Many options exist to raise money for a film funding project. Issuing a private placement memorandum (PPM) lets your film company sell shares to “passive investors” (those who invest but take no active role in the film) in order to raise money needed for successful production. If other financing sources are difficult to come by, selling shares in the company may be the best means for raising capital.
Why Use a PPM for Raising Film Finance?
If selling shares in your independent film business, a Private Placement Memorandum is the safest way to raise funding. The PPM offers the best legal protection possible to reduce your risk of being successfully sued by investors in the case that the company goes under. The PPM provides a full and complete disclosure of all the potential risks (including the risks that you cannot find a distributor for the film and that it never achieves commercial success such as theatrical release) associated with the film project investment, making it difficult for investors to claim that they were not adequately warned.
Using a Private Placement Memorandum also shows that you are working above the board and take your responsibility to your potential investors seriously. Experienced investors, who have put money into independent films before, will be much more likely to work with you because of this.
If you consider writing a private placement offering for your film, consult with a licensed entertainment securities lawyer to best structure the offering and to understand the securities laws and guidelines you must operate within.
Other Sources to Raise Film Financing
Government support, whether in the form of tax credits, loan support, or subsidies, can be a boon for independent film producers depending on their geographic location.
The film production budget may be further reduced by seeking service discounts or even bartering with vendors (for example, giving product placement in the film in exchange for needed equipment or supplies).
Co-producing the film with another company can share the capital raising burden, perhaps reducing the need for external funding.
Grants for a small film project may exist, especially if the goals are artistic rather than commercial success.
Exhaust all of these potential options to reduce the cost of your film and how much you need to raise for film financing.
Download Our PPM Template
If you want to create your own PPM quickly and easily, our private placement memorandum template allows you to develop a professional PPM in hours or days, not weeks or months.
Click here to learn more.
OR, Let Us Develop Your PPM
Our consultants can create your PPM for you. We will make sure your PPM is sound and ready for prospective investors so you can continue to focus on running your business. Over the past decade, we have created PPMs for hundreds of entrepreneurs like you.
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