Monday, March 21, 2011

Pitfalls, scammers, crooks and angels

Money. Everybody wants money. It's the stuff dreams are made of (borrowing Bogart's answer in the Maltese Falcon).

And movies take a little bit or alot. You can make 2 feature films for $10,000 like my friend Randy did (see under links) or you can make Avatar for around $300 million.  And everything in between.

I remember the first time my friend and I raised $650,000 for Ghostkeeper in 1980. Today's inflated equivalent would be around $1.7 million. We had six investors and each wrote us a check out of their checkbook. Just like I would write a check for $50.

The checks were the same as mine, pictures of mountains or animals or straight bank green pattern. But they were for around $100,000 each. There's an interesting story about this wherein I almost lost the movie. I'll save it for the end of this blog.

How do you ask for $1.9? You say "I need $1.9 million very much."

To be honest, I'm not that good at raising it myself, if I was I wouldn't be a filmmaker. Very few of us are able to lie, for one thing. Maybe it's an artsy thing. And there are some who are good at it. My friend was really more responsible for getting the $650,000 and I was the color guy, you know, the artsy type who talks about images and pacing and atmosphere.

He was one of those who could raise money and he could talk investors into anything. And in fact he did.

The fact is that most producers who raise money will say or do anything to get it. They are scam artists, crooks and sometimes brilliant. And filmmakers need them. Neither really care for each other, but without each other, they're nothing.

I know, you're saying that I'm saying that you gotta have a crook to find money?

Well, yes.

But with a little bit of honesty if you can find them, and someone you can almost trust. There are honest producers, but they're mostly rich guys anyways and even they would rather you use someone else's money than their own.

Good producers are a little bit of con men, always have been and still are. How else can you sell a dream? You can't show an investor a movie, you have to have him imagine it with the help of a screenplay and a few storyboards and maybe even a 2 minute trailer. And it's no real indication if the movie will be good or if it will even get made.

So first you better know how to tell a good story. And good producers can do that. A friend of mine describes the best pick is "a guy (or girl) with a cheap cellphone and rent due. And if you don't believe me, read bios of producers, they will literally sell their mothers.

So what do they get out of it? Same as a car salesman, a commission. And the feeling that they raised the money, it's an ego thing too. And they help a filmmaker realize his or her dream.

But sometimes they can stab you in the back. Like Ghostkeeper, where our investment was a 100% tax shelter. But unknown to me, the investors also signed a loan agreement. That's the best of two worlds, if the movie flops, they get paid. If the movie makes money they get paid.

While that sounds great there's one big issue here; once the investor pays into a tax shelter that money, by government rules, has to be at risk. If it makes no money, the investor wins as he gets 100% of the shelter. Having a loan agreement also is actually against the law, you can't have it both ways, a tax shelter and a loan.

So I was called to a meeting where the investors decided to take the film over from me. All of a sudden I was alone. I hadn't repaid the "loan" because I was never told there was a loan and they had it in their loan contract that they could take over.

But I knew one thing. They couldn't have it both ways.

So I answered them by saying I would call Revenue Canada (same as IRS) and ask them what they thought. Naturally all investors knew what the tax guys would say, since they already filed for their tax shelters. They would say "you just broke the law".

It was over as fast as it began. The film remained mine.

And you know what, at least two of the investors still talk to me, we even have lunch when I'm back in Canada.

Can't live with them, can't live without them.

So Monday I begin talking to people who can recommend me to people who know people who can get money or find money from someone else.

And then there's angels.

(Thurs: More on crooks and angels)

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