Finding Funding for Your Project-guest post from Jason’s Music Publishing
What is your project?
Financiers have to know what your project is. Music? Film? Literary? Visual Art? Theatrical? Business launch? Product development? Finding a niche for your product makes people feel comfortable. The fear they have about investing is alleviated somewhat by having something familiar to hang their hat on. A vague pitch about a new concept, product or idea puts people ill at ease. Have your project spelled out to the letter. Know what you are going to do before you approach anyone. Don’t try to “wing it”.
Is all of your paperwork in place?
Do you have the necessary copyright and publishing agreements in place? Is your screenplay registered? Do you have agreements with your service and equipment providers? Are you employing anyone? Do you have a business license? Trying to sell your project without paperwork in place is like trying to sell a car without a title.
Are you making a film? What kind of film? What is it about? Who is in it? Who wrote it? Who is directing, producing, editing, scoring, etc.? Investors want to know what it is they are getting for their $$$$$. Having a half formed story or concept or idea will drive people away. You should be able to answer any question that comes up about your project. If you don’t know the answer to something, be honest about it, don’t try to fake your way through the question. Venture capitalists make their living risking their money on projects that that they believe will pay dividends. Ferreting out con men and those people without a clue is just part of their skill set.
Draft a budget.
You should know to the penny what it will cost to produce your project, and you should know what it will cost five years from now. (These types or projects take time.) Calculate the studio time including pre-production, hiring musicians or film technicians, actors, craft services, extras, editing, distribution, marketing, recording, mixing, mastering, conceptual design, producing the artwork and packaging, distribution and sales for a CD, for instance. Never tell anyone “We think it ought to cost about….” When you know the actual cost, that’s when you pitch the investor. If you can’t do it yourself, hire an accountant to put together a budget for you. Accountants know which questions to ask and quite often can find savings for you or point out expenses that you may not have foreseen.
Set a timetable.
How long is this going to take? Have you tentatively scheduled the project to begin and end on specific dates? If you are producing a film, you should have a shooting schedule. A, record project should have rehearsal, recording, mixing, mastering, release and distribution sales. A novel should have a deadline for completion, editing, artwork and distribution. Artwork, theatrical productions, product development and everything else should have specific deadlines.
See the unforeseen.
Every project has delays, from service providers backing out due to problems with distribution and even frivolous lawsuits. Know that your project is going to experience one or all of these problems and try to anticipate what would happen if things fell completely apart.
Who’s in charge?
Investors want to work with one person, not a disorganized gang. If you are a group working on a project together, choose one or two people that can speak for the group and make decisions and memorialize those choices in a legal document.
What is the return?
How much money is this project/product expected to make? You don’t have to tell investors what their percentage is. They will usually make an offer based on the money generated by the project. If you believe that your film has a chance of making a lot of money, they may take a small percentage after costs. If it’s just a “feel good” project for a charitable program, they may fund the entire project as a philanthropic enterprise, but this is rare. Know your when the project reaches the break-even point in sales. (Hint: It’s not just when you have recovered you costs. It is usually three times that.) Know when the project should expect to make a profit.
What are you investing?
Begging for dollars has become very popular with the advent of Kickstarter, Indiegogo, GoFundMe, etc. Most of the people who invest through these sites are five and ten dollar investors who never see a return on their dollar, not even the promised completed CD or book. They do it for the feel good aspect, but once burned, they never fund anyone again. You should try to match dollar for dollar any money you ask investors for. Get a second job, get a loan, sell or mortgage some property, put your disposable income into a savings account. If I am an investor, I want to know that you believe in your project as much as you want me to believe in it. Film maker Michael Moore held bowling nights once a week for over a year to raise money for his first film. He borrowed from family, friends, businesses, maxed out his credit cards and even sold his car to make budget. It was true guerilla film making. We all should have that kind of dedication.