When you are writing up the agreement you can put in whatever
payback clause you want. You can stop paying them after a certain
number of days or months or years - after a specific number is
reached - after a specific percentage is reached - it's entirely
up to you and the investors.

=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)

Thanx for the advice,
This is my first time, can you please tell me how much profit would the investors normally expect from film making? (ie:50%, 75%, 100% from their investment)

I do have 4 investors so far.
Thanx

Arci Fadillah

When you are writing up the agreement you can put in whatever
return you feel is right. You can offer them 10% or 100%. Though
I'm thinking that offering the investors 100% of the profits isn't
very good for you - the filmmaker.

Since you already have four investors I suggest you sit with each
of them separately and ask them what they think is fair. Then you
can put all that info together and decide what works best for
them and for you. Then you go back to the investors with your
proposal.

You may have to do this a few times until they are all happy and
the deal is good for you, too. Then with the rest of the investors
you will already have an agreement. If they like it, they will invest
- if they don't, they won't and you go on to the next one.

=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)

Make sense, Thanx a lot

Arci Fadillah

In more commercial arrangements, it's very common for 100% of the money that comes in to be given to the investors until such point as they recoup their initial investment. After that time a profit share arrangement kicks in where the investors and the "producer" (i.e. production company) share the remaining funds through a percentage split, normally still in favour of the investors.

I'm very much in favour of producers trying to negotiate at least a small percentage from the first dollar (increasing once the investors recoup) as this is the only way to build a sustainable production company. Sadly, many financing organisations don't see it that way.

But utlimately, the recoupment schedule is what you and your investors agree upfront (and put in the contract!).

Ben C.

--
Benjamin Craig
Editor-in-Chief, filmmaking.net

The only thing I would ad the the other responses is this:

1. If this is your first feature film and you have investors willing to give you money...you give them whatever they ask for!!

I say that kind of in jest...but not really.

I don't believe any investor will ask for 100%. If they ask for 90%, give it to them. If they want their kid or girl/boyfriend to have a small part in the film, give it to them.

Your goal on your first feature film is not really to make money for yourself, but to create your "calling card." To show future investors, or studios, for your next film that you know how to shoot a feature film on schedule and on budget and turn it into a movie that will make money.

Before Lucas could be entrusted with the money he wanted for Star Wars, he had to prove himself first - and American Graffiti was born.

First time filmmakers have NO leverage when it comes to profit sharing in their first film, so don't expect much. You're a HUGE, untested risk. But if you love filmmaking, you should kiss the feet of anyone who wants to give you money for a movie. Understand the filmmaking food chain and keep in mind that your first film is your calling card not your cash cow and that it's your first step to more leverage, bigger budgets and bigger shares.

Don't ask for a small upfront share on your first film. My first films I gave 100% plus an additional 25% as an interest payment to sweeten the deal (remember, they're taking the money they're giving you from an interest bearing account). I guaranteed my investors 125% return from "profits," before a 50/50 profit share with the producer side of the table. Do you think they liked the sound of that?

When you say "Guarantee," don't leave out the words, "from profits." You can guarantee X% out of profits, you just can't guarantee there will be profits!

You're asking them to invest in possibly the riskiest business venture in the world. 125% upfront return is nothing. You should be worshiping the ground they walk on.

Hopefully you have a great script that has been submitted to 2-3 professional script readers who have returned it with positive coverage. If you don't have a great script, you won't have a great movie, and you'll burn every bridge you've built with your investors.

I would recommend against sunsets on profit sharing. They paid for your movie, it's only fair they earn a return on that investment every time that movie makes money. Period.

Once you are an established name in the film industry, you will have the negotiating power to get whatever you want out of the deal, but until then, keep it simple, and keep investors happy.

2. If you're raising money for a short film...forget about it! It's not going to make money anyway. "Certified Instigator" already knows my thoughts on that issue ?;)?

I hope this helps!

All the best,

J. R. Legend

Tell me your biggest filmmaking challenge at <b> http://FilmSchoolSavings.com</b>

Let me kick your butt into gear at <b> http://JRLegend.com</b>

I agree. I am meeting with some investors tomorrow and I am so excited about the possibility of getting to shoot this script, I am not really expecting to get much of anything out of the backend of this project. I have no credit to my name and these people could be putting their money into something that will at least make them a little money and at worst, they will still have their initial money.

I also just want to make this movie, so making money is really not on my mind.

quote:

---

Originally posted by JRLegend
I don't believe any investor will ask for 100%. If they ask for 90%, give it to them. If they want their kid or girl/boyfriend to have a small part in the film, give it to them.

---

For my first feature the guy who put together the financial deal
wanted his wife in the movie. The producers - wanting to protect
me - balked and the deal almost fell apart. I was then ( and am
now) of the mind that compromise is essential.

I cast the guys wife and got the money to make my first feature.
Okay, she wasn't very good but neither was my first feature.
However the investors made back a little over 80% of their
investment, they enjoyed being part of a "Hollywood" movie and
I'm sure the guys wife rewarded him in whatever way he wanted....

=============================================
The aim of an argument or discussion should not be victory, but progress.
Joseph Joubert, essayist (1754-1824)