Film Courage: Can you talk us through your first investor meeting? First off,
where would you be meeting these people?
Sean Reid, Filmmaker: I've met investors in all kinds of places. I've met investors in coffee
shops. I've met investors in high-end hotels. I've not met them at all, I've just talked to
them on the phone. Really it's just wherever the opportunity strikes, wherever they're comfortable,
wherever you're comfortable and go yeah however it's going to work. I've done it just straight
over the phone with no meeting whatsoever, just a conversation, let them think about it, close the
deal in another conversation, sign the agreement, you're done. It's what it should be actually.
Film Courage: Is it mostly the investor asking you questions or are you taking the lead?
Sean: If I'm contacting someone I'm giving them the information and putting them through the
paces, taking the lead and letting them know what this is and what it contains and how it
works and here it is and taking them through essentially what it's going to be and what
that deal is so that before we've ever gotten to paperwork we have in spirit agreed on the deal.
That's the key element to where people don't realize that they have a deal, it's the art of the
deal right. If you haven't decided on or discussed all the deal points then why are we taking it to a
lawyer? The lawyer is just going to ask you those questions and you're going to have to figure that
out and if you haven't decided and one of those could be something that would break the deal
then you could break the deal in that process of having not vetted that through the process
the major deal points how much what are they going to get how long
what rate you usually have to put an incentive in so pay them back at 110 percent
and give them a certain make that worth a certain amount of points
this is regardless if as to whether this is alone if you're making it alone right
so you have to pay it back in a certain amount of time for that's that could still be the 110
that could be 110 percent at a certain point that 110 and then giving them a back end that
means it's not a loan so you don't have to pay it back like in September whatever it is
you can pay it back whenever because they have the point the points are essentially
there but they need to when the money comes in they're getting that up to that point and now
as for giving you that money now they received this percentage for the lifetime of the project
and what are you preparing for your pitch what are you bringing I know you said sometimes you
do this over the phone or whatever but if you're to meet in person what are you bringing with you
well if it's more than likely it's a deck it's a deck that for a specific project or a specific
whatever the project is if I'm if it's a streaming network or if it's a movie whatever it is it's
you're going to have a deck you're going to have and along with that deck people say decks and they
make it like it seems so impressive but really the thing is the deck is really nothing unless
you have the stuff that goes behind it the stacks and the figures and the things so essentially the
presentation written that goes along with the deck right the this is the story of why you should give
me this money or what this is what and why you're giving it to me or this is the story of the the
would you call it the Internal Butler or the Incisive Butler or the Butler Savior or whatever
the butt of all jokes I don't know but whatever that is and then this is what you're going to get
one has to say you're going to lose all you could lose all your money and you'll never see any of it
again that could happen or then the best thing that can happen would be all of these things
that it does this or the medium thing would happen would be these medium things
and to have it and ask you have to ask for money you have to say this is I want this much people go
in and they don't ask for things they don't directly say what they need it for and what
they're they just kind of kind of ballpark it or if you really feel it's like no I need
five million dollars to make this movie well what happens if I give you two million dollars well
I'm still going to have to raise three million dollars to make the movie but I could do this
you have to have that kind of definitive decisiveness I know that that sometimes
can be off-putting for more genteel types but to be perfectly honest that's what business people
who are who especially if you're going to go to a business person that's how they're going to be
when it comes to making an investment if not there's always Indiegogo and that's fine too
it's great I love Indigo go we go combo I love it some perks do it love it but you also have to
fulfill the investor perks and yeah exactly I mean they still have to you still have fulfill things
it's just you don't necessarily have to pay them back which is nice right are most of these deals
where it's 110 so it's a loan of some sort oh the the 110 is kind of just always been a standard
thing that I've learned since the first time I've ever done one of these is that you're doing that
and then you're doing you're giving them points so you're giving so on that money you're paying
them out too so that because essentially it is a loan you're going to giving me this money I'm
holding on to it to for this essential amount of time to do my business so it's fair that you to
make a certain amount ten percent which is not an obsessive amount by any stretching imagination on
that money and then you also are an owner of that money and you will be paid out after you're paid
out the 110 you will receive 13 13 points of the movie and that money is kept in a bank account
under the LLC of the film okay or it could come from a holding company that then drops it down to
the LLC holding companies are usually good things to have because then they can be combined with
other things and then could just be dropped down to like like the movie we're doing craving LLC
well that's really only for that movie right that LLC will disappear holding companies can be around
you can keep a holding company that's just a bank a bank account that's the money is going to come
into and then it's going to drop down into another account something that can be a whole big company
essentially is a holding company its own LLC and then you have subsidiaries it's an old it's
yes yes so like Fox does in a big model Fox does Productions and now it's all under Fox but then
anytime any of those shows they're all under some other company name that they've made up because
those then so that it's not liable back to 100 to Fox it's liable to itself as an into the business
on its own that's the idea of a startup that's where that's where it kind of comes from you're
starting a company from scratch every time you make a movie and then it kind of just goes away so
you don't have to keep that LLC active necessary after after a certain point now like at a certain
point you don't need once you've completed the movie and done all the different things a lot of
times what they'll do is then it'll just kind of roll over to the holding company or to that bigger
company or distribution company where that money is coming from and then as long as it's dropped
down and paid out to everyone appropriately nobody cares at that point that way you don't
have to keep paying taxes on an entity that's not doing anything except paying out money right so
that would be one of them for the internal Butler the first investor you brought the project to she
passed she said I don't think this will make money so now you bring it to a new
person how are you ramping up the pitch are there different things you're going to make sure that
this person sees that she didn't see she didn't get well I think that that's that starts to be
it's all theoretical and I hate responding to theoretical things sometimes because they're
responsive and do you can only anticipate what some person would think but let's just say
that they actually said that they felt that it wouldn't make money because
black movies don't sell well foreign okay that's an actual an old feeling because if
we went we shot it and we made the Disposable Butler or the or the Internal Butler Idris Elba
then I don't think we have the the problem that we're talking about so because he does sell for
it and he would sell both coasts he would be he's a name here and he's a name there so that
would be an interesting casting way so you'd have to think about you'd have to come up with
if you can't run around reacting to what everybody thinks if you hear something three times then
it may be true right so if I heard it the first time and it was something and we talked about it
amongst the team and whatever we said okay well the fear begin with then but if the next person
says the same thing then I'm certainly going to address that thing because I wouldn't want a third
one to pass because there's only so many investor meetings so I would have to judge for myself is it
just because this person doesn't want to invest in it because a lot of times when we're talking
about movies like we're talking about they're not investing to make money they're investing to be a
part of something to make getting kind of reward and maybe make money but they're really looking
that the type of movie we're talking about is more of an awards movie independent movie
festival movie right so you're going to invest in that because you want to take your friends
to the movie theater and say see I gave those guys the money and they got to the theater and
it's this little movie that could so not so much about so that you got to understand the
mentality of why people are investing in movies in the first place and who you're talking to
so if they have a profile like I'm talking to the people who invested in Waking Ned Devine so when
they were talking to me about my movie they're not necessarily talking to me about my movie
thinking it's going to make money they're talking about maybe discovering somebody and putting them
on the scene because that's what they can brag about at the country club in Orange County with
it because their house is worth more than their their driveway is worth more than the movie we're
going to make for now their vacation is so they're it's not about that so it and if we're making a
studio movie then it is about making money it's 100 there's no other reason that they're making
it anymore except unless they're doing it through their little so-called little lines right that
they make their Prestige projects out of because everybody still wants to make Prestige projects
so that's kind of that's my approach is I don't I try not to
because I have a tendency look I as a person I can try to think what you're thinking as much
as I want and try to anticipate what you're thinking the best thing I can do is try to
ask the questions that I would ask and then leave the and then and work off of that because it's a
much more of a trust thing I can trust where I'm coming from and where the team is coming
from that I'm working with than necessarily trying to read your mind but what I can do is I can have
that checklist and if I took it out the right way in the first place then they wouldn't have
these ejections in the first place so I probably know that maybe this is a cinch that we shouldn't
have taken out then it probably shouldn't have gone out if it's that if it's that clear that
that's like that's never make any money well then I'm taking it to the wrong person probably
right because I should have been taken to somebody who would want to make an art movie
and work with either shelva get to hug them
shake hands with Idris Elba he played DJ at my party that's what they wanted that's what
they want let's suppose investor a says yes to part of your pitch I'll give you
half the money you asked for and you have six months to raise the rest of the money
how do you get the other half there might be a couple ways to do that now that I have somebody
willing to give me the money and I also probably have some incentive that means that I can get
somebody else some money back quickly and I have someone who's willing to take whatever seat I give
them because now they put themselves in the back seat because if I get whoever's the last money in
usually has control like in the sense of when they get their money back and all those
different types of things because they're going to essentially give the green light
so that party then now you've like look I've got somebody willing to do this this is the package
this is what we need so there's a lot of different ways there's also completion fund companies that
you could look at there's also now you actually have an ability to possibly depending on how
much they're really willing to work with you if they're willing to put it in a holding account
so that it's like you can't have access to it but it can be seen and be verified then that's that's
really that that's the golden ticket because now you can go to a distribution company and
say I have this much money I'll exchange with whatever that's the money in the account you
said whatever you want to get involved this is how much money I need here I forget the name of
it there's a couple of them finishing new market used to be a finishing company here in new market
they're not around anymore but a company like them I have half of my money I need this much
to get myself to this where my tax incentive would cover my money coming back because there's a point
where at certain point you don't need all of the money right you only need a certain percentage of
the money to get yourself through certain phases of the money so you need to be able to show them
that you can get the money get the money into the account and then secure it all into one thing and
make that a whole kind of juggling and that can be a Juggle and people sometimes fail in that process
because not being able to find you found one but now you need to be able to find another one and
it's half that could be a lot depending if we for us we'd be talking about 2.5
when people can't always find that money are they sometimes already in production well no they can't
go because remember your person said that they would only do it if I found the other money
so maybe they put it in a holding account and they let people see that it's there but they didn't let
us use it or touch it or play with it but maybe a bank would maybe consider giving us a loan
against that if they would guarantee if they would guarantee it maybe but that's kind of not what
they're offering us so we'd have to really find another investor to to secure that other match
essentially the eventually they're saying they'll be the last money in without being
they're saying they want to be the first money in but they really want to be the
last money in they want somebody else to say that they're willing to do it too
last money in is always first money out yeah on some level but it's really just
there still has it in for some reason if not they just give it
all to you because they probably add it because that's why you're talking to them
so there's something they want you to prove something more there's something that's not is
good enough it ain't quite good enough which is okay maybe they just don't want to carry
the burden right now maybe they have it but they they they promise our daughter's getting married
next year and she's going to get a five million dollar wedding so there you go they're that rich.