PRODUCTION FINANCING
In certain select cases, the Sam Houston Southwest Film Investment Fund (SHSWFIF) may consider providing production equity toward the budgets of superlative feature film projects that are in the earliest stages of development yet show exceptional creative and commercial potential.
Upon approval, SHSWFIF will jointly set the film’s budget and begin the packaging process with the submitting producer(s) (i.e., the selection of a “name” director and “name” acting talent on an underwriting talent offers basis). The production equity is then provided via a Private Placement Memorandum (PPM) drafted by SHSWFIF’s securities attorneys.
For purposes of clarification, SHSWFIF typically only considers proposed motion picture projects submitted by experienced producers and/or production entities (collectively, the “Producer”) that pass SHSWFIF’s strict due diligence process. On rare occasions, the Fund may also consider and subsequently seek to acquire exceptional properties submitted directly by a screenwriter’s representatives (please note that SHSWFIF cannot review unsolicited submissions).
So if you are a Producer who controls the rights to a marketable, quality motion picture property that is actively seeking production equity, and you have not yet taken it to the PPM stage, SHSWFIF views this situation as a unique opportunity and would be interested in considering it for possible investment as long as it suits SHSWFIF’s current Project Initiatives as described on our Homepage.
In the event your project is ultimately approved for funding and equity is in place, SHSWFIF will underwrite offers to mutually approved actors and directors by negotiating directly with a talent’s designated representative. Underwriting such offers is to secure an option for a mutually agreed upon term during which the PPM is established. Once bankable name talent is attached, risk is mitigated, and SHSWFIF can move on to financing the project’s physical production and, if applicable, backstopping its P&A (refer to P&A Financing).
For purposes of clarification, SHSWFIF considers a “bankable” or “name” actor (or director) someone who can help mitigate risk based on a number of important factors, such as whether they’re best suited for a particular role; whether their so-called “marquee value” translates to overseas markets; whether their past box office record indicates that they can “open” or “carry” a film based on their name alone; what their current IMDbPro STARmeter rating might be and has their “star” faded? Finally, if SHSWFIF’s development team determines that they’re not widely considered “A-list”, can they possibly be paired with one or more fellow name actors, thereby elevating the combined marquee value of the ensemble cast?
The entire funding process for an approved project can take from 4 to 6 months. SHSWFIF targets the theatrical release of the motion picture no later than 12 months from start of principal photography. SHSWFIF’s objective is to recapture its equity investment within 12 months of a picture’s premiere date and after recouping P&A plus coupon.
Production Financing Submission Check List
In order for a project to be considered for Production Financing, the following materials, typically referred to as a “Producer’s Package”, must be provided to SHSWFIF electronically (PDF files preferred) by the Producer at the time of Producer’s initial submission so that the project can be thoroughly vetted:
- A copy of the completed US Copyright and WGA registered screenplay;
- The screenplay’s synopsis and/or logline;
- A detailed list of the project’s current attachments;
- The project’s executive summary and/or motion picture project overview;
- If available, the proposed project’s line-item budget and/or “top sheet”; and
- If the submission is unsolicited, a signed copy of the Fund’s Idea Submission Form.
Other materials that may be requested by SHSWFIF in its sole discretion may include, but may not be limited to, the following:
- Copies of any and all third party agreements the Producer has caused to be executed to date;
- Copies of any and all signed letters of intent (LOI’s) from prospective above-the-line (ATL) talent, if available;
- The film’s distribution plan with a prints & advertising (P&A) budget;
- Foreign sales estimates, if available;
- The film’s preliminary production schedule;
- The Producer’s proposed drawdown schedule for use of funds;
- Producer’s so-called “wish lists” for ATL talent and/or below-the-line (BTL) personnel;
- “Chain-of-title” for the submitted property, including a legal opinion letter regarding underlying rights from the Producer’s attorney, etc.; and
- Any other relevant items the Producer believes may assist SHSWFIF in determining the creative and/or commercial viability of its submission.
