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Thread: $7000 investment - need advice

  1. Default $7000 investment - need advice

    Hi!

    I am starting a video production company after a few years of video editing for a hobby. Even though filming wasn't my main focus, it will of course be a main factor in the business and I have been training with a professional and studying for the past 2 months.

    The time has come and I'm opening a production company. I did lots of research and came to a conclusion that I can get started with $7000, that would get me stuff like a camera, lights, mics, headsets, tripod, and all the other main equipment that I will want to start with.

    Next week I have meetings with 3 different potential investers that are interested to invest the sum that I have come up for me to get this business on the road.

    My question to you guys is the deal I should propose to these investers. Of course, there are many ways to do this so both sides benifit, but I wanted to hear from someone with experience.

    I want to present different aspects of the deals and different deals as well so that they can start negotiating from. I will go over one thought real quick, to give you an idea where I'm at. Of course I'm not posting ALL the details of a deal and of course a lawyer will look it over, but I want some general direction. Again, I'm just throwing out general numbers and percentages. I want to hear from you guys what you think.

    1. Invester gives me $7000. His overal profit from the deal will be $7000 (%100) He will get %50 of every event I do until I pay off in total $14000. ($7000 for his investment and $7000 profit). Once the $14,000 is paid, the deal is over. He has no partnershipin the business.

    2. If I hadn't paid the invester at least $7000 in the first year, his profit from the deal will go up to %150. (saying that we agreed at first to %100 profit). If I pay him $7000 within the first year, his profit goes down to %80.

    More can be added like what happens after 2 years and so on...

    Thanks!

  2. #2

    Default

    To be honest, I would be looking at financing the company myself, unless I have read your post incorrectly, I would find the $7k myself, either through the bank (I would approach them with a business plan) or for such an amount use my credit card...you'll certainly not be paying back the amount you will pay an investor!....

    As regards the amount...£3500....that would only buy you a Canon XHaA1 and a passable PC to edit on....so there goes your lights, cameras, mics, editing software, tripod....

    Apologies if I have read you post incorrectly....but if your figures are correct....finance it yourself....but I think your figures might be wrong....good luck anyway

    hopefully someone will come up with other figures for you

  3. #3
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    Have to agree with Torby in as much as $7k won't get you very far at all. Apart from anything else, a one camera company (and that's about as many as you'll be buying with that budget) will not get very far at all.

    There's an awful lot to factor in - Cameras, Batteries, Tripods, Lights, Mics, Staff, and of course a PC to edit on and the software to do it. Remember you'll need more than one of the first six on that list and you see where you're sums are going awry. And that's for the most basic set-up. Get into steadicams, cranes / jibs, a vehicle to travel to bookings in, premises, and the figure truly skyrockets.

    As far as investors go... you'll need a far better business plan to make this happen. On TV recently in the UK a very successful Video Production company that turned over £1.6 million pounds last year totally failed to attract investment for expansion. Your best bet is that the investor hasn't got a clue about the business or has more money than sense.....

  4. #4

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    Hi Andy, think I saw that episode of Dragons Den....this was the firm that couldn't attract investment..

    eDv - the family media company :: Budgets

    they're not cheap....weddings start at about £3k so if ZVI gets work like that he can pay back any investment pretty quick....having said that...there's no mention of camera, filming etc and it seemed to me the "pitch" on the Den involved them taking existing footage and editing and assembling....but as you say....they make a few quid at it!

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    Quote Originally Posted by torby View Post
    ....there's no mention of camera, filming etc and it seemed to me the "pitch" on the Den involved them taking existing footage and editing and assembling....but as you say....they make a few quid at it!
    There was... they send a crew out to film the interviews for the family album stuff.

  6. Default Re:

    Thanks guys for the replies.

    Let me state a few things:

    1. I had not spoken to any invester about amunts yet. The numbers were just thrown out of my head. This morning I came to realize that %100 is silly because even just a loan from the bank is only %5 intrest. The thing is that with a bank you have to pay on a monthly basis, whether the business succeds or not. With an invester, if YOU lose by not making money and closing the business, the invester loses too. (of course, the equipment will go to him). Saying that, I think an invester should make a little more profit then a bank because of this risk and that he doesn't get paid back on a monthly basis.

    2. I don't understand why $7000 can't get me started. I don't have to start with such a camera. I had my eye on the Panasonic AG-DVX100B wich is roughly $2600. HD cameras can be a later investment. I have already a price list I got from some places and for $7000, I can cover this camera, extra batteries with charger, tripod, gun mic, external mic, headsets, two light stands with lights, ladder\cords and other small stuff, new computer with 2 screens (today I use a laptop), some advertizing, and I already own all the software since I have been editing for a few years now as a hobby. What am I missing?

    Thanks again!

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    What are you hoping to film?

  8. Default Re:

    Eventually, anything and everything. I undertstand that I might have to start with low quality weddings and family events but I will start with anything and build myself up.

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    Well lets take the wedding as a for instance. Do you think you can cover everything with one camera?

  10. Default Re:

    Yes, of course. To my knowledge, every video production company has a cheap package that includes just one camera. I have been working with a one guy videographer for 2 months now as a lightman and he does the best he can. Of course 2 cameras are better but some people want to pay less.

    I use different techniques when using one camera by getting some different shots from different angles from different places and using those as cutshots to give an illusion of two cameras , and say, walking down the isle, you can do a horizontal flip on some parts so it seems there are cameras from both sides of the isle.

    Anyhow, that is what I have to start with.
    Last edited by zvi; 03-29-2007 at 02:59 PM.

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