3 Reasons An Investor Will Support Your FilmJul 15, 2022
This week, I'm going to explain the three reasons a private investor will invest in your film.
It's valuable to know these reasons before pitching to potential investors. It give you the best shot at converting AND it will ensure you don't waste time pitching the wrong investors.
Unfortunately, most filmmakers struggle to raise private equity.
Private investment doesn't happen by chance. It happens for very specific reasons.
The reasons we're going to talk about today are often glossed over or overlooked for a few reasons:
A simple lack of knowledge.
A fear of applying that knowledge.
Lack of iteration.
If this sounds familiar, don't worry, by the end of this email you will be able to overcome these road blocks.
Here are the reasons, in order:
Reason 1: Disposable income for high-risk investments.
This might sound obvious but without it, you can forget what comes next.
Film is high-risk / high-reward. So it only makes sense for individuals who have lots of disposable income. And I mean a lot. Film investment falls all the way down an investment list. Past bonds, shares and property, even after Crypto!
So for starters, you are looking for a particular type of person, often a High Net Worth (HNW). But not all HNWs are equal. We prioritise HNWs who have a cash-flow positive business or job. This is because HNWs with income tied up in projects, like property, are less liquid and ready to invest.
Keep in mind, the level of investment you need influences the type of investor you need to find. A $100 investment requires much less disposable income than $100,000. In both cases, the income stills needs to be disposable relative to their total income.
Reason 2: Emotional drivers
This overlooked factor is the reason so many filmmakers don't know where to begin.
Emotional drivers are the unspoken motivators why an investor chooses your film. They fall into two buckets: film & filmmakers.
The emotional drivers for a film relate to the subject matter or the central theme.
For example, I made a narrative film set in Greece against the backdrop of the Syrian refugee crisis. So the emotional drivers were: refugees, human rights, social issues.
The emotional drivers for a filmmaker relate to your relationships or unique characteristics. The most obvious reason for a person to invest in your film is: YOU. So, it could be your direct relationship with that person or a community. Think: College Alumni, Sports Team, Ethnic or Cultural Background, Religion, Town.
Using the same example, an emotional driver for the filmmakers was Greek Australians. This is because they share the same ethnic background and the film was set in Greece.
The best way to use emotional drivers is to stack them.
Using the same example: a HNW Greek/Australian attorney practising human rights law. Or one step further: the same person but I know them through my local soccer team.
Reason 3: The numbers stack up!
If you've made it this far, congratulations, you're past the hard part!
This final reason is that they feel comfortable giving you their hard earned money. To make them comfortable, you need a well presented financial document.
This financial document should include:
The opportunity for the investor;
Your film's Unique Competitive Advantage;
Pathway to distribution;
Team's track record and bios.
And it should use their language, not ours.
By understanding these reasons, I never have to guess when it comes to raising private equity.
Instead, it is a process of identifying qualified investors and pitching them.
(Income + Emotional Drivers) x Numbers = $$
Simple? Yes. Easy? No.
Well, that’s it for today.
I hope you enjoyed it.
For more on this topic, head to my Youtube Video.
See you again next week.
Whenever you're ready, there are 2 ways I can help you:
1. Develop your filmmaking skills [FREE] here (680+ subscribers)
2. Work 1:1 with me to start raising finance or land distribution (Booked out 1-2 weeks)