A Brief Introduction About Film Investor Agreement
Film making isn’t just about taking care of the entire project as a filmmaker, but you have to become a businessman. Signing contracts is an important part of being a filmmaker. You need to gather investors for your movie if you want to get a good budget. It might not be difficult to find out investors if you have good screenplay and planning, but you should also focus on having a film investor agreement with the investors.
Who Takes the Film Investor Agreement?
This agreement is taken by the filmmaker and investors. This agreement should be signed with every single investor of the film so that there won’t be any dispute afterward. Every investor also wants to sign such agreement as it is quite important when it comes to getting the share of profits from the film project.
Sometimes, there are rich businessmen who don’t have any knowledge of the films, but they still want to help independent filmmakers. Even though they already know that chances of earning huge profits are low, but they want to assure you if you have control of the film project. It should only be the film of filmmaker until it has been sold to the distributor, and this should be in the knowledge of investors.
[ Also Read: Production Contract ]
Purpose of the Film Investor Agreement – Why Do You Need It?
The film investor agreement helps you to find out the nature of your film financing. You come to know about your actions regarding film finance and budget. The investors put their trust in a filmmaker, and that’s why it is the responsibility of the latter to work as a businessman. You need to present a professional agreement to the investor who is designed for the protection of both film and money. So, it is quite important to have an agreement if you want the movie to be successful without any issues. By taking the help of the film investor contract, you can have trust in the investors and vice versa.
Contents of the Film Investor Agreement – Inclusions
There are various expenses while making a film, which includes distribution expenses, print, production, advertisement, and legal fees expenses. So, these costs should be mentioned in the clause, and only then it would be called a film investor contract. When the investor if providing 100% funds for the film, then the investor would get the money which he gave whomever the profit is earned by the film.
The first payment is made to the investor, and the rest of the money is divided between the filmmaker and investor. It is also necessary to state that producers of the movie would have approval and control over the financial and creative matters of the project. The investor won’t be buying the project, and that’s just an investment for them. That’s why the role of an investor is limited to earning profits. They can’t tell the filmmaker to do their job in a certain manner. That’s why these things should be mentioned in the agreement.
How to Draft Film Investor Agreement?
The key points of film investor agreement can protect the film, filmmaker, and investor. That’s why it should be made carefully by keeping all the necessary points in mind. With the help of a free investor contract template, it would be easier for you to draft an agreement. You can get an idea of all the necessary terms and conditions which should be included in it at every cost. You should call the lawyer if you don’t want to forget any important rules and obligations which should be added in the contract.
[ Also Read: Film Distribution Agreement ]
Negotiation Strategy
The negotiations can be made by the investors and filmmakers as per their requirements. In case of any dispute after the agreement has been signed, then it would only be resolved with the help of an attorney. No one can be forced to agree on the terms which haven’t been written in the agreement.
Benefits and Drawbacks of Film Investor Agreement
This agreement is beneficial for both filmmakers and investors as it signifies their position in the entire film project. Most of the time, the profit which comes through a movie is split 50-50% between the investor and filmmaker, and it depends upon their negotiations. Sometimes, the investors can ask for more profit, or if the filmmaker is well-known, then higher profit can be received by him. There aren’t any drawbacks to the agreement as both the parties are clear on their responsibilities and duties, and they only sign after checking their role in the project.
What Happens in Case of Violation?
You can look for a free investor contract template so that you can get an idea of the punishments one can get with the violation of the obligations and rules(1). Whenever an investor or the filmmaker doesn’t oblige to the agreement, then they have to pay for it, as mentioned in the contract.
Now you have known a lot about the agreement; you can get ahead to prepare a contract for your film project. You can check out the free investor agreement template with which you can get the whole idea of the agreement. It would let you know about the important clauses, rules, obligations you need to mention in the agreement. The format is also an important part that you can easily understand with the help of templates. Although there are numerous responsibilities and duties of a filmmaker, you shouldn’t ignore the paperwork.