FUNDING AGAINST THE ALGORITHM: A Recap on the State of Indie Film Financing

By Epiphany James

“If you want to make Emily in Paris, you can tap into Netflix’s billions, but I don’t want to make Emily in Paris.” Mynette Louie (producer, SWALLOW) shares during Sundance Co//ab’s Independent Film Financing: Past, Present, Future panel discussion. July saw two separate panels on independent film financing. This first one, hosted by Sundance Collab, and then Money Matters: Fundraising for Independent Film hosted by Film Fatale. As the industry continues to clamor for a “new normal” filmmakers are wondering how to creatively finance their films all while competing against a growing demand for content that fits the algorithm.

Last December Dear Producer covered a 5-panel series discussing the impact of the global pandemic on the way we work within the independent film industry, including how we raise financing. Has the answer become any more clear seven months later? In case you missed Sundance Collab and Film Fatale’s discussions, here’s our recap of both panels’ highlights.

INDEPENDENT FILM FINANCING: PAST, PRESENT, FUTURE – SUNDANCE CO//AB
We are living in a time in our industry where positive shifts are happening simultaneously with the negative. On the positive side, we have the recent reckoning of systemic inequities in filmmaking, along with the drive for more content creation thanks to numerous new streamers creating demand. On the negative side, the sustained impact of the global pandemic continues to create uncertainty while the current economic instability dries up private equity resources in an already scarce pond. This discussion explores creative financing options for both fiction and documentary features from the perspective of producers who have sold films at the Sundance Film Festival in the last several years. 

This panel was moderated by Carrie Lozano (Director of the Sundance Institute’s Documentary and Film Artist Programs) who was joined by panelists Ina Finchman (producer, FIRE OF LOVE), Mynette Louie (producer, SWALLOW), and Nikkia Moulterie (producer, NANNY). 

Key Takeaways:

“I don’t really feel we know yet how the pandemic will transform financing and film production,” replies Ina Finchman (producer, FIRE OF LOVE) when asked about how the pandemic has impacted indie filmmaking. She goes on to share how audiences are still not coming back to cinemas the way they did pre-pandemic. Everyone, it seems, has become used to ordering food and watching streamers at home. 

Moderator Carrie Lozano adds to Ina’s observation by sharing that even in the dense, culturally vibrant Bay Area where she lives, a lot of theaters are shutting down, some of which had been a part of the community for over 100 years. 

When asked what the greatest challenge facing indie producers right now is, Mynette Louie (producer, SWALLOW) states that finding equity represents the largest challenge. “Equity is drying up, largely due to the economy and the pandemic.” She goes on to share that while distributors used to acquire finished films at festivals, nowadays they are coming on earlier and funding at the script stage. The issue with this shift is that it creates an ecosystem where only certain types of films are getting funding, meaning more algorithmic and celebrity-driven content. This makes it difficult for genre-straddling films like her 2019 feature SWALLOW to find necessary financial backing. 

Nikkia Moulterie (producer, NANNY) adds to this sentiment, “There used to be all the whispers around Sundance about what would be bought by who. Now so many companies hardly have room on their slate. If they are at Sundance now they might have room to buy one drama.” She goes on to liken festivals to more of a filmmaker’s showcase, a place for displaying work for others to see, but less of a viable marketplace to gain distribution. 

Ina, joining in from Canada, offers that perhaps it comes down to looking for out-of-the-box options such as international presales and working with partners in other parts of the world.

“In some ways, I don’t know that there was ever not a difficult time for independent producers,” Carrie observes. This makes a resonant point. Being an independent film producer has always called for a certain level of resilience and tenacity to place smaller-budget films in the marketplace alongside multi-million, and now billion, dollar behemoths. 

So where do we look for funding in this shifting landscape? One pathway offered is development programs. Ina shares that she personally benefited from programs such as Sundance Labs, Public Broadcasters providing development money, Field of Vision, and Creative Capital. She also mentions that NBC Universal has a development grant and that Gotham and HBO are now co-sponsoring a development grant for $50,000 in the documentary space. 

Mynette chimes in to provide insights on the more narrative side of film financing, “If you have a film that is about a social issue, I would advise going individually to those nonprofits and seeing if you could get money from them.” Otherwise, you’re left looking for one high-net-worth individual who can put in 30K to pay for the script, a casting director, and a budget and board. 

Adding to the benefits of applying for a lab, Nikkia shares that her feature NANNY enjoyed advantages from her being a part of the Sundance Creative Producers Lab. She goes on to reveal that not only did the mentor she was placed with through the lab end up coming on board as an equity financier, but she also joined the team as a producer. Having an established producer attached provided a much-needed stamp of approval since NANNY was both Nikkia and the director’s first feature.

While labs are helpful, oftentimes producers don’t have the privilege of being in a lab while raising funds, which begs the question, how do you ask potential financiers for the money? Ina starts off by sharing “Don’t be afraid, but know who [you are speaking to] and why you’re asking for this money.”

Mynette agrees and adds further that it comes down to constantly researching who is financing right now, and who is looking for certain types of films. “It involves constantly reading the trades, talking to other producers, distributors, and agents that specialize in financing at all the major studios,” going on to say that, “it’s worthwhile looking to the left and right, instead of up all the time [as well].” 

“Everything that’s been said, plus access, plus knowing the right people, being able to even get the call to share about this amazing thing that you have to offer them,” Nikkia adds. Reminding us of the adage, “It’s all about who you know.” In the early days especially, ask your network who they know. A friend of a friend could be the bridge to your next financier. 

To wrap the discussion up, Carrie asks the panelists what they are optimistic about moving forward. Nikkia shares first, “I think the pandemic showed us as a community our strength in terms of coming together… I’m very optimistic that we’ve learned the value of each other and the need for collaboration within our communities.”

“I don’t have anything specific in mind that I’m optimistic about,” Mynette starts, “but I would like to embrace the change and the flux that is happening right now.” She goes on to make the point that it is in times of instability that progress really happens. Her hope is that what feels like a mess right now will turn into something much better in the long run. “I’m excited because producers, we love a challenge, and we love a pivot. It keeps us on our toes, and so I’m looking forward to the fun.”

Every industry panel covering the state of independent film producing has this one moment,  when a producer shares from their heart how much grit it takes to do their job well against all adversity. The “answer” to how we continue to do the work we love, regardless of which new and evolving issue faces us, comes down to this–dig your heels in, and keep digging. There is no alternative. 

MONEY MATTERS: FUNDRAISING FOR INDEPENDENT FILM
The constant search for funding is one of the hardest aspects of creating a film. Now, more than ever, who you know is vital for supporting your projects from raising development funds all the way to securing distribution. As private equity resources become more scarce, what other options are there? This discussion demystifies the process of funding your independent film in today’s landscape from the perspective of both producers and investors in the industry. 

This panel was moderated by Fanny Grande (CEO, Avenida) and joined by panelists Tamir Muhammad (founder, Populace), Viviana Zarragoitia (VP, Three Point Capital), and (again) Mynette Louie (Producer, SWALLOW).

Key Takeaways:

From the onset of the panel, the adage, “Your network is your net worth,” is introduced as a central theme for getting indie films into the world for people to see. So, how does one grow the value of their network? Mynette Louie (Producer, SWALLOW) offers project markets as an underused opportunity to meet key players in the industry. “A lot of film festivals have these project markets attached to it, like Gotham Film Week, Film Independent Fast Track, Rotterdam Lab, or Berlin Co-Production Market.” She goes on to say, “I think [project markets] are one of the best ways for filmmakers starting out to meet with financiers, sales agents, and programmers.”

Moderator, Fanny Grande, asks Mynette if her strategy has evolved now that she’s further into her career. “You know, the kind of projects that I like are little cross-genre films that don’t really fit into a box or an algorithm.” She goes on to explain how, now that she knows distributors personally, it makes it simpler for her to get distribution for her more out-of-the-box films, like SWALLOW. 

Tamir Muhammad (founder, Populace) recently signed a first look deal with Warner Brothers and HBO. What did his network mean to him in getting to this point in his career? “I’ve had a long-standing relationship with both companies in various and different capacities. [This deal] is a continuation of that relationship.” He also goes on to share how even though he has a first look deal, his concepts still have to go through the same process and algorithms the companies use to determine whether or not the idea is viable. 

Fanny notes how Tamir’s show RANDOM ACTS OF FLYNESS seems to fall under the cross-genre, out-of-the-box umbrella that Mynette was speaking to, so how did he convince studio executives of this original concept? “As a producer, you’re always trying to look for projects that you think are going to service your partner in a way that makes the deal make sense, but at the same time, to what Mynette is speaking to, [is also] groundbreaking and original.” 

For Tamir, this process involved knowing his subject and knowing how to frame it to get it made. “I’ve known [Terence Nance] for 15 years… I asked him what his take on the news was. He gave an answer, and we had a show.” Tamir is first to tell you that RANDOM ACTS OF FLYNESS is not a news show per se, but when it was time to pitch, this was the best wording to ground the concept in a way that executives would understand.

His process for getting such a unique concept through? He first introduced Terence to the executives as a singular voice. Once they were sold on Terence it became a conversation of, “You know that guy Terence you love? By the way, this is his version of the news.” Tamir’s strategy here reinforces the importance of establishing relationships first, then knowing how to introduce those various relationships in order to get your concepts funded.

But what if your network only takes you so far, and you still need more funding for your feature? Viviana Zarragoitia (VP, Three Point Capital) steps in to share the power of debt financing with the attendees. Her company is a debt financier for the film and TV space, providing loans against either a tax incentive or distribution contract. While typically they are looking for proof that you have other funding attached, they have started to provide full debt financing to projects that already have distribution contracts. “We’ve been doing more of those since the pandemic started because there have been more projects attached that have pre-sales… a lot of distributors are looking to buy projects ahead of time to fill their pipeline,” noted Viviana. 

Another opportunity to fund your film comes through the sweat and grit of a crowdfunding campaign. Fanny, crowdfunding expert and founder of the crowdfunding platform Support Our Story, chimes in with her perspective. “After ten years of doing this… every time I do a crowdfunding campaign, it’s truly from a mission statement.” 

Viviana adds, “I think people underestimate how difficult it is to crowdfund,” noting how it can feel like a full-time job to run a successful campaign. “People used to give us a lot of money to run their campaigns,” agrees Fanny. This is a large part of why she created Share Your Story. Coaching, templates, and tutorials are all included in the platform for free when you run a campaign. Fanny explains, “With the way we’ve set up the platform you don’t have to hire a team anymore,” then sharing, “we just launched three months ago [and already] we’ve raised half a million dollars for projects.”

The pandemic has undoubtedly impacted how independent producers raise financing, but has it also impacted how the films themselves are being made? Viviana provides her perspective first, “I would say yes. Before the pandemic, we would have a handful of prestige projects that would be independently financed. Now it seems that [the industry] is very much driven by what distributors are buying.” She goes on to share how this correlates to more action and thriller projects getting financed. The reality is that these types of genre films are easier to lock in talent and then secure a pre-sale with a distributor. Projects like Mynette mentioned earlier are not as popular on the presale market, leaving them struggling to lock in both development funds and distribution. “I also think that prestige projects used to be the special projects [to get] talent [onboard] and now talent can just go to Apple, Netflix, or Amazon and get whatever they want made.” 

Mynette adds, “By the way, it’s because of all of the streaming content out there that it’s hard for independent filmmakers to get talent. Not even attached to your movie, but to get them to [read]. They’re so busy shooting all the time. The casting process is taking way longer than it used to.” 

Walking away from these panels, there’s a sense that even across several acclaimed producers who have successfully made content during the pandemic, they are still uncertain what the best path forward looks like. With logistics such as cast, fundraising, and locking distribution getting more tricky versus less so, it seems things really haven’t shifted that much since last December. We’re all still walking in the dark, by the light of a single flashlight, hoping it will lead us home to more stable ground. 

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