• ✅ Technical and creative solutions for your film.
    ✅ Screenplay formatting help, plot and story guidance.
    ✅ A respectful community of professionals and newbies.
    ✅ Network with composers, editors, cast, crew, and more!
    🎬 IndieTalk - Filmmaking and Screenwriting help site and community.
    By filmmakers, for filmmakers since 2003

First Right of Refusal Agreement - Investor Question

G

Grandview Productions

I have a private equity investor who is interested in putting the final funding on a feature.

They are looking to put 100k into a 250k budget.

As a caveat they are requesting a first right of refusal clause for any future projects for equal or greater investments.

Does anyone have any experience with this?

I feel like this is a positive thing but want to make sure that I am not over looking any potential pitfalls.

Any ideas or suggestions would be appreciated.

Thanks!
 
Sort by date Sort by votes
They just want to see your next "thing" first. But I would want a time limit from time of submittal to a yes or no answer. My amateur opinion.

Consult legal council.:)
 
Upvote 0 Downvote
There's no way in which first right of refusal could end badly for you. You show them your next project, they either give you money for it, or they say thanks for showing this to us, but we don't want it. Either way, you haven't lost anything. Sounds kind of extreme for it to apply to ALL of your future projects, though.

P.S. Congrats on getting the funding. You shall expect to eventually be getting a PM from me, asking you how you do it. :)
 
Upvote 0 Downvote
Beware of the fine print, though. (which is why you need a lawyer)

There could be a clause giving them an inordinate amount of time to make a decision to refuse it and thus release the rights back to you. Meanwhile, your masterpiece sits gathering cobwebs.

Make sure the time-frame they have to make a decision is clearly defined, and that it's reasonable.
 
Last edited:
Upvote 0 Downvote
Cracker Funk said:
There's no way in which first right of refusal could end badly for you. You show them your next project, they either give you money for it, or they say thanks for showing this to us, but we don't want it. Either way, you haven't lost anything. Sounds kind of extreme for it to apply to ALL of your future projects, though.

P.S. Congrats on getting the funding. You shall expect to eventually be getting a PM from me, asking you how you do it. :)
Click to expand...

I feel the same way, my one hesitation was if we did not like the way they acted or treated the production. Then we would be forced to deal with them in the future.

I also would be happy to answer any questions on how we raised the money.

Thanks!
 
Upvote 0 Downvote
Grandview Productions said:
I feel the same way, my one hesitation was if we did not like the way they acted or treated the production. Then we would be forced to deal with them in the future.

I also would be happy to answer any questions on how we raised the money.

Thanks!
Click to expand...

This is a real potential downside. I've got a first refusal clause in my publishing contract and now that I've been through publishing with a big corporate publisher, I kind of wish it wasn't in there. It's not something I'd be eager to do again, unless the money was really good. But it means that I have to send any future non-fiction work their way before I can either self-publish it or send it to any other publisher.

One thing I'd make sure of is that the first refusal clause is only for your next project, and not for all future work. That way, even if you don't have a great experience with them, you're only legally obligated to send them one more project, and not every project thereafter. From the sound of it now, they want first refusal for *every* project. No way would I go for that. Alternatively, it could have a time-limit, like a couple of years or something.
 
Upvote 0 Downvote
I guess we have very different needs. So I understand your
hesitation. Someone wants to finance my movies I take their
money. The way they act or treat the production is irrelevant
to me. I can deal with anyone. Money is difficult to get.

So what happens to the financing if you refuse this part of the
agreement and they back out?
 
Upvote 0 Downvote
That's a LOT of money you're dealing with. I'd definitely have a lawyer review the contract.
Personally I'd be happy to get any money. If they want first refusal then fine. Give me the money.
 
Upvote 0 Downvote
Dude are you fricken' kidding!

$100K - 40% OF YOUR BUDGET - and they want a 'first right of refusual' on your future projects...

Why the hey not!

You can still turn down their money - you just gotta go to them first.

Besides WHY wouldn't you want to reward someone who put their money where their mouths are when you really needed it!

Geez, to HAVE such a problem...

TAKE. THE. MONEY!
 
Upvote 0 Downvote
It's called positive reinforcement... ;) reward them for investing that much money so it increases the likelihood they will do it again in the future!

But I'd still get legal advice from a worthy attorney.
 
Upvote 0 Downvote
You must log in or register to reply here.
Back
Top