Newbie Producer Needs Advice!

H

HalldoraEnt

Hey out there! So I'm new to the film producing game, and I'm gearing up for my first film. I've found myself asking a whole lot of questions and receiving a whole lot of answers, but they all seem to be at odds with each other. Then I discovered this fine forum. So, without further delay, I'd like to pose my more pressing question to you fine folks.

In order to start seeking investors for my film, what needs to come first? Do I need my Production Company to be an LLC, do I need the letter to the investors to be signed off on by an attorney? I've been told yes to both and no to both. Which is it?

Any advice would be greatly appreciated!
 
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Welcome to indietalk!

HalldoraEnt said:
Hey out there! So I'm new to the film producing game, and I'm gearing up for my first film. I've found myself asking a whole lot of questions and receiving a whole lot of answers, but they all seem to be at odds with each other.
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The reason is there isn't one answer for all producers. People
with actual experience will have different methods. People with
book/internet reading experience will mention the methods they
read.

HalldoraEnt said:
In order to start seeking investors for my film, what needs to come first? Do I need my Production Company to be an LLC, do I need the letter to the investors to be signed off on by an attorney? I've been told yes to both and no to both. Which is it?
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This is a prime example. The answer is the dreaded, "it depends".

An LLC afford specific protections to the individuals involved.
You need to learn all about the different LLC's and make a
decision based on your needs and your production. I'd say, in
general, forming an LLC is a good, legal method and that should
come first.

The word "investor" is loaded. Some people use that word differently
than others. When actual, accredited investors are being solicited
the SEC has specific rules than must be followed. When approaching
people known to you the laws are different. Sometimes when a
newer producer uses the word "investors" they mean "donations"
in the legal term so the laws are different.

You can see why you are getting different answers. Many producers
have put together financing and made a movie without ever forming
an LLC - it's logical they will offer advice based on that. Many producers
have formed an LLC and will naturally offer advice based on their
experience.

So depending on exactly what you are doing and how your specific
production is being put together, you will have options. Message boards
are great for opinions, advice and discussions - not so good for accurate
legal advice.

It's can't hurt to form an LLC. And you must either contact an attorney
or read up on the SEC regulations before soliciting investors. Using that
word in its legal sense.
 
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In short, you shouldn't use the word "investment" or "invest" unless you've your papers in order. Asking for "donations" is a good way to avoid legal paperwork. Don't say they're tax deductable though. They're not.

Disclaimer: I don't even play a lawyer on TV so go see Saul Goodman. :)
 
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Thanks for the responses! After reading your answers, I'm going to go the lawyer/LLC route, only because I don't see us garnering enough donations to cover our projected budget of $300k. I want to ensure that we do this the safe, legal way, and if it means a production delay then so be it. A delay is much better than an audit or worse!
 
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I just want to get this beast moving. The state I'm filming in is practically begging for us to shoot there, and their production resources are very cheap. I was hoping to use section 181 as my bait to secure some investor support before the end of the year, but this late start seems to have doomed me there. Oh well, better late than never as they say.
 
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Saul Goodman says that the reason each film project should have its own LLC is so a lawsuit filed against one project doesn't suck up the funds from your other film projects should you lose in court.

:)
 
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GuerrillaAngel said:
Saul Goodman says that the reason each film project should have its own LLC is so a lawsuit filed against one project doesn't suck up the funds from your other film projects should you lose in court.

:)
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That makes perfect sense. So I guess my question becomes do I need the LLC before I start soliciting investors or just have an attorney sign off on the letter to investors and be sure to have the LLC up before I start spending investor money?
 
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HalldoraEnt said:
That makes perfect sense. So I guess my question becomes do I need the LLC before I start soliciting investors or just have an attorney sign off on the letter to investors and be sure to have the LLC up before I start spending investor money?
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I *think* it's an all-at-the-same-time deal. You'd likely want a package deal from your attorney to keep that cost down.

Before you'll even have to worry about spending investor money, you'll need to sharpen your salesmanship skills. Basically, raising money will be like trying to sell a used rusty AMC Pacer ex-taxicab you found in a swamp. :lol:

There are a couple good books on the $$$ aspects of film producing that'll get you on your way quicker.

Good luck.
 
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