If you ask around about how to get funding for your project, the first thing that usually flies out of the mouth is “crowd-funding”. It’s the latest craze and we hear so much about it. But how likely is it to work and what is it exactly?
What is crowd-funding?
Crowd-funding is such a tricky beast for people to understand because it seems like something that it technically is not. What crowd-funding seems to be is a way to get funding for your project. Free money by request because people like to donate their hard earned cash to projects of interest. What it really is, is distribution reliant on marketing and traffic from other sources. I’m going to use a film project for example in this article, but the same logic will apply to video games, music albums, and other projects.
There are two parts to the crowd funding website that should concern you. 1. The page for your project for which you will drive traffic, potential buyers to. 2. A blog feed highlighting the more popular and successful projects. You should treat these as two separate entities as you will have to be successful at one in order to take advantage of the other. You will be manually marketing and selling your product through the crowd-funding platform to start, in hopes of getting high enough in their news feed so that you may actually take advantage of their network, which is what has apparently made this platform famous, the big winners. In the end, you are just selling your product in a store with some integrated social networking between merchants. It’s technically, no different than using Facebook groups to network, and driving traffic to your projects website with a big “Donate” button instead of a “purchase” button. Crowd-funding is a store in disguise, made to appeal to the merchant, you.
TIP: Paying for web traffic on your crowd-funding page may help improve your rankings in their news feed.
Finding investors: When to NOT use crowd-funding
Chances are, if you have a small project, it would be more beneficial for you to first seek investors as you will not technically have a product to sell yet. You need to make a product first. If you have nothing to sell, crowd funding is likely to waste more of your time than if you were to simply get a job and pay for the project yourself. For a micro-budget film, which is roughly between $10k and $50k, you will first need money to shoot the film. And let’s not be naive. If this is your first 90 minute film, you aren’t going to easily get $100,000 funding.
What you have to bargain with is credits and shares of the movies profit. You would designate a percentage and sell these shares. You are generally looking for $500 to $5k investments. If you can hit $10k or more, you can shoot a movie. But stick to your budget as it will tell you exactly how much you will need.
Personally, I believe in assembling a management team that will also invest for shares. Assemble your key players and see who would be willing to invest $500. With a team of 5, you already have a $2,500 budget to start. (Coming soon. I talk more about assembling an Indie production team.) As well, each of the team members can seek investors individually. This is your sales team. Type up an agreement for everything. Work together. Utilize each others networks. Sell your movie so you can make it.
Now it is time to seek investors. Prior to scheduling a meeting with a potential investor, shoot them an opening phone call or text message letting them know that you will send them an email about a film investment opportunity. Type up a letter. Personalize it. Include a treatment (summary of the film) and the script if you feel the need, assuming it is 100% completed. No rough drafts! No typos! Then follow up to schedule a meeting to close the deal. Meet at their convenience through phone or in person.
For the pitch, you would create a simple business plan document to hand over to investors as you pitch your movie. Don’t include information you don’t need. The antagonist’s wardrobe is not important here, writers. Include synopsis, budget, information about the shares, distribution goals, marketing plans, projected sales, and some good old fashioned sales pitch. Be reasonable but don’t fail to mention some possible figures here. This builds excitement. Be positive but not naive. Go over it with them and leave it with them or shoot it to them in an email during the meeting. Keep in mind that the investors will become part owners of the film.
TIP: Don’t start babbling about how special this movie is unless you are talking to grandma, or sweet aunt Barb. I have a sweet Aunt Barb and I’m sure she would love to hear all about my film ideas. Save your ramblings for your own Aunt Barb. Investors will generally want you to get to the point in a professional and friendly manner. Don’t bore them or they will be trying to broom you out the door. Respect their time and yes, you need to be professional, but don’t feel like you have to be uptight. Just relax and enjoy a the chat. In the end, you are simply asking if they are interested. If not, no big deal. Walk out of there with a stronger friendship.
Pre-selling your film: When to use crowd funding
What’s good is that crowd-funding can be used to “pre-sell” your product by way of accepting donations in exchange for free or “non-taxable merchandise”. After you get funding for shooting the movie and then actually FINISH shooting the film, you can then release some footage to be used in a trailer and pitch video so that the potential buyers can see the product. Then sell it for what it is worth, (generally between $5 and $10) along with other add-on items like “associate producer credits” and a hug from your leading bombshell. This money can then be put into the post production of the film. This is crowd-funding done right. Understand what it is. It’s not a saviour. It’s a distribution and pre-sale platform. Treat it as so.
There are exceptions. These exceptions are what give crowd-funding platforms their fame, making a documentary on Calvin and Hobbes for example. Joel Schroeder’s Calvin and Hobbes documentary was successful for two reasons. 1. The project was professional. 2. It’s Calvin and Hobbes and people love Calvin and Hobbes. People are more than eager to donate to (purchase) something they like. I donated $30 myself. I grew up reading the comic strip and wanted to know more about the author. I was sold immediately. The fact of the matter is, a Calvin and Hobbes Documentary is a wise project and sells itself, as did the Transformers movies, though Megan Fox might have had a part in those sales too. But you? Your project is likely NOT going to have that advantage unless you acquire licensing or Megan Fox. Plan carefully.
All done. Now what?
Okay so you’re movie is 100% done. All that is left is to distribute it. You have a few options. 1.) You can self-distribute the film through your own website using Paypal or a similar service. 2.) You can go the traditional route, seeking out distributors and film festivals. 3.) Submit your film to iTunes, Netflix, Amazon, etc. you will likely need a middle man to accomplish this.
I would actually attempt all of this but saving the Netflix / iTunes horde for last, after I had established a solid web presence, and exhausted my resources.
I’ll get into this more in the future.
Simple sequence for successful funding
- Write a budget friendly script (under $20k recommended)
- Assemble your production management team
- Prepare business plan document and agreements
- Self invest ($500 each recommended)
- Find investors
- Shoot your movie
- Launch a crowd-funding campaign for pre-sales
- Use the crowd-funding dough to fund post production
- Start selling!
The Bottom Line
You don’t need funding. Stop expecting free money. You need investors and sales.
No more bubbles!
That’s a wrap, kiddos! I wish you all the best of luck with your projects. As always, you know where to find me.
“Dream big. Keep it real. Make it happen.”
Composer, Producer, Web / Technology Specialist
(draft 1 – August 3, 2014 – by Adam Spade)