Recent Biz Plan...
- Thread starter Jamster
- Start date
Don't even need a business plan for passive investors. In fact showing them a business plan may violate federal securities laws.
Went to an excellent seminar this weekend with an entertainment attorney.
difference between active and passive investors, business plan vs PPM, securities laws, corporations, limited partnerships, LLCs, it's a REALLY complicated topic.
Just saw you are in the UK, so have no idea what the laws are there.
Went to an excellent seminar this weekend with an entertainment attorney.
difference between active and passive investors, business plan vs PPM, securities laws, corporations, limited partnerships, LLCs, it's a REALLY complicated topic.
Just saw you are in the UK, so have no idea what the laws are there.
I take it by 'passive' you mean, friends, friends of friends etc.
That's where I'm starting off and have a rough plan BUT need some comparison movie info - checking out The Numbes; BO mojo etc. But a lot of stuff is 'concealed' unless you cough up.
I was hoping that someone would do me a favour and throw some of said info my way by pm.
But it's looking like I'll have to cough up some cash - tks for your responses anyhow guys - cheers, Jim.
That's where I'm starting off and have a rough plan BUT need some comparison movie info - checking out The Numbes; BO mojo etc. But a lot of stuff is 'concealed' unless you cough up.
I was hoping that someone would do me a favour and throw some of said info my way by pm.
But it's looking like I'll have to cough up some cash - tks for your responses anyhow guys - cheers, Jim.
"Passive" means they have no input into the production. "Active" means they are an active participant in decision making. Again, I am not an attorney, and have even less of a grasp on laws in the UK than I do laws in the US.
In the US, if you show someone a business plan and ask them to invest money (and they do) without making them an active (input into decisions) participant in the business, then you have just sold them a "security" (like a share of stock). If you do that without complying with myriad securities laws at both the state and federal level you have just comitted a crime potentially punishable by prison. Small time (few tens of thousands of dollars) they will probably just issue a cease and desist order, but fire is being played with big time.
Again, I know ZERO about UK laws, so before you take money from anybody other than a family member I'd consult a UK attorney.
I just learned a lot of this stuff myself. The lesson is, except for taking some money from your family in the form of a gift or loan you MUST hire an attorney who knows entertainment financing law. Taking ANYTHING from investors (where you offer them a a potential return) without having a good attorney is asking for a future that involves a cellmate.
In the US, if you show someone a business plan and ask them to invest money (and they do) without making them an active (input into decisions) participant in the business, then you have just sold them a "security" (like a share of stock). If you do that without complying with myriad securities laws at both the state and federal level you have just comitted a crime potentially punishable by prison. Small time (few tens of thousands of dollars) they will probably just issue a cease and desist order, but fire is being played with big time.
Again, I know ZERO about UK laws, so before you take money from anybody other than a family member I'd consult a UK attorney.
I just learned a lot of this stuff myself. The lesson is, except for taking some money from your family in the form of a gift or loan you MUST hire an attorney who knows entertainment financing law. Taking ANYTHING from investors (where you offer them a a potential return) without having a good attorney is asking for a future that involves a cellmate.
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Good plan.
People can give you money, it's when you promise to give them money back that things get legally complicated.
People can give you money, it's when you promise to give them money back that things get legally complicated.
The lesson there is never take money from anyone you wouldn't make a partner.
There is nothing wrong with "passive" investors, and I'd much prefer to have them, BUT you just have to use an experienced attorney, period, if you raising any significant amount of money. All the documents have to be just so to comply with securities laws.
And really, anything over $1,000, even amongst friends, should have paperwork involved. It's not worth the money to get a lawyer unless your film is over $10,000, and usually in that case one person has put up the money, and typically they're helping to make the film so they are actively involved.
However, if that's not the case, I recommend a lawyer. In Los Angeles, most entertainment lawyers will have standard forms, they'll let you pay them for 2 hours (at $150 an hour of course) just to make up your documents for you, and then as long as you have an accountant you trust, you'll be fine.
The horror stories (I know, I've been party to one) come about when everyone is just throwing money around and trusting everyone else that's their "friend". When it comes down to the money in the end, no one is friends.
If you ever take money from a stranger, any amount, or make a deal with people, you're absolutely insane not to pay a lawyer. It's always the best money spent. Even for boilerplate documents.
We're currently trying to raise close to $1 million, so I know what you mean. The business side gets tricky, reputable legal and financial representation is imperative, but it's one of those things that no indy producer wants to spend any money on. Do it. Or end up with 1/5 of a film that you own. Ha ha. Lucky for us, our film could be combined into another idea easily. Others weren't as lucky.