Wednesday, June 22, 2011

A film investor's insight and thoughts on business plans

Gary Chou was the principal financier of my movie Surrogate Valentine. The most common thing people ask me about is how to raise money for films. In his insightful blog Gary mentions the reasons he invested in Surrogate Valentine:

  • He was already a fan of the principal participant, Goh Nakamura.
  • He felt the team of Goh and director Dave Boyle seemed like the foundation of a tech startup, something he was familiar with.
  • Both Dave and Goh had a track record that proved they would find a way to succeed.
  • They were going to find a way to make the movie with or without his investment (they didn't come off desperate, but were presenting him an opportunity to be involved).
  • They both wore multiple hats (meaning that both Dave and Goh have skills and knowledge that enable them to propel their project toward success, without relying on others to solve problems for them).
  • And finally: "There was a clear energy between them where you knew the level of awesome was more than the sum of the parts."
Gary's post is good to read as you seek investment because it's helpful to consider how you appear to your potential investor. One of the important aspects of Surrogate Valentine was the business model that Gary alludes to. By keeping our budget low we proposed a way to make Return on Investment through our own grassroots efforts. It is important that your proposed business plan actually includes a plan. I recently read a book that stated that any business plan that relies on someone coming in and buying the product (and making "all our dreams come true") is NOT an acceptable business model. Almost all business plans for film projects rely entirely on exactly this. The business plan is essentially making the movie and hoping that someone buys it. HOPE IS NOT A STRATEGY. Of course, when you're making a film for hundreds of thousands of dollars, you'd better hope that something global is going to happen (and if you're expecting someone to give you that kind of money you had better be in a position to implement global activity)... if you're making it for significantly less than $100,000 then you can develop non-traditional strategies that make economic sense.

Surrogate Valentine presented a plan that we are currently implementing. At no point did we intend to offer the film up for sales. We didn't have a sales agent going into SXSW. We knew that ours was not the kind of film that companies look for. We also knew that anyone who did show interest would probably not do any better at getting it out there than we could do ourselves. If someone came with a big offer, that would be great, but our business plan never relied on it. Instead our strategy includes DVD sales at festival screenings, a small theatrical release, followed by VOD. The theatrical and VOD release were all coordinated by ourselves (Dave really) based on contacts established during our previous projects.

For his part Gary Chou has been a dream-come-true-Executive-Producer who has gone out of his way to support and promote the project. As a social networking tech VC guy he's done his share to get the word out. It's great to be able to work with so many amazing folks with such an array of skills.

You can support our efforts by buying it from Amazon, or putting it in your Netflix cue.

Surrogate Valentine: Behind the Scenes from goh nakamura on Vimeo.

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