Financing / Crowdfunding

whatever you come up with double it or triple it in my experience

Jon Shallit that makes a lot of sense. I’m starting to feel the same way. Even with digital platforms in the mix, it seems like it helps to build more than one path for recoupment. I guess every project needs a few different revenue angles lined up, not just one. Thanks for sharing your experience, it really helps to see how others approach it.

Serhan Yorganci Good questions. You are ideally referencing several factors rolled into one. Market valuation and production budget realities. I look at the market for a film or tv series and that informs on the budget level. The actual costs of creating the film or tv show is the critical factor as the production must be viable for the market it is aimed at.

You can position your production as digital only, or, as I do, approach the budget, finance plan and revenue model encompassing all platforms: theatrical, svod, vod, avod, etc. analyzing the valuation for the project in each market sector.

Knowing the true cost of creating a film or tv series is the most important aspect as you need to make it in the end.

I created www.FilmBudget.com Worldwide using my 30 years Major Hollywood Studio, indie film and tv knowledge as a producer, executive producer, line producer and DGA UPM (and investor and financier) to create custom, bankable, bondable film budget and schedules, film finance business plans, film tax credit analysis, and producer consulting.

You've hit on the two important factors: know your market value, know your true cost of production. Bringing those two into alignment is the key to a value proposition.

Serhan Yorganci To develop a realistic budget for a film, it's essential to capture all major cost categories, which can vary from project to project, as each film is unique. Some of the major categories to include in the budget are:

1. Development (e.g., script writing fees, rights acquisition, development personnel, pitch materials, legal fees, initial marketing & research).

2. Pre-Production (e.g., casting, location scouting, set design, permits, costume and makeup, production planning, equipment rentals).

3. Production (e.g., cast and crew salaries, filming locations, equipment rentals, set construction, catering, transportation).

4. Post-Production (e.g., editing, sound design, visual effects, music composition, color grading, ADR).

5. Marketing & Distribution (e.g., promotional materials, festival submission fees, public relations, distribution deals, TV rights, digital and international sales).

6. Legal & Accounting (e.g., legal contracts, accounting services, taxes, completion bond).

7. Contingency (e.g., unforeseen costs or overruns, typically 10-15% of the total budget).

8. Miscellaneous (e.g., any additional or unexpected costs not captured in the primary categories).

The degree of accuracy in estimating the costs for these categories is what ultimately determines the realism of the budget. While quick formulas can provide rough estimates, a well-planned film budget requires careful thought and consideration of the specific needs and goals of each project.

@RyanElliott Your plan sounds very sharp. I like the mitigated risk to principal focus. Perhaps one suggestion, don't invest all the profits, if that is the intent. Also, out of such a holdback maintain a development pool to identify value properties which require a lift to close name talent. Love to discuss further and happy to assist. Bravo! More about me at www.FilmBudget.com Worldwide - 30 year Major Hollywood Studio and indie film and tv producer, executive producer, line producer, DGA UPM, financier, investor, film budget expert, film finance plans, producer consulting for fellow filmmakers and a working producer as well.

Ryan Elliott After reviewing it, I see a number of red flags that could expose you to legal and financial risks. There are significant concerns with the way you’re presenting the fund’s structure, its risk profile, and the way you’re communicating your potential returns and principal protection.

1. Unrealistic Return Projections (20-30% Annual Returns)

The goal of generating 20-30% annual returns through swing trading options and leveraging market momentum is highly ambitious and could be misleading for potential investors. Investors tend to be highly litigious when investments sour as they seek a way to claw back whatever they can get. While swing trading can be profitable in the right market conditions, consistently achieving returns in this range is incredibly difficult and unrealistic, especially in volatile or sideways markets.

The stock market averages around 10-12% annual returns over the long term, and many professional traders, even those with highly sophisticated strategies, don’t consistently achieve 20-30% annually.

You mentioned using options and leverage when the conditions are right, which inherently increases both the potential returns and potential losses. This kind of strategy can be extremely volatile and could lead to significant losses, especially if the market behaves unexpectedly.

Investors need to be fully aware that there are no guarantees when it comes to achieving consistent profits—and any claim that the fund will consistently generate 20-30% annually is misleading and could expose you to legal action for misrepresentation.

2. Risk of Principal Loss

While you state that you are focused on "protecting your principal", this is a contradiction in the context of the strategy you’ve outlined. You mention using leverage and options, which are high-risk strategies. The reality is that there is no such thing as guaranteeing principal protection in a fund that employs options trading, particularly when using leverage.

Options trading is a high-risk strategy, and positions can be wiped out in a matter of days or even hours, depending on market conditions. In the event of a market downturn or significant volatility, it’s entirely possible that the fund could lose substantial portions of its capital.

Principal protection in this context is not realistic. If the fund uses options, leverage, or other high-risk strategies, it’s critical that you disclose the risk that investors could lose their principal. Failing to do so, or implying that principal protection is a guaranteed outcome, could expose you to lawsuits for fraud or misleading statements.

3. Lack of Transparency Around Film Investment Strategy

The fund’s strategy is focused on swing trading options in the stock market, but it’s unclear how this ties into the film investments. You mentioned using the profits from the hedge fund to fund films, but it’s unclear:

How you plan to balance the two strategies. The high-risk nature of swing trading options seems inconsistent with the relatively illiquid and long-term nature of film investments.

If you’re raising capital for a hedge fund and using those profits for film investments, you need to clearly outline how these two strategies will interact and how investors will be exposed to both. Film investments are highly speculative, and you can’t simply use hedge fund profits to fund films without properly explaining how both sides of the fund are managed, and how that might increase the overall risk for investors.

It seems like there’s a conflict between the hedge fund strategy (focused on high-risk, high-reward short-term trading) and the film strategy (focused on long-term, illiquid investments with very low success rates). Without a clear strategy for how these two sides will function together, investors may be misled about what they are actually investing in.

4. Backtesting Methodology and Performance

While you’ve backtested your strategy over the last 15 years and claim positive results, there are several concerns:

Backtesting results are not indicative of future performance. While it’s useful to backtest strategies, past performance doesn’t guarantee future results, especially when using highly volatile instruments like options.

You mention that the system is designed to respond to what the market is actually doing, but market conditions can change, and past results may not replicate in the future, especially with changes in market volatility, interest rates, or geopolitical events.

Consistency in the strategy is key. If there are periods of underperformance (which is inevitable in any strategy), you’ll need to disclose how those drawdowns will be handled and how investors will be protected from catastrophic losses.

5. Legal Risks and Investor Misunderstanding

You are making several claims that could easily be misinterpreted as guaranteeing profits or principal protection, which could expose you to legal action. If investors lose money, especially after being led to believe that the fund is low-risk or guaranteed to produce positive returns, they could take legal action for misrepresentation, failure to disclose risks, or fraud.

Specific Legal Concerns:

Principal protection cannot be guaranteed, particularly when using options and leverage, both of which involve substantial risk of losing principal. The SEC and other regulators could view these statements as false or misleading.

Unrealistic return projections of 20-30% per year are problematic. These figures could be seen as bait-and-switch, as historical returns in this type of strategy are far from consistent.

The lack of clarity about how the hedge fund’s profits will fund film investments without putting investors’ principal at risk creates further confusion. If the hedge fund takes losses in its trading positions and then uses those same funds to invest in films, that could create conflicts of interest and expose you to potential claims of mismanagement or failure to disclose material risks.

Should add, if it does end up being PIF, that would be a seismic event which would only accelerate what we're already seeing in the international marketplace.

I'd say most certainly major news rumors or not! Industrial eyebrows are now in retrospective! Public relations factors will have to be paid close attention to, as this will alert investors etc.

Generally draws all attention to scenarios before not considered.

The comments and post of course reflects international educated levels here at Stage 32!

Interesting development as Saudi Arabia pushes hard into film and television production.

And many interests there hiring and using Stage 32 Certification, Jack Binder

Amanda Toney personally, I can’t see it getting past your government’s scrutiny of an American company being owned by a Saudi entity. Unless of course there’s a kick-back!! It doesn’t seem like a very good fit. There’s also the Saudi money being tainted by restrictive social policies towards women and the link between this money source and the funding of terrorist organisations. Or is that a rabbit hole we don’t want to go down?

What's the best way to identify talent with worldwide recognition if I am not working with a sales agent?

Am not being able to find Joe. So, Joe, if you see this, please connect with me. :)

Hi Joe! I’m almost finished with my script, and the visual style and vibe are a huge part of the project, which can be hard to convey through the script alone. I noticed there was only one slide for “artwork” in the pitch deck. Would including more concept art / artwork, and visual direction be helpful for attracting talent and securing a director/actors, and so on?

Thank you everyone for spending time with us on the live webinar - and for your positive comments about it in the chat. Joe did, indeed offer us a masterclass in financing structure & instilled a sense of confidence to reach out to those involved in the process and get the ball rolling on your project.

And here is Joe's profile on Stage32 for those who would like to connect:

https://www.stage32.com/profile/1143896/about

Thank you Joe!

Hi Everyone,

Thank you all so much for attending today! I was blown away by your feedback :)

Joe, thank you for sharing your robust knowledge, and Sebastian, thank you for being an amazing host!

Your sample finance deck handout has been added to your Stage 32 My Library portal, and the recording will be available soon.

If you have any questions, don’t hesitate to reach out at edu@stage32.com

.

Thanks again for joining us, I hope you found it valuable and inspiring! have a great rest of your week!

Warmly,

Sydney

It's so great to find some tips on financing, especially for those with limited budgets, James Lagrimas.

As a screenwriter (in the indie world) I find "Pitching Investors" painful. I'd take a class that teaches how to answer the tough questions... a checklist to create before a pitch.

For example, yesterday I acquired a $25,000 investor for my film. Luckily he was an old friend, but he asked tough questions like:

What is your producer's success record for getting films distributed?

Who handles the budget and ROI payouts?

What are the risks for investing in your film?

It made me realize that I need more ANSWERS before I ASK (for $)

That's incredible, Debbie Seagle! Congratulations!

I think crowdfunding Education would be helpful, James Lagrimas. How to set up a crowdfunding campaign, hiring a team to help run it, etc.

The strength of British Film and Television productions continues unabated. Good to see U.S. networks stepping up their acquisitions!

Hi Michael,

That's a very timely discussion. For my projects, I think the biggest advantage of shooting in the UK/EU isn't just the financial incentives or agreements, but the sheer authenticity and visual texture you can capture that's impossible to recreate elsewhere.

For drama or thriller genres, using the natural, historic backdrops of places like Venice (as I've written about) or Lisbon immediately elevates the production value and gives it a distinct global feel that resonates with international audiences.

The main disadvantage, as you noted, is the logistical complexity and managing teams across different legal and labor frameworks.

I'm looking forward to reading Christine Ahanotu's newsletter!

Best,

Salisu Abdullahi

Hi Michael,

It’s great to connect. Your background is incredibly impressive—the multiple Gold Addy awards and the mix of feature film credits (Under the Eiffel Tower) and international documentary work is a fantastic blend of experience.

As a writer and producer currently finalizing the pitch for my contained thriller, The Safe House, I truly appreciate your expertise, especially the D.P. perspective you bring to storytelling.

Wishing you success with the MFA!

Best,

Salisu Abdullahi

I think it's smart to position a project for overseas production if the story won't suffer, Michael Fitzer, MFA.

Good points here. However there seems to be a generalization of all production vs. the seeming intent of the conversation. It is Drama that is difficult and has always been. The talk then embraces all of production. Drama is uniquely challenging as it does not have the dedicated fan base that genre movies, action adventure, etc. have. Yes, international filmmaking, packaging, and co-productions are important to embrace, the question is how do you get a Drama to breakthrough. This has challenged distributors for decades. On a good note, the major studios are returning to embrace this market and to keep the audience served.

Great comment Jack Binder! What's interesting about producing drama in the UK is that the UK is considered a more literary society. Not "literate," mind you, but literary. As a society, they tend to embrace the serious elements of drama more than in other places (North America). STORY VS. PRODUCT. The UK film industry produces a vast number of serialized and one-off dramas through the studio system and amongst the indie community.

Helpful overview of film tax credits & state-specific projects underway. Likewise here's a list of State & International film tax credits. www.filmbudget.com/film-tax-credits-and-film-tax-incentives-explained/

This free live event is your invitation to finally tap into the power of the world’s largest online platform built by creatives, for creatives.

I signed up, Jack Binder. I'm looking forward to the Open House!

How about this:

This version was shot over several months to illustrate its tone and visual style. It’s meant to show its potential, though it’s still a rough cut that needs pickups and polishing.”

Lose "watchable" not a good look, call it a "work in progress", not not-finished, needs... imho.