Hello Steve. I think it is important to distinguish between funding your production/entertainment company and individual projects, such as the screenplay you mentioned.
Since screenplays and independent movies are generally considered to be high-risk undertakings, I would recommend forming a separate entity for each of these projects and solicit funding accordingly. Since entertainment projects typically have a very limited lifespan, this will make it easier to manage them.
While there are some VCs that entertain funding requests for entertainment projects such as independent movies, if you don’t have a long-standing track record in the industry, I don’t think that VCs are the most suitable capital resource for you.
I would be very surprised if there weren’t a number of state agencies and support groups that facilitate independent entertainment projects in California. Here in Florida, the governor’s office has a special entertainment commissioner that regularly hosts workshops and symposiums with industry leaders, entertainment lawyers, representatives of the studio and TV network landscape, and independent filmmakers. Besides valuable advice and networking some of these agencies offer funding of up to 45% of the total production costs.
Depending on your capital requirements, doing a private placement or Regulation D offering might also be a viable option to fund individual entertainment project. A recent change in Florida tax laws enables investors to write off a certain amount of their investment in entertainment-related projects before they actually incur any losses, which offers additional incentives to investors in that field. (Check the California tax code).
I guess my point is that there are many viable alternatives to soliciting funding from VCs and so called angel investors. We have recently completed two private placements for independent movie projects both of which secured distribution and achieved limited release.
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