Afternoon everyone – hope you’re all out enjoying the fabulous weather.
After last week’s email, we had around 73 responses (~10% of the 700+ total who have invested). 72 were very, very positive, and 1 wasn’t great. So many greait and valid points were raised that i thought it best to pull them all together into one message as it will save time and hopefully address many issues – perhaps ones you hadn’t considered but someone else had.
More than two thirds of those people who replied actually offered to increase (double or triple) their original investments, which was an incredible surprise.
Does the team believe that sufficient extra funding will come in as quickly as the first tranche, or at least in time for the newly proposed dates?
If there is a significant delay, is there any risk of losing the momentum of making and releasing the film within a reasonable memory (public’s) timeframe of the event(s) that it portrays?
Is the potential for the investors still at least as good as originally expected?Presumably the ~1 year for a possible ROI will now be extended?
We are confident that the funding will come in time (4-8 weeks), even though the initial development capital was almost an explosive pattern in places – the nature of doing it publicly is very different to private fundraising, naturally. That confidence comes from offers from people who have been in contact already, the publicity we’ve received and the dicussions already underway about future film funding. Raising 150k isn’t easy by any standard, but its not a large amount of money in investment circles (in fact, it is often too low for many serious investors to consider as they want a higher return and it costs them more in paperwork). We have several options: angel networks & HNWs, pre-sales distribution deal, bank loan (e.g. backed by BBC bond) or more publicity, to name a few.
There is a risk of losing momentum, and it’s something i’m concerned about. Confidence and faith in what we’re doing is absolutely paramount, especially as movie productions are fraught with divas from all departments walking off and bad-mouthing things in a fit of tantrum. We have the weight of 700+ people’s confidence on our shoulders and that’s not to be taken lightly – we have made a commitment to deliver, and *actually* deliver it, not just talk about it. Without that delivery, we won’t be able to get the funding we need for the next 6 movies. I fired the director and lead actor for that reason; confidence in the quality of the movie was slipping. Without the belief in a quality product, sales and biz dev opportunities dive.
The movie series is topical (i.e. related to the credit crunch/recession) so we will only be able to achieve the maximum publicity and interest in the midst of the same period, as opposed to a historical portrayal several years on. We’re all very sensitive to the recession’s lifespan, but i think it’s a fair bet that, just like the previous ones, it will last a lot longer than we hope – particularly with the PM’s 2nd round of public borrowing.
We believe the return will actually be better with a higher quality product, and it will certainly give us more room for publicity and telling a grander story. With more investment in the product itself, we’ll also have more resources for PR and marketing, which will both lead to a wider source of distribution possibilities (i.e. revenue). The more money the film makes, the more return investors make.
The ROI period is set to begin from the date of screening, so the time period for that aren’t being changed. We’d be perfectly happy to look at modifying it if it’s something the majority of people wanted.
My only concern would be to protect your initial drive, interest & reasons for setting up this venture. I realise extra money can be put to great use and having decent distribution would help greatly, however there is often a cost to pay. I’m only happy that further investment is agreed if the following is applied (I’m sure you have thoughts and care more passionately about these things than I do, so apologies for the directness of my points/thoughts):
1) It is absolutely essential & transparent which companies, investors and distributors etc. are involved for me. I want to know the sponsor of the partnership within each company and their reason for being involved with the project.
2) External investments have to be agreed in percentage terms with favourable bias to the original investments and the guys & gals working on the project if deemed successful (this should be factored into any deal, as they bought into something different at the start). Larger organisations will not need to work as hard to come up with great results as they have controls and structures in place already. I believe ‘they’ are buying into the project ‘not’ the other way around.
3) Based on the point above this should mean the little guys don’t have to foot the corporate losses and I don’t want them swallow up the project either, its great they’re involved but they need to have a different mentality and approach before coming on board.
4) I’m concerned by the disregarding members of the team when better options come along. I understand that we want the best to make the best, but these options weren’t always around when this was a small project, suddenly they are? I hope this is being carried out correctly when it is ‘needed’ and I have to question why some people were good enough but aren’t now? I would also be wary of these sorts of decisions being ‘enforced’ by investors; they simply can’t have that control.
5) It brings me to me last point; whatever level of investment is sort or offered it must be clear they need to ‘buy in’ to the idea and concept of this co-op. Therefore I would hope that you and the team stand strong and keep in full control of the film. Because of how this concept was put together, I don’t feel the need for extra help. The best film that can be made should be made with the resource available, whatever that might be. As an idea for the future (maybe not the first film) maybe the companies that are interested might asked to think along the same line as you, by nurturing their employees by including young hopefuls and talents into the project.
1) Of course. All of these are available for inspection whenever you want to look at them and/or talk about it. The quickest way is to give me a call and/or an email, or just pop down to Trinity Road for a drink and a chat. We’d value scrutiny, feedback and advice on what we’re doing.
2/3) Totally agreed. Favourable bias to the original funders is an absolute red line we are not budging on when it comes to external partners. Anyone who contributes additional finance MUST respect those who took the leap of faith first.
4) Managing the democratic needs of investors in a fair and ethical way is a tricky balance as management also needs to be autonomous and execute decisions it believes are right, and so many projects suffer such destructive interference from overbearing investors – we’re trying to address everyone but looking to make the right decisions, some of which are initially painful. I took the decision to fire the original director because he was impossible to work with and was trying to make a different film that was, in essence, crap. Many of the others who were removed were also compromising the quality as we had been so focused on getting something to market as soon as we could to satisfy confidence in the project, whereas now we have re-focused on getting the right people to do the best job. It was actually just a case of re-positioning people who were better for the job – the new director was recommended by the camera supplier, who also has come on board as the DoP. I’m aware that there is always someone or something better around the corner, but in this case i’m happy that we have the best team we could possibly get with the resources we have.
5) Totally agreed – strong leadership in tough times, often against advice, is what creates amazing things. Great ideas live and die by how they are realised and executed, or they just stay vapourware. We’re hoping that people will see out example and follow, as they already seem to be doing in their own way.
Regarding the external fundraising and subsequent growth of your team, I’m all for the idea in theory as long is has no adverse affect on the finances of current investors. If anything it does sound as if the financial side of the project will be improved by an expansion.
However, I do have one concern. The main thing which inspired me to want to invest in this film, was the fact that a lot of talented people who may otherwise have a long road to gaining valuable experience, are being given a chance to show what they’re made of. I totally appreciate the kind of step up a professional crew will give the production, but I just wanted to find out where that will leave those already onboard. Working alongside a professional crew would give your less time-served guys a great opportunity to learn but will it mean that they get less ‘real’ experience? I’d just like to know that those who’ve volunteered their time and passion for free won’t be sidelined now that a professional team is becoming a potentially affordable option.
You’ve said 99% of those involved are giving the expansion the thumbs up so I’m sure you’ve taken everyone’s best interests into account, but I’d just like to be reassured that everyone will remain equally valued and equally utilised.
We are doing everything we can to ensure that there is virtually no change to existing investors’ finances whatsoever, as any kind of dilution or damage would be a betrayal. The original agreement must stay in place, deliver the same return, and be totally guaranteed on paper. We’re figuring out ways to do that at Companies House but the bureaucracy is tricky.
A very good point, and one very close to our heart – we won’t sideline anyone. I like to think we’re promoting young talent already by what we’re doing at Trinity Road in terms of using the flat/office as a production studio – pumping out photoshoots, short movies, music videos, radio demos and more. The new team are very keen to keep crew numbers down on set for reasons of managing chaos and reducing costs (not to mention health & safety) but it’s an absolute stipulation in everyone’s contracts that the widest opportunity must be left open for inexperienced personnel to gain experience through working on the film. In reality it will mean that we have a “guestlist” of sorts (as well as a “crew B” list) for all the filming days where people can help out, managed by the 3rd assistant director.
I have invested some money about a £1000.00 . what i want to do is go further and reinvest in other projects you will be involved in , i mean movies, but for me to do that i have to wait and see how successful micheals resignation would be. then hopefully reinvest my money, if i am allowed to do that , i am not very familiar with investment rules when it comes to the film business,can you give more insight on this question what my position would be later.
Thank you from everyone for investing so much! It must have been a personal risk, and we won’t let you down. Anyone who puts in that kind of money has to be prioritised to some degree so they have the reassurance their money is going to work effectively. You are more than welcome to invest in the next project. In fact, the most important investments are the “micro” ones to help people explore ideas and incubate “pilot” projects so they can be visualised and commissioned. Budgets of £1000 – 5000 help people hire basic equipment, pay for transport and get props and effects that ultimately produce trailers and 30min videos that can be developed into a programme series and/or longer features.
We absolutely understand and expect that people want to see how MR looks before they invest in the next films – that’s what we’d all do too. It would depend on how much you wanted to invest to be honest, and would fall under typical investment etiquette. Each film production is a limited company with lifespan of around 5 years, with a product that incurs up-front costs and generates revenues. You’d need to have a private chat with us at Trinity Road – feel free!
As a current shareholder I would be willing to double my investment if the opportunity arose. I know this would only be £100, but out of acorns grow…..! Further if and when the opportunity comes for future cast auditions to take place, why not open them out to shareholders, we could make great extras.
Anyone who has invested in the film is more than welcome to come and be an extra – all you need to do is email Chloe (chloe [dot] waddington [at] michaelsresignation [dot] com), and she can get you registered into the database. Of course, you’re going to go to the top of the queue over anyone else because of how you’ve believed in us.
I think a 2nd share issue is probably the best way to go and I would probably purchase more shares on this basis.
On what you’ve said about the bother you had with the initial team that you were using, I assume your be doing a major overhaul for your website, it can’t be the best thing for possible investors to see.
We probably won’t do a share issue per se – the most realistic option in the timeframe is to put the word out amongst wealthy people we know to see if they’re interested, or know others who might be. We’ll arrange the deal and then put all the paperwork into Companies House together (all but the majority 30% producer shareholding are currently held in Treasury) as that will allow us the maximum flexibility, and importantly, allow us to protect the interests of existing shareholders.
And yes, there will be an overhaul of the website! 
The one that’s up now was done in a day to get something up there, and uses the Wordpress CMS system. We’ll move the “in production” theme to an archive, and then get it into a more interactive “feature film-like” thing.
I read your email and accept option B however I feel it would be nice to ask shareholders first if they would like to increase their shares before you ask others. I would be interested in knowing how you feel about this proposition.
I feel great about it! We never thought anyone would want to put more in, but if they are interested in doing that, then great! It would only be fair to give initial investors first refusal – please feel free to talk to us about it as that is exactly how we’d want to go about it. It’s the only way really.
I am happy for you to choose option B and raise additional capital as long as it does not dilute my initial shareholding. So with that in mind, I believe that existing shareholders should be given the opportunity perhaps even to increase their shareholding by contributing additional amount and thus help you raise part of the required £150k from existing shareholders. I would like to invest an additional £50 raising my total investment to £100.
By the way, I really liked your initial model of raising money from the public where people can invest as much or as little as they want. So I would advise that in raising the additional £150k keep the structure similar.
I’m not sure we could raise 150k in the timeframe through publicity alone (it was hard enough doing 50k!), although we don’t have to necessarily rule it out. To do that we’d have to get Tv coverage in the very least as press wouldn’t go far enough. We’re always up for the challenge, although we need to find the fastest way to deliver. It could be finding a wealthy individual, or just getting a good feature on the BBC at 8pm. Either way, all that matters is the director has 150k to get it done so we can get to market and make revenues to return the original investments.
We don’t believe there will be any dilution, and i’ll fight to make sure there isn’t (see previous point). We’re happy for any existing shareholders to contribute to the 150k.
From your email it seems like you have made some very good progress but things haven’t gone your way as planned. After the second round of investment I would be interested in investing some more money in your second film. However, this will depend on the production and commercial success of MR. in other words, MR needs to be produced and financial success from this needs to distributed to the shareholders before I make any investment in your second film.
I would like a bit more of a regular update and looking for ward to receive the news that you have finished the production on MR in September / October time.
I understand thogh that this would not devalue the shares I have already?
Things never go your way during production! Planning for the expected is tricky enough, but the unexpected (and problems) is where your time almost always ends up being spent. Working on MR means having to deal with a LOT of change every day, and its certainly not suited to anyone with a sensitive temperament! We have to respond instantly and do things on a timeframe that’s massively condensed in comparison to other businesses, and it requires a certain resilience.
A more regular update is essential and we’ve got that scheduled on the wall diary for every fortnight – people get very jumpy when things go quiet or questions/emails aren’t answered. Things are so busy that we can only ask you to bear with us while we cope with all the things we need to do. If in doubt, get on the phone or come down to Tooting for a beer in the sun.
Do you guys work on weekends by any chance? I would love to pop by the offices at some point…
We definitely do – it’s 24/7 here. We tend to spend the weekends filming and creating material for the young talent we’re working with to make as much use out of the resources we have. The flat now doubles as a photographic studio, editing suite, filming location, radio station and music recording venue! There are always 6 or 7 people here a night and anyone who wants to bring a laptop over, get involved in holding a boom mic or needs things done when they don’t otherwise have the money is welcome. Just drop us a line and let us know when you want to pop over and we’ll get some extra food in!
Alex
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