Alternative funding stratagies

[Nate North]

I originally posted this in another thread, but realized it was going off in another direction from the original post, and decided to post it as a new thread instead.

I'm trying a new type of crowd funding out.

I'm not asking for any money from the crowd. I'm out actively scouting talent, and offering good artists that have the ability to produce motion picture quality work in small amounts the opportunity to invest time instead of money, for a direct share of the project's net.

I'm using a strategic approach, that works like this. I get 20 artists together. I create a best of demo reel from 20 solid people. I use that reel, a web site, a business plan, and some charisma to gather up 1-200k in resources. The resources, which are in large part graphics production related, can then be used by all members of the team simultaneously, legally, as long as the final product using the licensed resources is published under the company name.

Another large chunk goes into the purchase of a rendering farm. This allows team members to produce final scenes at a rate and quality that would never be available financially to any one person.

The key in this plan is sharing. With 200k I can have a team of 20 guys, who are each working with 100k in production materials. I'm sure it doesn't all stack linear, but the concept is to produce something at 200k that wouldn't be possible for a million without the strategy. This setup also allows every member involved to take away portfolio reel that they never could have gotten otherwise, and an IMDB credit for a known film.

It's my opinion that like me, many filmmakers in the earlier days of their career are quite capable of producing several minutes on incredible footage a year. So in theory a small group of them that were organized into a structured project could probably provide solid production values to a feature film over a 12 month period.

Any thoughts on this alternate take on "crowd funding" or deferred payment? Other "outside the box" ideas on getting through that first difficult step of raising money, or help? Does anyone think that deferred payment has gotten such a bad rap that it can never be viable again?

 

[directorik]

This sounds like a “co-op” to me. Not new, but can be effective.

I have never done it with strangers, but I have done this with a
group of friends. We all went in on a 16mm Movieola flatbed and
suite rental. Many years later six of us got together and
purchased lighting and grip equipment. Any member can use the
equipment at anytime for free (we have a reservation system set
up) and the guy who stores it acts as the rental manager for non
members. He gets 40%, we split 50% among the other five and 10%
goes into the investment fund.

Seems like an interesting idea. I wouldn’t call it crowd funding
or even deferred payment. The way I understand it, you would use
the talents of 20 artists to raise money. I guess if you raise
donations then you could call it “crowd funding”. If you solicit
investors then it is a business.

As an “investor” I would have a lot of questions. Be prepared to
answer them in your business plan. Even with our little six person
co-op (all friends who often work on each others movies) managing
the “rental” time is quite a job. I shutter to think how to manage
20 people.

 

[Nate North]

I'm sure managing the business aspects will be a headache. Hopefully I can hire an accountant before that headache gets too large.

As far as orchestrating the work layout, it's hard in planning and easy in execution. This week I sent out 2 assignments to crew. Sent one guy a scene and said, map this. Send another guy a request, generate human newspaper reading animation. 5 minutes of emails= 2 weeks of work. So it will be effective if I can get it rolling full scale.

Thanks for the feedback, I'm struggling with exactly what to call this.

 

[directorik]

I’m unclear on how much you need to raise and how the money will
be used. I understand “Another large chunk” (100k?) will go for a
rendering farm that all 20 artists (and you) can use for their
projects. Does the other 100k go for?

The way you word it now it seems to me that you will use the
talent of 20 people to raise $200,000; 100k will go to your film,
100k will go to a rendering farm that the 20 artists can use for
their own projects. But none of them (or you) will put in any
money - only talent and time.

I'm struggling with exactly what to call this.

It seems to me you will be buying a rendering farm and renting it.
Kind of like what I have done with production equipment. What you
call it isn't that important.

I'd be interested in how you fund this. Will you use traditional "crowd
funding"? Donations. Or submit a business plan to investors looking
to make their money back?

 

[Nate North]

I’m unclear on how much you need to raise and how the money will
be used. I understand “Another large chunk” (100k?) will go for a
rendering farm that all 20 artists (and you) can use for their
projects. What does the other 100k go for?

I'm looking at this at 3 different possible levels, 1,2, and 3 hundred k.
in the case you mention where the budget becomes 200k, 75k would buy 2 RED cameras, 2 lens kits, stabilizers, etc. 25 would be reserved for a "worst case scenario" self publish to blu-ray, around 70k would be alloted to building the farm and powering it. (hand built, from dell this would be a 170k farm)
The power draw from a farm this size is comparable to turning on all the lights in a baseball stadium and leaving them on for a year. The remaining money will be used for transportation costs, the logistics of the interviews, multiple hard drive backups of all source footage, etc. I will not be taking any pay until everyone is.

But none of them (or you) will put in any
money - only talent and time.

I will be spending as much money of my own as I can afford. I may be able to contribute up to 20k to the project. I simply won't be asking anyone else to. I'll believe completely in my film and show that in the action of putting everything I've got into it, including my earnings this year. From others, all I need is time.

I'd be interested in how you fund this. Will you use traditional "crowd
funding"? Donations. Or submit a business plan to investors looking
to make their money back?

Submit a business plan to investors. 3 stages, I'm only discussing the first because that's all that is currently relevant.


quick edit- before everyone starts in about why I need 2 red cameras instead of 1, we're filming in 3d. Why, becuase I've never seen Jon, or NYC in 3d. Also CGI looks great in 3d and it's just a checkbox option on my deck.

also if anyone is checking out me reel and scratching their head, there is NO footage currently available from the Daily Movie project. We're like a week into pre.

 

[directorik]

Sounds like you have it all figured. Not sure how any of can help.
I know many people will question what you want to buy, but not me.
It’s your project. If you want to buy 10 cameras, I’m cool with
your choice.

So the 20 artists who donate their talent and time to help you get
funding get to use the cameras and render farm for no cost. Is
that correct?

And the investors get paid back from the profits of your movie and
a piece of all projects the 20 artists create. Is that correct?

 

[Nate North]

Sounds like you have it all figured. Not sure how any of can help.
I know many people will question what you want to buy, but not me.
It’s your project. If you want to buy 10 cameras, I’m cool with
your choice.

So the 20 artists who donate their talent and time to help you get
funding get to use the cameras and render farm for no cost. Is
that correct?

And the investors get paid back from the profits of your movie and
a piece of all projects the 20 artists create. Is that correct?

Maybe I just think I've got it all figured out. For all I know someone could post here and say, I tried this last year and got sued until I lost my house, or, "that's a great idea". I don't know really what response to expect.

All the artists will get to use the render farm quite a bit. However it's not for personal projects. The REDs will be used by the camera crew, and to create footage. While we won't be mailing the cameras around the country to people that don't have any scenes to film, much of the footage we shoot will be sent out to compositors and artists. I'm not setting this up as a group of friends so much as a serious competitive team. Those joining should understand that I'm trying to make the dream come true for everyone, and that means focusing resources on that goal, and not getting distracted by the logistics of swapping hours with people for their own use.

All that "no I in team" stuff aside, I will have no problem letting people use excess resources, and there are sure to be some. We will not need the cameras but for a few months for example, and there is always the option to resell them, and put that money back into the project (or the team if things are looking good so soon). This isn't a greed situation, its a focus situation.

As far as payment, it works like this. We are all co-owners of the project itself. If investors buy up 50% along the way we are all co-owners of percentages of the remaining 50%. Invesment would only be considered at a buy in valuation that inflated the price of each team members stock enough to more than compensate the lost shares. (so you now have 50 3 dollar shares instead of 100 1 dollar shares)

Upon completion of the project, we can sell the film outright, strike up a royalties deal, or self publish (in a nightmarish situation of dwindling hope)

Investors and artists will be paid back evenly and simultaniously, including myself as both. In the case of loss, the camera's would be sold and refunded into the return pool, and the farm would become available to all project members on a more open basis. (for artists, it generates it's used sale price every 2 weeks)

The target is to produce a more saleable film than "through a scanner darkly" and try to pull 15% of its 25 million dollar haul. Not impossible, right?

 

[superamazing]

I'm still trying to wrap my head around your plan. What are you going to be doing with 20 filmmaker's "time," and how does that turn into 200 thousand dollars?

I don't know enough about fundraising, business or Hollywood to make an educated evaluation, but I have a vague notion that it will be risky. Make sure everyone (including yourself) knows what they are getting themselves into.

However, I applaud your business-oriented approach, and I consider it a reminder of the broad range of skills necessary to be a filmmaker. As long as you are going this route, you might as well raise money to create a rental or production company. At least then you won't be gambling on the success of a single film.

By the way, you should call it a "Filmmaker's Cooperative."

 

[bird]

I don 't think you'd have a problem finding the "20 solid production people". I think your first big hurdle is, "I use that reel, a web site, a business plan, and some charisma to gather up 1-200k in resources"...where do you propose to drum up this kind of revenue? Since this would, essentially, be a cooperative film collective, how would you decide what feature project to pursue, or is this a collective constructed simply for your feature?


I guess my biggest issue, if I were to be part of a collective, is I'd want to amass all potential proposals and , as a group, figure out which is the best *bet* before I'd commit (meaning giving up my valuable time, energy, and dreams).

 

[directorik]

I think it’s an interesting idea. Like superamazing, I’m having a
difficult time wrapping my head around it. “making the dream come
true for everyone” just doesn’t spark my interest.

In a co-op, dealing with the logistics is the primary challenge.
Everyone who participated at the beginning is going to wonder how
often they get to use the equipment - from the cameras to the
render farm. I suspect each of the 20 artists will have a slightly
different dream.

But then again (and this is what I’m having difficulty fully
grasping) is seems like you are focusing on a specific project.
And it seem like that project is yours. Now I don’t mean to
suggest any personal agenda or any greed - only that you hope to
find 20 (or so) artists to donate time and talent and energy into
the initial demo (reel/web site/business plan) in order to fund
your project. I don’t quite understand that aspect other than they
will all be co-owners of the project. Which seems to be your
project.

Riffing off bird’s issue; MY biggest issue would be when do I get
to use the equipment and is MY project going to part of the
collective or considered a “personal” project so not part of the
agreement. My dream would be to use all this equipment to
make MY project at some point.

I’m thinking that if I join up and help 19 (or 7 or 9) other
artists put together a portfolio that raises the needed funding to
make Nate’s project, I want to know when Nate and the 19 (or 7 or
9) other artists will work on MY dream.

 

[Nate North]

In a co-op, dealing with the logistics is the primary challenge.
Everyone who participated at the beginning is going to wonder how
often they get to use the equipment - from the cameras to the
render farm. I suspect each of the 20 artists will have a slightly
different dream.

It doesn't work that way in this scenario. You turn in finished work, we cue it to the render farm. If you turn in the best cinematographer reel, you will be assigned the RED cameras under supervision of a core team member, and provided with both air and ground transport to locations. You don't ask if it's your turn. Average age here will be around 30. The extremely important difference between this project and many others is, we're not kidding around here. If someone on my crew that's making a film millions of people are supposed to see, that I'm working 12 hour days on, that could change the future of everyone involved if we did it right, says to me "I want to quit working on this for a month and film a D&D module in my back yard" I have to look at that and think, this person's head is not in the game. That is a selfish act, not what I'm doing.

But then again (and this is what I’m having difficulty fully
grasping) is seems like you are focusing on a specific project.
And it seem like that project is yours. Now I don’t mean to
suggest any personal agenda or any greed - only that you hope to
find 20 (or so) artists to donate time and talent and energy into
the initial demo (reel/web site/business plan) in order to fund
your project. I don’t quite understand that aspect other than they
will all be co-owners of the project. Which seems to be your
project.

I'm a capitalist. I do have a personal agenda, but it isn't greed. I did design this project, but I designed it with many people in mind. Many artists, many viewers. The film is a documentary about Television, Jon Stewart, and The Daily Show. The project is designed to be relevant, timely, and something that a lot of people would enjoy working on. I designed the film, but I did not design it for myself, I designed it for a collective. Something we could all enjoy, and something that because of it's built in fan base and celebrity interviews (you can list them as imdb credits you know) has a much higher marketability that what I commonly see pitched in terms of independent projects.

Riffing off bird’s issue; MY biggest issue would be when do I get
to use the equipment and is MY project going to part of the
collective or considered a “personal” project so not part of the
agreement. My dream would be to use all this equipment to
make MY project at some point.

Despite what I said above this is in no way out of the question. Cliff Blezinski took over as project lead at epic when he came up with gears of war. He pitched the idea, and they gave him the steering wheel. Good move.
So can you join up, suggest a better movie to me right now, and I'll just fold up the Daily Movie and do your thing. Maybe, depends on what it is. I hear a lot of good ideas, but no one seems to understand project and business logistics like I do. I'll be happy when I find another one.
Case in point. I watched Cracker's trailer for Antihero the other day, and he's got it all together. Solid filming techniques, GREAT story idea, excellent timing. I really think it's a good project, and If you didn't look at any outside factors, I'd say it has more potential to be a great film than mine.

So why is it that if Cracker joins up and says "make Antihero with this crazy CG, RED cameras and budget" I would say no? Because we don't have the pure muscle it takes to propel a new franchise into the mainstream. If I put Jon Stewart on a box cover (i'd want his permission for that, though I think it's legal without), or even just CG similar to the Daily show opening, it will stand out in a rental isle. There is a higher chance of netflix featuring it. We can interview Colbert and He'll gripe about it on his show. Some scenes in the film are designed to go viral (Boss Batte: Bill O Riley). There is the possibility of Viacom becoming interested in adopting the film. Investors can immediately understand what we're doing when we say Daily show documentary in 3d. They see the market.

I could go on, but what I'm saying is that there are a lot of tactical advantages here that go towards making a project that will actually succeed financially, and something that people would enjoy watching. We won't have the promotional budget to explain to all of America why they should like a new main character, so we're using one they already like.

I’m thinking that if I join up and help 19 (or 7 or 9) other
artists put together a portfolio that raises the needed funding to
make Nate’s project, I want to know when Nate and the 19 (or 7 or
9) other artists will work on MY dream.

Let's continue the example and talk collective project 2. Say Cracker comes back next project and this one has done well. We turned 200k and some work into 3 mil. Now I can go to any investor and say, we turned a profit while a guy you gave 10 mil flopped, we're next. And that's a pretty good selling point. So they say, 8 mil, what have you got. At that point, the team could physically gather, and discuss doing Antihero with a former a lister like Jim Carrey, and some great b-list like Lewis Black. Now we have a character the audience is familliar with, and the issue I mentioned before is gone. Robin Williams, One Hour Photo, 1 million dollar budget. But you've heard of it.

Contrary to the opinion here, I am not making Nate North "The Movie"

About making 200k out of the artists work. That's not correct, I raise the money seperately, using demo reels from the team to show investors that it's possible to execute what we promise. I'll be investing significant money and time myself (est 20k) and calling in personal favors I'll never get back. The responsiblity for that money will fall completely on me. No others will have cash or reputation at stake. Also I don't make that money, it is all spent to better the chances of the entire crew. I feel everyone will benefit more from one skyscraper than 20 huts.

 

[Nate North]

The 300

Sorry to double post, but I think I can help clarify this better when not directly answering questions.

This is similar to the strategy used in the movie "The 300" not in production but in the story itself.

The protagonists (in this metaphor our collective) are facing an army with more men, more money, and every other advantage you can think of. (Hollywood)

They realize that there is no way to win an all out war, so Leonidas thinks strategically and forces the battle into a specific spot where the army can only be attacked from one side.

(in the metaphor, this represents the documentary format, where we can deal with famous issues and people without paying out enormous sums for their likeness. We are protected by the walls of fair use from threats of lawsuits, and issues of source material)

The Spartans lock their shields together and form a wall, 10 times stronger than any man standing alone.

(in the metaphor, this is our team focusing all time, all resources together on one unified goal, and not arguing amongst ourselves)

What they won was freedom, for their people, and in this project a major goal is to give those that work on it education, experiences, resume items, confidence, and money to bring us all more, if not absolute freedom to make our own films.

 

[bird]

Your project is already in progress, you've got significant professional background with your own demo reel. I don't understand the logic of a *collective* demo reel to entice investors for your production. You've already got everything you need for a pitch: script (or outline in this case), experience, own demo reel. You can list all your technical talent and if your investor's want to see their reels, they'll ask for them...which would be unlikely considering they already expect you to have an exceptional crew lined up (according to the business plan you would have shown them). JMO

 

[Nate North]

Your project is already in progress, you've got significant professional background with your own demo reel. I don't understand the logic of a *collective* demo reel to entice investors for your production. You've already got everything you need for a pitch: script (or outline in this case), experience, own demo reel. You can list all your technical talent and if your investor's want to see their reels, they'll ask for them...which would be unlikely considering they already expect you to have an exceptional crew lined up (according to the business plan you would have shown them). JMO

Lol. That's a tough one to answer. I think a picture is worth a thousand words in this case. Unfortunate that I don't have that picture yet.

All in all, I think the strength of the project would come from the team working cooperatively, and I couldn't show that strength without the cooperation in place. When I have 4-5 guys working in tandem with me, I'll send up some reels of what that looks like. I'm not going to play back to back clips, I'm actually working with them to produce the reel. As in, I build a city, then Josh tracks it, Then Kevin animates it, then I composite and post it. Not each person creating different scenes.

 

[Cracker Funk]

Jim Carrey is a former A-lister?!!! He's on the short list of my favorite actors!

Thanks for the shout-out, Nate. I appreciate the kind words. Let's hope the entire movie lives up to it, once it finally sees a real audience (friends and family don't count).

This conversation isn't one that I could really contribute any intelligent insight to. I just don't know nothing about it, and really can't even speculate. I will say, however, that I sincerely would really like to see your movie made. I'm a HUGE fan of Jon Stewart and "The Daily Show". Did you see his interview with Rumsfeld? Here's a guy (Rumsfeld) that Stewart has made clear he does not agree with pretty much anything he's ever done. Rumsfeld is pretty much the anti-Stewart. And yet Stewart conducted a really fair interview. He didn't hold back any punches, but he was respectful, and let his interviewee respond to all questions. And on top of all that, he added humor to the conversation. He is the best. A true icon of our generation.

Okay, I'll get off my pulpit now. Anyway, however you gotta do it, get it done. Cheers.

 

[Nate North]

I'm a HUGE fan of Jon Stewart and "The Daily Show". Did you see his interview with Rumsfeld? Here's a guy (Rumsfeld) that Stewart has made clear he does not agree with pretty much anything he's ever done. Rumsfeld is pretty much the anti-Stewart. And yet Stewart conducted a really fair interview. He didn't hold back any punches, but he was respectful, and let his interviewee respond to all questions. And on top of all that, he added humor to the conversation. He is the best. A true icon of our generation.

Okay, I'll get off my pulpit now. Anyway, however you gotta do it, get it done. Cheers.

Same here. I think that Stewart has become something desperately needed in this era, a positive role model. I came across this bit of information in my research recently.

"In December 2010 Stewart was credited by the White House and other media and political news outlets for bringing awareness of the Republican filibuster on the James Zadroga 9/11 Health and Compensation Act to the public, leading to the ultimate passing of the bill which provides health benefits to first responders whose health has been adversely affected by their work at Ground Zero."

According to what I heard, some of those people were going to die pretty soon without help, becuase of the lung problems caused long term by the explosion dust. So here you have a comedian that has effectively saved the lives of others through his comedy show. I don't think I've ever heard of that happening before.

To me Jon's story and that of the Daily show is an incredible underdog tale, where intelligence and humor took them to heights that others couldn't achieve with all the money in the world.