(By Mark Andrews)


Finders are individuals who source finance for producers to get their film projects funded, but for the most part, they are rarely informed about the craft which they are being engaged.  By this, I mean that most finders are not “full-time finders”, but merely seizing on an opportunity that they consider may make them a quick buck.  Most finders usually have a full time job in finance, or are self employed in the film industry, and they happen to have made a few connections with some independent producers that need someone to find them money. 



Their knowledge of film finance and the requirements of most investors is limited, and they usually don’t recognize their fiduciary responsibilities from either a legal or moral standpoint.  In the worse case scenario, should you be unfortunate to meet certain individuals, since they literally contract producers (or not), do little or no due diligence on both the producers side, or the financing sources sides, and they send project information out to prospective financiers without any legal right to do so in the hope of simply “getting lucky”.



This of course can have serious ramifications for most individuals with film projects, since your project is now being passed around town to everybody and their mother, which naturally dilutes the very essence and value of the project.  Afterall—Who wants a project that everybody has seen, and what many may have passed on?! Not to mention, there are many legal ramifications of soliciting investment from investors without a license (which many finders don’t have).



So what can you do to protect yourselves from the more unscrupulous individuals who serve to give the legitimate Finders or Executive Producers a “bad name”?.  Well first of all, you can do your own due diligence on them: find out and ask for proof of any films they have financed or produced and how they did so, ask for a formal contract and ensure that the terms of the contract are not unreasonable, make sure the contract provides for them to give you a list of the prospective financiers they intend to approach in the event you already know them.  Also, it would be wise to have your lawyer review the contract and make sure you are protected from any fall out between you and the finder because either the finder was not licensed, or some inadvertent warranty was made without your permission.  Finally, it would be wise to consider preparing a proper offering memorandum to be presented to legitimate equity investors.



Alternatively, you can do your homework, learn about film financing and raising capital in addition to networking.  Hard work never hurt anyone, and learning to raise money for your film the hard way is both a rewarding and an invaluable skill to have.  Networking these days is easier than it’s ever been with social networking sites such as LinkedIN, Facebook and ASW to name a few, and if you are fortunate enough to live in Los Angeles (or not as the case may be ) there are more than a few social events to put on your calendar every week.  That aside, prepare a specific course about film financing, read books on it, retain the services of an entertainment legal professional or find a mentor with the experience you don’t have yet!