Where to find movie investors

In this week’s newsletter, I’m going to show you where to find movie investors.

If you want to make a movie, you’re going to need some money.

So, it goes without saying that knowing where to find that money is crucial to you making your film. Once you understand where to look (and where not to look), you will be able to run targeted and effective private investment campaigns. This will lead to more private investment coming into your finance structure, and ultimately, will lead you to financing more films.

Unfortunately, most filmmakers don’t know where to start when it comes to finding investors.

There is too much conflicting info online

Anyone who has made a feature film can start spitting out advice on LinkedIn. The problem is one film doesn’t show you patterns. But once you’ve done this for 12 years, and helped over one hundred filmmakers navigate the funding stage, patterns and data (which I reveal below) emerge.

Here are some other reasons filmmakers struggle with this:

1. They focus on industry folk – The sooner you realise that every producer in the film industry is searching for money, like you, the sooner you will stop reaching out to them.

2. They believe there is a secret list of investors – Unlike the startup world where Angel Investors make themselves publicly known, there is no secret list of film investors.

3. They run ineffective cold outreach campaigns – The wrong messaging, targeting the wrong people, in the wrong way.

If any of that sounds like you don’t worry, by the end of this Newsletter you will know exactly where to look for money and how to allocate your time during fundraising.

Here's where, step by step:

Place 1: Your Network

No one trusts and knows you like people in your immediate network.

Investing in a film is a high-risk decision for an investor. Think about it. You’re asking them to put their money into a venture in an industry where only a tiny fraction of films make up the overwhelming majority of the income. They know this. They might even know it better than you. And yet, they invest.

Why?

Because they trust that you will treat them and their money with respect.

For this reason, your network is your highest converting category of investors. By a country mile.

Let me show you the real numbers behind this.

I did a quick analysis of every investor on one of my projects.

Guess what percentage of investors knew the filmmaker/s prior to investing?

Eighty Three percent (83%)

Over eighty percent of all private investment across several projects came from investors who had a pre-existing relationship with the filmmaker/s.

What does this mean for you?

If you are ignoring your own network when it comes to raising finance, you are significantly reducing the likelihood that you will finance your film.

It’s important to mention that not everyone has individuals in their network who have the financial means to invest in a film.

This was my situation on my first and second films. So rather than try to raise external funding we financed it ourselves with whatever funds, in-kind support and deferrals we could scrape together to make those films.

I talk about turning a disadvantage (like not having a network of people to invest in your film) into an advantage in my new book, The Producer’s Edge.

Place 2: A friend of a friend

Many filmmakers are too embarrassed to ask people they know to invest in their film.

This is where the friend of a friend, or as I like to call them, Conduits, comes into play.

The Conduit is a person you know, who has access to potential investors and is happy to introduce or share your materials with them.

I learnt about conduits on my third film, Green Light. We were making a film about black market access to medicinal cannabis in Australia. Our subjects wanted to see the film made and their message conveyed to audiences. So they provided introductions to potential investors.

Once the introduction was made, it was up to us to pitch and convince those investors that the project was worthy of their investment.

On almost every project I’ve made since then, conduits have formed an important part of my fund-raising approach.

In terms of raw numbers, they make up ~15% of the total investments.

Bonus: If you have someone who you think might be a potential investor, but you don’t want to pitch them directly, simply ask them if they know anyone who might be interested in investing. They will most likely want to help you, and you might even be surprised that they ultimately invest in your film directly.

Place 3: The Industry

Are you spending most of your time reaching out to Producers and Executive Producers in the hope that they will invest in your film?

If the answer is yes, stop.

Like right now.

To date, not one Producer or Executive Producer has invested in my films who was not already involved in, and reinvesting their fees, into my film.

Granted, I’ve not spent much time on this since my early days when I tried it, realised it didn’t work, and moved on.

The reason for this is simple: every producer and EP is trying to raise finance themselves.

Just last week, I spoke with a Producer who was introduced to me and the filmmaker through a mutual connection. He directly invested into his first feature, which was successful. We are discussing him investing in our feature.

So, I might close my first Producer shortly BUT this would also be categorised as an introduction through a Conduit, rather than my cold outreach.

It’s also worth noting that if we include sales agents, distributors and crew/suppliers reinvesting their fees back into the film, then a decent amount of finance has been raised through these sources.

But this Newsletter is focused on where to find private investors, so I’m leaving those sources out for today.

Place # 4: Cold Outreach

Finally, in second last place, is Cold Outreach.

Cold outreach accounts for less than 5% of the finance raised across these feature films.

And to get that percentage?

We needed to do an insane level of outreach.

How much exactly?

In one campaign I ran, 1640 leads resulted in 1 conversion.

If you’ve only done a handful of cold investor outreach in the past 6 months, you are underestimating the amount of volume required by orders of magnitude.

More importantly, if you’re relying on cold outreach as your only strategy to raise private investment, you better know what you're in for.

Where to from here

Even though I knew these figures in the back of my mind, I never took the time to calculate them as I did today.

What’s interesting is the timing, just this week I was reading a book titled Beyond the 80/20 Principle.

For those who don’t know what the 80/20 principle is, run a quick search of 80/20 or Pareto Principle.

In essence, what today’s numbers reveal is that 25% of the categories of investors result in ~80% of the outcomes.

If you're looking for a clear signal on where to find private investors, this is it.

If you liked this breakdown and want to see more like it, reply and let me know.

Until next week.

Happy fundraising.

Alexi