profits, then that might be the better way to go. What are your realistic
chances of raising $1,000,000 from donations? What are your realistic chances
of raising $500,000? Or even $50,000?

It doesn't matter if it's fair - this is the offer. If you (or any filmmaker) doesn't
like the 50/50 split you (or any filmmaker) do not need to enter this contest.
Personally, if I found an investor to give me $1,000,000 to make my movie and
guarantee a theatrical release I'd take it. I'd get paid for the script and for directing
and have a movie in the theaters. Even if I didn't see any more money that, to
me, is pretty good. Even if it makes $500,000,000 I can get another job because I
just wrote and directed a movie for $1,000,000 that made $500,000,000.

Of course if it makes $500,000,000 you will get $250,000,000 in this deal. That
seems pretty good to me. Doesn't it seem fair to you?

yeah now I have it inscribed into my brain, my original post was crazy talk
$250,000,000? NOW THATS WHAT IM TALKING ABOUT!

 

[MileCreations]

Now you just have to make that trailer to impress those judges

 

[Sweetie]

If you make it in the top 10, you have to sign them 50/50 profits on everything your movie makes, after they get back the $1,000,000 budget that they gave you. Do you think this is too much or is it fair? Good ideas are hard to come by these days, do you think its worth it?

Would this be your first feature film?

Lets put it this way. You're getting the same deal as you'd get from a traditional investor (if not way better) with GUARANTEED THEATRICAL RELEASE. You know what, some of that $1mil will probably go to paying your wages while you're making it. So you're going to get paid and get to keep 50% of the profits after expenses without risking any of your own money. If they offered you 10% of the profits, I'd still say take it. The chances of you making ANY profits are near zero.

Don't fool yourself. Ideas are a dime a dozen. It's your execution that sets you apart from the rest.

I suggest that you watch all 3 seasons of Project Greenlight (well there's really 4 seasons, but I have been unsuccessful to find the Australia version). It sounds a lot like what the competition you're describing. It might help get you a little more ready to see what to expect and how previous people were chosen and some of the pitfalls of these competitions.

Also, just be aware, a theatrical release can be as few as in 3 cinemas. Don't expect wide distribution unless you create something really special.

Knock them dead!

Edit: To answer the title to this thread. A typical investor deal is 50% for full funding.

 

[directorik]

Here in the States I have never seen a deal that offers a 50/50 split
to a first time filmmaker. Quite atypical in my experiences. What I
have seen is 100% until payoff plus 20% then a 70/30 split until a
specified number is reached then a 60/40 for the life of the project.

Of course a filmmaker with a track record of making profits for investors
can get a better deal and a well known filmmaker with a well known
cast can get an even better deal.

Let’s get realistic again; your film will not make that kind of money.
Let’s say you get $80,000 as writer and director and then the movie
makes a profit of only $750,000. Are you okay getting $375,000? Or
do you feel that isn’t a fair split? The investor gets their money back
and $375,000 and you get a total of $455,000.

I agree with Sweetie - even a 10% deal would be a good one. And
they are offering 50%.

 

[Dreadylocks]

Actually 50/50 sounds like a great split to me. What I don't like about the terms is the $150 early-bird 'administration' fee. That's twice as much as most major film festivals.

I suppose though if you really believed in your concept it could be a worthwhile investment. If I had $150 to spare I actually would sign up.

 

[Dreadylocks]

Wait a sec, I'm reading on here. This deal is far from too-good-to-be-true:

Finalist Slate: What happens at the end?
8 WEEKS / Sunday April 28 - Sunday, June 23, 2013

Top 10 projects are optioned for development
Top 10 projects run crowdfunding campaigns to supplement budgets
Industry jury evaluates Top 5 project packages and team performances
One project is selected for up to $1 million (CDN) in production financing and guaranteed release in Cineplex theatres

Bold is mine.

First, you have to do all kinds of social marketing to get your project voted into the top 100, 50, 15, and 10. Ten are optioned for one year (renewable) for $2500ca. Nothing wrong with that, they want to see if your idea would have an audience. But then, after establishing your fan base/audience (with some hand-holding in the form of marketing 'workshops') you have to tap them for crowdfunding...
So is this crowdfunding to be on top of the million dollar budget they give you or is that how you're supposed to get the million dollar budget in the first place?

Seems to me if you're going to do all that work, why not just do everything yourself?

 

[Sweetie]

Investors are a fickle bunch. You'll usually find investors fall into one of three categories.

1). Those who will push the best deal for them at your expense.
2). Those who understand there are risks in investing, who look for talented people who have a top notch management team with a plan viable plan, contingencies and risk mitigation.
3). Investors who don't really have a clue.

When you're a first time filmmaker, you're rarely going to get access to any investors. If you do, you're often dealing with #3. Sometimes they understand something about investing, but don't often bring things to the table themselves. Their motives aren't always about money.

#1 Aren't exactly evil, but they'll squeeze you to get the best deal for them. If they think they can get you to put your time up for free and work for 5% on the back end after getting every advantage, preferably before anyone else gets a dime.

Who you really want to deal with is #2, especially an investor who can bring something you need to the table (like distribution, access to key talent etc). These investors understand that very talented people with great crews who have a track record of earning a profit are hard to come across. They understand that you need to give a fair deal to develop a long term relationship that works for both parties. They may lose some profits in the short term, but if the investor is fair to you, who are you going to go to each time? See, a win, win situation. Of course, you have to be the right fit for them too and they tend to do their due diligence.

In filmmaking, once you develop a track record, you'll end up not needing a lot of investors, it'll come down to a lot of dealmaking. You'll typically use a combination of attaching the right talent with value, pre-sales, tax credits, and bank gap financing to make up the majority of a budget. The rest you'll usually get from investors (if necessary). It's a little simplified for what really happens, but it's close enough.