Getting Development Funds, Stacking Tax Incentives, How Much You Need To Make Offers, & more.

Hi there and happy Wednesday!

I wanted to take a moment and answer some questions that came in Monday via my Real Talk About Financing post and accompanying Survey.

Thank you for all who participated! I received some illuminating questions and several which overlapped so I’m going to attempt to answer the most common ones below.

And then if you’d like to take the 4-question Financing survey yourself, here’s the button to click and participate so I can answer your question personally and/or here in the newsletter.

Get Your Financing Questions Answered

Getting Initial Funds In the Door (aka Development funds)

Probably the biggest challenge I’m hearing about both here and in my FS Pro group is from filmmakers and Producers who are trying to create a new roadmap for themselves by either partially or fully funding their own work in order to build momentum, and how the heck to get initial funds through the door to make it happen.

In short, I agree it’s not easy if you’re not rolling around in money like Scrooge McDuck. BUT…some things myself and clients have done successfully to raise initial funds include everything from crowd funding (even $10-$15K will get you rolling), friends and family, getting a side hustle and applying those funds towards your projects, hitting up donors (if your project has social impact), and pitching brands and other organizations aligned with your message.

In my experience, there’s no shortcuts! It’s roll up your sleeves work day in and day out. But it has the potential to pay dividends over time as results tend to compound over the long term.

How Much Development Money Is Needed To Make Offers

As a follow on to the above question, the answer so much depends on size of project, director, producer, budget, union status, existing body of work and credibility, etc. I’ve made offers to talent with everything from zero dollars in the bank to backing a schedule F offer (about $80K) on up to multiple six figures pay or play offers for A list talent on big movies. There’s a lot of nuance where this is concerned and I don’t recommend you do so without having an experienced Producer, EP, or Casting Director on board to guide the process (and are lawyered up to boot).

What percentage of a budget do you need in Private Equity

Sometimes you need 100% especially if you don’t meet minimum thresholds for tax incentives. If you do meet minimum thresholds, then you can reduce that to 75%. If you have a high value package, you can reduce that to 50%-30%. But I haven’t seen much below that in years. And all this depends on level of director, stars, and producing team. It’s not a linear equation.

Should you stack tax incentives for more money

Short answer is no, probably not. It gets really complicated and expensive to administer multiple tax incentive programs particularly for smaller films. You’ll end up eating up any savings in fees. So don’t be swayed by pie in the sky rates you read about in film market ads - there’s so much fine print and most of the time your film won’t even qualify. Keep it simple and you’ll save over the long run.

Want Your Financing Questions Answered? Click Here.

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Alright I’ll leave you with that today and pick up Part two in another newsletter.

Click the button above to get your own questions answered or email me at stacey@filmspecific.com.

Have a great rest of your day and speak to again soon!

Stacey

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