Below is Part 2 of 4 in my PPM series on FilmProposals.com:
Now that you know what a Private Placement Memorandum is, and how it can help you raise money from Film Investors, let’s look at the contents of a Film PPM. There are 10 sections that make up your independent film PPM. The first section of the document, Summary of the Offering, is the most comprehensive and will be the first impression you make with film investors. It is where you first outline your Company, Film and Financial details.
The following represents a list of all of the details that make up your Summary of the Offering:
Name of offering entity (LP, LLC or corporation)
Phone Number and Fax Number
State in which entity is formed (or to be formed)
If already formed, date of formation
If not formed, will it be formed before or after start of offering
Purpose of Offering Entity
For most of you, the production of a feature film
Name of Film
If this is a working title, you should specify this
This includes Executive Producers as well
Any Cast attached
Size of Unit
($ per unit, interest or share)
Number of units to be sold
Size of total offering
Size of minimum investment
Payback %’s to investors (if applicable)
Any interest payable to investors (if applicable)
Is the offer available to non-accredited investors?
Impound or non-impound
(money escrowed until certain level of investment reached)
Commissions and/or Fees (due diligence fees and finders fees)
A list of any selling brokers
Is there a selling agreement with a broker?
States, Countries where Units are offered
Name of Manager(s) and position(s)
If Manager is an entity, the Owner and operator of Manager
Are resumes available for people mentioned above
If this is an existing entity, divulge any info on prior projects (that are related to the offering)
Businesses, financial data, copy of all governing documents
Identity of any predecessor entities and some summary info regarding how much money raised and what proceeds used for.
If the offering entity already exists, do they have any financial statements?
If the manager of the offering entity is an entity itself, are there any financial statements for it?
Although this is just the first section of the PPM, if you can answer the majority of these questions, then chances are, you are ready to put together a meaningful business proposal for your film. If you aren’t sure about these questions, or are on the fence about certain answers, then you are NOT ready to approach investors about your film. You may have a screenplay you believe in, but you do not yet have a clear financial plan. Nor will you be able to respond to a savvy investor who will ask you these questions.
Do not despair, answers to your questions are out there. Or, if you know the answer and just happen to be on the fence about one of the questions – there are people out there willing to share their experiences and knowledge with you. However, they are not lining up to come to you. If you are making an independent film, it is time to get in that mindset – which means YOU need to make it happen. Seek these answers and experienced producers out. And never get discouraged by a cold shoulder or a negative response. All it takes is one positive response.