Category Archives: Classes/Books

Film Financing From a VC’s Perspective

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Last Saturday I was back in San Francisco for a one-day workshop.  This workshop was taught by veteran venture capitalist (VC) Frank Green, Ph.D, and sponsored by the Institute for International Film Financing (IIFF).  IIFF is the same organization that put on the workshop that I attended last month featuring IFP founder Sandra Schulberg.  It’s a forward-thinking organization that offers good opportunities for education, networking, and financing for filmmakers.  I’ve been attending so many of their meetings lately that I decided to go ahead and become a member.

After getting a producer’s take on film financing last month, it was nice to get a venture capitalist’s viewpoint this time.  The workshop was called the One-Day MBA Leadership Workshop for Film Entrepreneurs.  A great deal of the day was spent on leadership skills where we learned the VRE Leadership Execution Strategy.  I’m not going to go into detail about this but, basically, we learned how a leader must have a vision (V) for their project, cultivate relationships (R) to be able to work as a team, and be able to execute (E) a plan to get the desired results.  One of the things that really impressed me was his emphasis on working with people of different personality types and temperments.  This is not the kind of information I was expecting in this workshop but, as you will read later, it makes perfect sense why this would be important to a VC.

Interestingly, he didn’t cover subjects such as what a VC looks for in a business plan or how to find VC money.  I guess he figures that you should know how to get that information.  However, he did offer a couple of valuable tips: 

  • When pitching to a VC you better know what your vision and strategic goals are.  He said that 90% of the people looking for capital don’t have a vision or any strategic goals and many don’t have a clue as to what those are.  So you better do your homework. 
  • One of his favorite tactics is to interrupt a presentation early on and ask a question about something that is covered later on in your presentation.  He does this to see how you’ll react.  Will you accomodate his request right away and be professional about it?  Or will you get all huffy and insist that he wait until you get to that part of the presentation?  If it’s the latter, you can forget about getting any funding from him.  You just failed his test.  See (and this goes back to his emphasis on working with people), he wants to find out how easy it will be to work with you.  He also wants to know if you crumble easily under pressure.  If you can’t handle this simple request, how can he have confidence that you will be able to handle the pressures of producing a film?  Okay, this I understand perfectly, because I admit that I sometimes do it myself.  Without being rude, I’ll throw something unexpected at someone and see how they react.  This is a great way to judge if I’m going to be able to have a working relationship with that person.

Later that afternoon, the entire class split up into teams of four.  There were five teams total.  Our assignment was to develop a project strategy for one of several films:  a big-budget action packed thriller, a medium-sized-budget documentary, or a small-budget comedy.  We then had to give a 10-minute presentation in front of the class with each team member giving part of the presentation.  The other teams acted as judges and venture investors and had to decide how much of a $100 bill (for each project) they wanted to invest.  My team chose to do a small-budget comedy.  Everyone else chose documentaries.

I’m a bit biased, but I think my team totally rocked.  We had a producer, an entertainment attorney, a venture capitalist, and myself on my team.  I came up with a fun storyline that we tweaked.  By the time we had all the pieces put together, we had what would actually be a great little project if it were real.  Oh, by the way, we won the contest.

Thursday, I got a call from the chairman of IIFF who also runs a sister organization called Film Angels.  They are just what their name implies…a group of world-class Silicon Valley VCs who invest in films.  He congratulated me on my team’s win and, even though he knows my project is still in the early stages, he invited me to pitch at one of their meetings when the project is ready.  I’m encouraged that he thinks enough of my project, even at this early stage, to extend the invitation.  Major Hollywood players pitch to this group, so I better have a strong project to present to them if I hope to compete.  It’s not a guarantee of funding, of course, but it is a wonderful opportunity.

Attention Bay Area Screenwriters

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I’ve been reading William Martell’s daily script tips for quite some time now and always find them very worthwhile.  I really would like to take one of his screenwriting classes. But in order to get him to come to the Bay Area to give one of his classes, a minimum of 20 people is needed.  So I thought I’d ask around and see if there are any local screenwriters, aspiring screenwriters, or anyone else interested in screenwriting that might be interested in attending.

If you’re not familiar with William Martell, you can check out his bio at http://www.scriptsecrets.net/products/authorbi.htm.  The class he teaches is a two-day class called Character First.  You can check out the content at http://www.scriptsecrets.net/lecture/secretc2.htm.  The price is $199.

If you’re interested, please contact Mr. Martell via his website or myself and I’ll pass the info on to him.  I’m hoping that there will be enough interest to make this happen.

A Day Immersed in Film Financing

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Last Saturday, I ventured across the Bay Bridge again to attend a film financing workshop featuring IFP (Independent Feature Project) founder Sandra Schulberg.  Sandra has a very impressive resume that her IMDb profile barely touches upon and that includes expertise in international financing and co-production.  Getting to spend an entire day listening to her was an incredible learning experience.  Some of what she covered I’ve heard before, but I always count a class or workshop worthwhile if I come out of it having learned something new.  By those standards, this workshop was an unmitigated success.  I almost never put my pen down the entire day.  It was eight hours jammed packed with information…too much to try to summarize in one post, so I’ll just hit on some highlights.

Grants

Do you think that grant money is only available for documentaries?  Think again.  If your feature film contains subject matter that is relevant to a cause or issue (e.g., the environment, social issues, etc.) that a grantor is interested in supporting, your project may be able to get funding from grants.

Depending on your budget, grants may not cover all the costs of producing your film, but here’s a little known fact:  You can mix PPM (Private Placement Memorandum) money and grant money.  Sandra called projects that mix funding from these two sources hybrids.  Of course, the paperwork gets more complicated when you go this route, but it is quite doable.

Some grants are more like a loan.  They are called Program Related Investments (PRI).  This is a grant that the grantor wants back.  Some may charge interest.

Private Placement Memorandums (PPM)

PPMs, also known as offering memorandums, are legal documents that state the objectives, risks, and terms of an investment.  Here’s what must be included in an offering memorandum:

  • Story synopsis.
  • Chain of title–The script rights must be assigned to the LLC.
  • Bios of key people.
  • Talent agreements.
  • Who controls final cut?  This can be a touchy and difficult subject, but one that must not be avoided.
  • Budget summary.  This should include development budget.
  • Production schedule.
  • Bond (if required).
  • Describe overall financing plan.
  • Deal structure.  Usually, profits are split 50-50 with investors, but this is negotiable.
  • Minimum threshold to break escrow.  Examples:  When there are enough funds to shoot the film or enough funds to shoot and do a rough cut.  Advantages to shooting sooner is that the film gets into the market sooner.
  • Distribution/marketing plan.
  • Risk factors–Never ever try to hide the risks from an investor.  Disclose all risks.  Be transparent.
  • Tax treatment.  This section must be written by an attorney.
  • Wind-up provision–You want to put a cap on your relationship with investors.  In the past, the usual cap was seven years.  Nowadays it can vary greatly.
  • Define accredited investor–Currently a qualified investor for a private offering must earn a minimum of $200,000 per year or have a minimum of $1 million in assets.
  • Financial projections–Do three sets of projections for realistic scenarios.

Whew!  Got all that?  As you can imagine, a lot of work goes into creating a PPM; and the SEC (Securities and Exchange Commission) has very strict rules about how PPMs are distributed. 

International Financing/Co-Production

Looking for money for your film project?  Consider going international.  There is money out there, especially in Europe where many governments subsidize film productions.  Interestingly, the U.S. is one of the few governments that doesn’t subsidize films.  Go figure.  Though you can find tax incentives in various parts of the U.S.

But if you’re willing to give up some parts of your copyright to get your film made, partnering up with a foreign production company may be a way to go.  Rules may vary, but, most likely, you will be required to do at least some part of the work in that country, such as shooting or post production.  You might even consider teaming up with production companies from several of the countries under the European Co-Production Treaty and taking advantage of the subsidies from each country.

Pre-Selling Foreign Rights

Pre-selling foreign rights is one of the most common ways to raise funds for a feature.  Foreign sales account for more than 50% of a film’s revenue, so by pre-selling your film to foreign distributors, a large portion of your budget can be raised from this market and you’ve also set up distribution in the foreign market. 

Hiring a foreign sales agent is great if you can afford it.  At  12% to 40% commission plus costs, they can be quite pricey.  But Sandra recommends selling the foreign rights yourself.  It’s a great experience that she encourages filmmakers to try for themselves.

So how is this done?  By attending international film markets and selling your film to the foreign distributors who attend and are looking for films to buy.  Here’s the list of the film markets she recommends attending in the following order:

  • IFP Market–This takes place in the fall.
  • Toronto–This takes place right after IFP.
  • Rotterdam–Focuses on indie films.
  • Berlin–A little more complex, but compares to Cannes.  IFP has a booth there.
  • Cannes–Much more difficult to navigate, so you’ll want to take advantage of the resources of the IFP booth.
Collection Agencies

When selling your rights to the world (excluding the U.S.), you’ll want to be sure to use the services of a collection agency.  A collection agency, in this sense, is not the type that you would normally think of that hounds you if you’ve fallen behind on your credit payments.  No, these collection agencies function as funnels for all the various countries in which you may have sales agreements.  They collect and distribute the various funds and can provide you with peace of mind in that you don’t have to worry about keeping track of funds from each country.  They charge between 1% and 2% and are well worth the cost.  The two collection agencies are:

  • National Film Trustees–A British Company
  • Fintage–A Dutch Company

How to Neuter a Pig

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Last week found me making the jaunt across the Bay to San Francisco twice.  Once was for a filmmakers/financing meeting and the other was for a screenwriting class with screenwriter/teacher Lew Hunter.  Lew is a very pleasant elderly gentleman who loves to rattle on about screenwriting.  It’s quite obvious that he loves to teach.

The class was only three hours long and was geared more for absolute beginners.  After taking the semester-long course in script development and story analysis last year, this felt like more of a review to me.  One little tidbit that I did find useful dealt with character development.  Lew suggested writing a half-page description of each of the main characters in our stories in the first person.  He read us a sample characterization and I can see how this could be quite helpful in finding the voice of our characters, as well as fleshing them out.  I’m going to have to give this a try.

The first part of the class was a lecture, then we had a short break.  After the break was a question and answer session.  So everyone was raising their hands to ask their questions and, one by one, Lew answered them.  One of the attendees, who came in quite late, wanted to read a couple of paragraphs of something he had written.  Lew was kind enough to indulge him.  But shortly after he started reading, I wondered if this might be a mistake.  The subject matter was…you guessed it…about his experience neutering a pig.

I would liken listening to this story as akin to driving past an auto accident.  It’s horrible to look at but, somehow, you just can’t seem to take your eyes away from it.  So I sat there listening to how this poor pig is forced onto its back with its legs forced apart and….well, I’ll spare you the gruesome details. 

The story seemed to go on and on and on.  What was supposed to be only a couple of paragraphs turned out to be a little over a page long and, thankfully, Lew called him on it.  But the guy was just about to the end, so he was allowed to finish.  So what was his question about what he had written?  He didn’t have one.  He just wanted to read what he had wrote.  By that time I was figuratively pulling out my hair.  I felt cheated.  Some of our valuable time with Lew had been spent listening to a story that had nothing to do with writing screenplays.  What in the class description gave this guy the idea that this was a writing circle?

After the class, I purchased Lew’s book entitled Lew Hunter’s Screenwriting 434 and since I had the author right there, I just couldn’t resist getting my copy autographed.  I’m looking forward to getting started reading it. 

Treatment Update

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Back in October I told you about the screenplay treatment that the writer had turned in.  So you might be wondering what’s happening with that.  Well, it got put on hold for a while.  Why?  Because I got sucked into the homework cyclone and it wouldn’t let go.  That Story Analysis and Screenplay Development for Film and Television class I was taking ended up eating just about every free moment I had and then some for the past few months.  While I regret that it slowed down the project, I think the benefits outweighed the negatives.

For the past three months I’ve been completely immersed in learning to analyze the basic elements of a story:  premise, plot, structure, character, and dialog.  Our teacher would assign a script for us to read and then we would have to write a log line, a synopsis, and an analysis of the script covering each of the basic elements.  We would have to comment on what works and doesn’t work and then give an explanation why.  Then we would give our recommendation as to whether the script should be considered for development or not.  This is the exact same process a reader goes through for each script he or she analyzes for a producer or studio.  For someone who loves to read stories and then pick them apart, it’s a good job.  The downside is that you end up having to read a lot of stories that may not be to your liking.  It can be quite a challenge to put your personal taste aside and try to look at a story objectively.

Some of the most interesting assignments we were given involved reading a script that had been produced and then watching the finished movie.  We then had to write a comparison/contrast where we identified what had changed from the script to the screen and how that had affected the movie, for good or for bad.  It’s amazing how much some movies changed, while others stayed fairly true to the script.  Films are such a collaborative medium with so many people having an input that it can sometimes be hard to discern where the changes are coming from.  Sometimes it can be due to decisions the director makes.  Other times it’s due to decisions made in editing.  Sometimes the acting isn’t there.  And sometimes it’s a combination of various factors.  But whatever factors influence the final product, I found it to be disappointing to read a promising script and then watch it get poorly executed on film. 

So these past few months have been extremely busy and educational for me.  I’m happy to say I got an A in the class.  I’m not going to claim to be an expert, but I do think I’ve got a decent grasp of the basics.  So would I ever want to become a reader/script analyst?  In one word, no.  The reason that I say this is because whether you enjoy the story or not, as a reader you still have to read and give feedback on it.  Producers don’t have to do that.  Sure, they will get stories that don’t interest them, but they aren’t required to read them.  Usually, reading a short synopsis, treatment, or the first few pages of a script is all they need to do to know whether or not it is a story they should invest some time in.  Of all the stories I read in the class there was only one that I would have been interested in producing.

As a producer I would much rather spend my time looking for that special story that I can get excited about or else working on one that has the possibility to be really good.  This brings me back to the treatment.  About three week’s ago, I was finally able to sit down and start writing development notes.  Development notes, for those of you who may not know, is feedback that producers give to screenwriters to help guide them in developing the story.  In the notes, the producer points out areas that work, areas that need work, and can even offer suggestions and ideas that the screenwriter can use or get inspired from.

In my enthusiasm for this project, I offered a ton of ideas and suggestions.  At that point, the writer suggested that we write two treatments.  It’s an idea that makes a lot of sense.  As I have said before, I’m not the only one who decides which story we do.  The decision also belongs to the cast.  I have to like the story, but so do they.  So writing two treatments gives us twice the odds that at least one of them will be something they are interested in doing.  What happens if they don’t like either story?  Well, then it’s my job to start all over and look for another story.  I keep looking until I find the right story.

Because the writer is busy working on the original treatment, I’m taking on the job of writing the second treatment, which will be a co-authored venture.  The treatments are basically two different versions of the same story.  The goal is to get both versions in tip-top shape before the cast reads them.  After they have gone through as many rewrites as needed to get them in great shape, I will then be getting at least a couple of outside opinions on them from experienced, professional writers/analysts.  Getting feedback from pros in the field is absolutely vital and I wouldn’t even think of submitting anything to the cast that hasn’t been thoroughly looked over. 

So stay tuned and as we make progress on the stories, I’ll keep you posted.  

The IT Room

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Mike McCaffertyI apologize that this piece of news is over a week late, but I’ve been snowed under with homework.  It’s the middle of the semester and our assignments are getting more complicated and, thus, more time consuming.  In addition, I’ve also taken a business plan class and a cash flow analysis class within the last couple of weeks.  Busy.  Busy.

But I don’t want to talk about my classes tonight.  Let’s talk about The IT Room!  This is a brand new webisode series starring Mike McCafferty.  It’s a cute little show that pokes fun at IT problems.  I think a lot of us can probably find something to relate to here.  I know I sure can.  You may, also, find it fascinating that this show is completely improvised.

Look around the site and you’ll find lots of ways you can interact and help out.  They are looking for IT horror stories, which you can submit via a video or their blog.  You can even submit a design for the official IT Room t-shirt.  There’s a couple of contests with some pretty cool prizes too.

The first episode went online on November 11 and is ready for you to watch.  Simply go to http://www.theitroom.com to view it!

    

Shoom Zone’s One Year Anniversary

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Yesterday was the one year anniversary of this little project going online.  Can you believe it’s been a year already?  Wow, where did the time go?  This is a good time for me to catch everyone up on the latest happenings. 

Film Project Update

A week and a half ago was a nice little milestone.  The writer turned in the first draft of the treatment.  I looked it over and, overall, I have to say I like it.  Now, first drafts are never perfect and this one will probably have to go through several edits before it’s ready to show to the cast, but there were some really good scenes in it and it has a lot of promise.

Classes and More Classes

The last few weeks have been especially hectic for me.  Besides doing a lot of homework for my Story Analysis and Screenplay Development class, I have also taken a couple of film budgeting classes. 

One class was an overview of all the various film budgeting programs available on the market and their various applications.  The other class was an introductory budgeting class.  It’s funny, I would have never thought of budgeting as being a creative endeavour, but film budgeting is actually quite creative.  Did you know that a budget describes the fundamental look, feel and style of a film?  Yep, budgeters have to be able to take a scene in the script and have a point of view about it.  They have to imagine how they would shoot or direct the scene.  Now the director might have a totally different point of view on how a scene should be played, but if a director isn’t available yet, the budgeter has to make a best-guess estimate based on his or her own vision.  Every excruciating detail of each scene must be budgeted for:  every prop, every actor, every light, every vehicle, every piece of wardrobe, every camera.  And it’s just not what’s on the set that must be budgeted for.  A budget has to allow for how you’re going to feed the crew, how the actors are going to get to the set and how they are going to get home, how you’re going to get the equipment to the set, who’s going to build the set.  It can seem endless.  Needless to say, budgets are incredibly detailed documents.  Screenplays are often described as the blueprint of a film, but, interestingly, budgets are also blueprints of a film.  It’s really all very fascinating.

Saturday was a really busy and exciting day for me.  In the morning, I had my weekly Story Analysis and Script Development class.  In the afternoon, I met the writer of the treatment.  She had flown out from the east coast and we had a really enjoyable meeting over a seafood dinner at the wharf in San Francisco.  We hit it off and I’m looking forward to continuing to work with her on this project.  She’s just as excited about it as I am.  In the evening, we both headed up to Marin County, north of San Francisco, to attend a shortened writer’s workshop given by writer/producer James Hirsch.  I say shortened because, originally, the workshop was supposed to be all weekend, but the LA fires put a crimp in those plans.  Cheech Marin was supposed to be a special guest the first night, but because his home was in the middle of the fire area, he was busy hosing down his house and yard.  Thankfully, Cheech’s home is safe.  Because of all this, James Hirsch decided to give a “sneak preview” of the workshop instead.  It was a great mini class and James is a really nice guy.  I’m looking forward to attending the full workshop, which will be rescheduled in the future.    

Whoa…I just felt some tremors.  As I’m typing this I’m wondering if that is it or if they are just a precursor to a bigger jolt.  Well, so far, so good.  Let’s continue and wish for the best.

Website Updates

Between everything else in my insanely busy schedule, I’ve managed to get a few much-needed updates done to the website.

First off, the Blog Info page has been updated to more accurately reflect the various ways that readers can get news from this blog. 

There is still the mailing list, of course, and I’ve updated the mailing list subscription page with some info that subscribers might find useful.  For example, while the mailing list has a digest option, I don’t recommend it.  There’s a couple of reasons why:  For one, I rarely blog more than once per day.  Secondly, digests are usually sent the day after the blog has been posted, which often delays the receiving of time sensitive information.  Of course, the digest is still there if you want it and you are free to choose the options you prefer for this mailing list.  If you want to change your options, PLEASE DON’T EMAIL ME.  Simply go the mailing list subscription page, scroll down to the bottom and enter your email address.  You will be then be prompted for your password.  Enter your password to make the changes to your options.  Forget your password?  Scroll further down the page and you’ll see where you can have it emailed to you.

If you prefer the convenience of a blog feed, a feed for both posts and comments is available for your convenience.  Simply scroll down to the Meta section of the sidebar (available from any page of the blog) and click on “Entries RSS” and/or “Comments RSS”. 

For you Live Journal users, a syndicated feed is available for your convenience.  I want to give a big shout out of thanks to Sheera for setting this up.  To add the feed to your friends list, simply go to http://syndicated.livejournal.com/shoomzone/profile and click on the “add this journal to your friends list” link. 

Lastly, if you have a MySpace page, you can subscribe to the blog via the Shoom Zone Productions MySpace page.  Just click on “Subscribe to this Blog” and you’ll be notified whenever new items are posted to the blog.

Available on the front page of the blog, which you can get to from any blog page by simply clicking on the header, is a section for the online petitions.  Just because I’m not actively pursuing an I-Man project right now, doesn’t mean that they should be ignored.  I might be able to use those petitions to help sell my current project with the I-Man cast so, please, if you haven’t signed them yet, please do so.  We all benefit by getting to see the cast together again.

If you haven’t checked out Shoom Zone’s home page in a while, you’ll see that it looks quite different.  Well, I’m playing around with a new look when I can squeeze out the time and, as you can tell, it’s not done yet.  The logo there is simply a placeholder for now.  I’m going to be getting a new one designed in the near future.  Eventually, the whole website will have a new look. 

Fans Worldwide

Without you, fans from around the world, this project wouldn’t mean much.  Without an audience, films would be worthless.  So whenever I go and look at my website statistics, I am very encouraged by what I see.  It’s obvious that there are a lot of you who want to see the cast together again just as much as I do.  In the past year, the number of visitors to this site has more than quadrupled.  Fans from 55 countries around the world regularly visit this site.

I thought it would be fun to see what countries we hail from, so following is a list of all 55 countries in alphabetical order.

  • Algeria
  • Argentina
  • Australia
  • Austria
  • Belgium
  • Bosnia-Herzogovina
  • Brazil
  • Canada
  • Chile
  • China
  • Costa Rica
  • Czech Republic
  • Denmark
  • Dominican Republic
  • Estonia
  • Finland
  • France
  • Germany
  • Great Britain
  • Greece
  • Hong Kong
  • Hungary
  • India
  • Indonesia
  • Ireland
  • Italy
  • Iran
  • Israel
  • Japan
  • Latvia
  • Malaysia
  • Mexico
  • Netherlands
  • New Zealand
  • Norway
  • Oman
  • Pakistan
  • Philippines
  • Poland
  • Romania
  • Russia
  • Saudi Arabia
  • South Africa
  • South Korea
  • Spain
  • Sweden
  • Switzerland
  • Taiwan
  • Thailand
  • Ukraine
  • United Arab Emirates
  • United States of America
  • Vietnam
  • Yugoslavia

Wow.  I want to thank each and every one of you and I know the cast appreciates your support too.  It’s this kind of increasing awareness that will help to make this film a success.  Thank you and I look forward to another productive year as the film project moves forward.  I can’t wait to see Vince, Paul, Eddie, Shannon and Mike together again on the screen!

Story Analysis and Script Development for Film and Television

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That rather long title is the name of a course that I just started taking.  The class started Friday and for the next twelve weeks I’m going to be immersed in watching films; reading scripts, books, and articles; and writing coverage and development notes for the assigned reading material.  Fun! 

Coverage, for those of you not familiar with the term, is the process of reading and analyzing a story and then writing a summary and critique of it.  Story analysts or “readers” are employed by production companies to do this job, and some independent producers also hire readers.  They are usually the first person to read the scripts sent to production companies and their opinion counts.  If they don’t think a script is any good, it usually doesn’t get passed on to the producer for consideration. 

But for independent producers who don’t have the luxury of having a reader, having the ability to analyze a story and assess its potential both artistically and financially is an extremely important skill (and, really, all producers need this skill).  Contrary to what some people believe, producing isn’t just about business.  It also has a creative side.

The timing for this course couldn’t be better for me.  I’ve been giving notes and comments about the story in progress to the writer for a few months now, but I’m really looking forward to this class to sharpen up my skills and help the writer make the story the best it can possibly be before I submit it to the cast for consideration.

If I thought my life was busy before, it’s now going to be absolutely insane.  But this beats being bored any day.