What's wrong with this statement from someone seeking film financing?
"Hello Mr. Investor! I've got a great script that's won a ton of awards & competitions and an incredible pitch deck that will dazzle the eyes for my $5 million movie (approximate budget) with comps that include some $50+ million movies that made tons of money at a fraction of the cost! We also have (insert A-List talent name here) attached with an LOI!"
So much to unpack here. Yes, this was from a real person. Where to start in disecting process?
We'll start with what's wrong/misleading...
First, everyone says they have a "great script". And tons of those scripts are indeed fantastic. But does the script match the budget? Maybe it does. But often, people will try to squish a $50 million script into a $5 million (or less) budget.
Pitch Decks are great commercials for a film, but often have little to no accurate information regarding numbers, reality check of talent, ROI, etc. For this reason, most to all investors require a film financing business plan, but they don't require a pitch deck.
"$5 million approximate budget" hints no real budget has been done yet so they're guessing. Something that doesn't go over well with an investor when they ask to see the budget. Don't do this lol. Also, making up a top sheet without doing the actual budget is as close to fraud as you can get. Top sheets are generated by the full budget. Making up numbers to fill the top sheet will be a chore when you have to actually produce the physical budget and the top sheet numbers don't match.
Comps can only be within the budget range of your project. With a $5 million project, using $50 million comps is illegal. More about this later...
I recently posted on using the word "attached" (see Tip for the Day #9 for more info on this) and an LOI is NOT an attachment.
Those are the items that are wrong with the statement. So how do you fix this comment and make it legit?
Make sure the budget fits the script. Get a real full budget done by someone that does it for a living such as myself. In order to actually get an accurate budget, a script breakdown/schedule should also be done.
Few to no investors require pitch decks. However, nearly all require a film financing business plan. So if you can only afford either a pitch deck or a business plan (and yes, they are as different as night and day), get the one that will actually help you get your financing and that's a business plan.
Comps (included in the financial projections section of a business plan) have SEC requirements and can't supersede your projects budget by more then 20%. A fact tons of people seem to either not know or ignore.
This post is a reality check for many.
If your seeking film financing, & want to do things the correct & legal way, hit me up for my rates, info, consultation and promotions. You've worked hard for a long time. Don't falter on the final steps.
Now let's go make some movies!
Great post, Patrick McIntire! Thanks for sharing. "Comps can only be within the budget range of your project. With a $5 million project, using $50 million comps is illegal... Comps (included in the financial projections section of a business plan) have SEC requirements and can’t supersede your projects budget by more then 20%." Do you know if that goes for pitch decks too? And what if a writer uses a $50 million comp for a $5 million script because the $50 million comp matches the tone of the script? The pitch deck would be to pitch the script, not get funding to make the movie.
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Maurice Vaughan Apologies for the late reply as I just saw this comment from 3 weeks ago. The simple answer is no, you can't use that $50 million comp ever. This is why investors don't require pitch decks but they do require business plans. As fake as a pitch deck is when it comes to numbers and accurate info, that still doesn't allow it to falsely use comps 10x it's budget. Sounds like you may need my services lol. If and when you want to get those projects up and running, email me at productionbudgets@yahoo.com
No problem, Patrick McIntire. That happens to me sometimes. I don't see a comment until later on. I make pitch decks to pitch my spec scripts to producers and directors, and the pitch decks don't have financial numbers. I use comps that are close to the estimated budget of my script. I was just curious about the budgets for comps when making pitch decks for spec scripts. Thanks for the info. I bookmarked your profile in case I need a budget or business plan.