In the case of more questions and/or needed clarifications, Horror Equity Fund is ready to answer. Our success is directly dependent on yours – we want you to understand everything about the journey we undertake together.
+ "FILM FINANCING" IS FULL OF CROOKS. HOW DO I KNOW I CAN TRUST YOU?
While there are no sure fire ways of guaranteeing our veracity, the HEF Equity Crowd Investing site is SEC compliant, and must meet certain standards for transparency and due diligence. We pride ourselves on being honest and trustworthy. Integrity and Ethics guide our choices and our discussions with any client or potential client. In the case of more questions and/or needed clarifications, HEF stands ready to answer. Don’t hesitate to ask anything.
+ WHO IS THE ISSUER?
The Issuer is the writer, the producer, or other copyright owner who submits the project to HEF. *
+ IS THERE AN APPLICATION FEE?
While we don't charge an application fee, we do charge a reader's fee that helps defray the costs of professional analysis of the material. *
+ DO YOU ACCEPT EVERY SCRIPT THAT YOU READ?
Not by a long shot. We're extremely selective. If HEF approves your project for inclusion you can be assured that we believe in its profit potential.
+ WHAT HAPPENS AFTER A SCRIPT HAS BEEN READ?
After our story department and creative executives give your script a “thumbs up”, a “Yes” letter goes out, inviting you to engage the process.
+ GREAT! I'M IN. NOW WHAT?
We charge a fee (fees not public knowledge now) for basic prep and listing package (see below for “accommodating” circumstances).*
This fee covers:
- Professional Coverage and Notes for Script;
- Prof. Prepared BUDGET (or review/revision of same if previously prepared) looking to sufficiency and reasonableness of same;
- Professional Preparation of Targeted Synopsis and log line;
- Prep of BASIC presentation materials (as appropriate: Photos, “look book”, cut teaser, etc.) (Note: out-of-pocket costs are borne by Issuer)*;
- “Personalized” Business Plan (Basic) for presentation to Distributors; *
- Posting & Set-up fee paid to SEC-compliant Platform ($XXXXX+ - fees not public knowledge now)
Value of Package: Approximately $15,000.00+ You also commit to paying for Deal Preparation (with lawyer(s), financial person(s), along with other HEF personnel) and four (4) months of campaign marketing for your Project by Horror Equity Fund on the Equity Crowd Investment platform. If “going to the crowd” does not happen for any reason at any time, then you are only required to pay the Deal Prep fee (no monthly marketing fee.) *
+ HOW MUCH IS THE MARKETING, AND WHAT DO I GET FOR THAT?
We gather material and devise a plan with both you and “the lawyers” to market your film to our aggregated horror fan and investor base. The charge is (fees not public knowledge now) per month for a total of $XXXXX (fees not public knowledge now). The Deal Prep fee is included (subsumed) if the marketing campaign goes forward. If it does not for any reason, then the mandated Deal Prep fee is $XXXXX (fees not public knowledge now). HEF may extend the marketing campaign time AT NO COST TO YOU depending upon circumstances! *
Although you must commit to that payment when you sign up, it is not payable to HEF until actual preparation for the crowd investing campaign begins (or at the time a decision for any reason not to proceed with such a campaign is made.) This is what allows your Project to reach potential investors and increase your chances of seeing your Project funded. Unlike many crowd funding/crowd investing sites and services where you're left to your own devices to market your offering, HEF does most of the heavy lifting. We know that most filmmakers are artists, and not salesmen. We do the marketing so that you can concentrate on the creative aspects of your project. And we confess sotto voce: Very special circumstances may be accommodated. Ask.
+ OKAY, SO I GET A LOT OF BANG FOR MY BUCK. DOES THAT COVER EVERYTHING?
While it includes the majority of expenditures, there may be a few secondary expenses.
For example: the package price does NOT include the following, some (if not all) of which can be provided at reduced prices*: LLC (or other appropriate legal entity) formation; Review of Invitation and Commitment letter by Issuer counsel; Cooperation of Issuer counsel in determining “Raise Terms” (for term sheet);
Review of marketing material and postings by Issuer's counsel; Videos created specifically for Issuer by HEF for marketing purposes; Personalization of HEF's prepared PPM (as needed).
+ YOU'VE GOT MY FIRST PAYMENT. WHAT'S DONE WITH MY PROJECT?
There are several steps prior to listing on the HEF Crowd Investing Site:
- The initial materials are prepared;
- The Prepared package is presented to Distributors for review;
- At their discretion, the Issuer makes adjustment to the package;
- A Distributor signs an LOI or MOU to distribute your film;
- The script and package is reviewed internally for funding at HEF, in whole or in part and perhaps in concert with a Crowd Investment Campaign.
- The package is then taken to our MONSTER ROOM.
+ OKAY, I'LL BITE. WHAT'S THE MONSTER ROOM?
The Monster Room is where carefully vetted and selected private equity investors are given the opportunity to directly invest in your project. They can opt to fully or partially fund your Project (or not.)
If that happens, congratulations! Your funding is complete! If however, they fund anything less that 100%, your Project continues on to the HEF Equity Crowd Funding Site.
+ YOU MENTIONED "NOTES" FROM DISTRIBUTORS. AM I REQUIRED TO MAKE CHANGES BASED ON THEIR SUGGESTIONS?
Never. If you get through our selection process that means we have faith that your Project has the quality and marketability to potentially become profitable. However, distribution is a crucial piece of the funding puzzle and if making adjustments to the script attracts a distributor, then it will likely increase your odds of attracting investors. We always HIGHLY recommend “hearing” what the Distributors say.
+ SO HOW DOES HEF MAKE THEIR MONEY?
HEF profits in a number of ways:
- HEF’s posted charges include an initial fee which is for assistance in designing, assembling and/or reviewing presentation materials deemed sufficient to present the film project to prospective distributors, sales agents and the like.
- HEF charges for marketing preparation, as well as a minimum of three (3) months for film project marketing activity.
- HEF plans to charge for template business/marketing plans (optional).
- HEF plans to charge for making available templates or standard forms for private placement memorandums for the issuer, but HEF will not be involved in negotiating the terms of an issuer’s raise, and the use by the issuer of these templates or forms will not be a condition of any issuer using HEF’s platform.
- HEF charges Issuers a monthly Management Fee for overseeing the Project as described above, conducting ongoing Investor Relations and Communications, communicating and maintaining files with third parties (e.g. escrow bank, attorneys, broker-dealers) involved in the financing transaction and Project production, including the Production accountant. The ongoing monthly Management Fee will also be in consideration of HEF’s efforts to obtain film distribution.
- HEF receives a Profit Participation position in the Project (in the marketplace.)
- Fees will not be based upon the amount of funds raised by the issuer on HEF’s platform.
- HEF will not have custody of funds raised on its platform by issuers or take custody of their securities.
+ CAN I ROLL THESE FEES AND COSTS INTO MY BUDGET?
You can, and are encouraged to include all the costs associated with HEF as line items in the budget, but you will have to have to pay the $XXXXX up front (as described) - that is prior to funding.
+ THE HEF CROWD INVESTING SITE IS HELD TO SEC COMPLIANCE. DOES LISTING ON THE SITE REQUIRE A GREAT DEAL OF PAPERWORK?
We go to great lengths to streamline and simplify the process. The actual transactional site application is entirely online with convenient drop down menus and clear instructions, but if you get stuck, we're happy to assist. We stand right next to you in the process and you have someone assigned to you to whom to speak.
+ WHAT DOCUMENTS WILL I NEED?
Your Chain of Title, assignments, copyright(s). Articles of Incorporation (if applicable), budgets, and PPM (as applicable); your Term Sheet, and any marketing materials such as photos, teasers, trailers, look book, or anything else to help us promote your film. But we are right there to assist.
+ I'VE HEARD THAT ANY FUNDING SOURCE THAT ASKS FOR MONEY UP FRONT IS A SCAM...
We've heard that too, and sadly that's often the case. However, we are not a funding source. HEF is an instrument (a process/mechanism), for funding your film. HEF does NOT charge “money for money.” Nor does the actual investment platform (though the Broker-Dealer will charge a “success fee.”) The fees and expenses are for discounted services that HEF delivers. As noted above, there is a “success fee” that is charged by the Broker-Dealer (not us) – but that amount can be calculated in advance and basically included in the raise. Finally, there are certain other fees (for on-going mandated communication to investors, escrow fees, etc.) –some of which are paid for by HEF and some by the Issuer and which, along with optional fees for background checks, etc. would be fully disclosed and referenced upon Issuer registration - prior to any final commitment by the Issuer.
+ HEF GETS AN EXECUTIVE PRODUCER CREDIT. DOES THAT MEAN THAT THEY PRODUCE MY FILM?
Traditionally, the role of the Executive Producer in film is funding. HEF may in fact fund the project in whole or in part, and in doing so may take a more active role in production. If HEF doesn't directly invest in the project then we do not hands-on produce your film/project, and after our initial development of the chosen project, does not get involved with the creative process.
+ WHAT HAPPENS IF MY FILM DOES NOT REACH ITS FUNDING GOAL?
In that case, any money raised is returned to the investors. In that event you are invited to return with a revised package (that may mean changes to the script, your marketing materials, and/or the budget). If you return to HEF and resubmit your fees will be adjusted and any previous investors will be contacted and invited to once again participate in your raise. But in setting up the “Goals”, HEF will try to present varying scenarios to potential investors so that in the case of differing levels of attainment, the rights of the investor are appropriately disclosed and accommodated – all compliant with SEC rules.*
*Explanation of more specific details and possible accommodation of certain circumstances are discussed and disclosed upon proffer and review of requisite legal documents and prior to execution thereof.