Roadmap for the Balanced Producer
We in the film industry are always seeking the money in its myriad forms – from soft money, to mezzanine, to the all important king of all money – PRIVATE EQUITY. When we do have the great fortune of attracting private equity to our projects, what are the current expectations of the investor regarding his potential Return on Investment (ROI) given our current economic climate?
I believe the following points/questions can guide you and offer some sound suggestions when structuring and negotiating with that potential equity investor(s):
- What is the percentage of equity vs soft money?
- How quickly can the investor get his money back?
- How secure is the money being invested?
- What is the risk profile?
- Can you make a sound case for ROI of 10%-12% within 24 -36 months?
- Do you have a viable marketing strategy tailored to your target audience(s)?
- Do you have distribution of some form in place before you commence spending your investors’ money?
To get the serious attention of any equity investor, you have to think and talk like one yourself. The more you can relate to them in their terms and with their best interest in the forefront, the more likely you are to successfully close a transaction with them.