If you are an indie film investor – or a filmmaker seeking to understand how to finance your film, you’ll need to learn the concept of: The Waterfall. Top film finance companies create significant leverage for themselves by capitalizing on this concept in a more strategic way than the creative community that delivers the content. While your most important job remains to create top quality content, it’s wise to time to get a better grounding of the film finance terms that will make a different in your financial life – and ability to gain financing for your next project.
Here are three takeaways from our brief tutorial on film finance.
1. Pay attention to how much you offer to cover expenses for your distributors and sales agents.
2. Educate your stakeholders on their placement within The Waterfall to make sure there are no misunderstandings or hurt feelings when the checks (finally) start to arrive.
3. Make sure to run a sample Waterfall on your project before you get started to get a realistic sense of how much each stakeholder stands to gain. And remember, our example doesn’t even include film loans or taxes!
Need more than those three takeaways? Check out the full eight-minute tutorial on The Waterfall/Film Finance below.