Business Plans for Filmmakers

2. Cover Page and Table of Contents

32 2. Cover Page and Table of Contents What are the essentials that must be on the cover of a business plan, and who has the authority to make such rules? The answer to both questions is that there are no requirements relating to what must be on the cover of a business plan, because there is no authority that either makes or enforces such rules. This is one of the many differences between a business plan and a securities disclosure document. Both the federal and state governments have agencies that provide and enforce disclosure requirements relating to securities disclosure documents, including the information that must appear on the cover page. But no such agencies regulate the contents of a business plan, so common sense and custom prevail. Cover Most business-plan preparers would probably take the position that the cover of a business plan should at least say “Business Plan” in large, bold letters. It may also include a brief description of the purpose of the business plan (e.g., seeking to fund the production costs of a single feature-length motion picture). It could also include the amount of money being sought. In addition, a filmmaker may want to set out the name of the company or the name of the project on the cover page, possibly accompanied by some indication as to the nature of the investment vehicle. For example, if the investment vehicle is a corporation to be formed, the name on the cover page of the business plan may be “XYZ Film Productions Inc. (a California corporation to be formed),” or whatever other state in which the corporation may be formed. If the investment vehicle is a member-managed LLC, the name on the cover page may be “XYZ Film Productions LLC.” The cover page may also include the company address and phone number and the date on which the business plan was first made available to prospective investors. Some business-plan consultants recommend creating a space on the cover (e.g., upper-right-hand corner) to insert the name of the person receiving the business Cover Page and Table of Contents 33 plan and a tracking number and keeping a list to track how many business plans were sent out and to whom. This is most likely another carryover from securities private-placement offering practices for which issuers are advised to keep track of their distribution of their securities disclosure documents as a means of creating evidence that a prohibited general solicitation did not occur. Although a good idea, this carryover is not required for business-plan distribution. Picking and choosing from the cover-page requirements for a securities disclosure document, a business plan preparer might include the following: name of the company or investment vehicle the title, amount and description of the investment being offered any current owners who are selling some of their interests (this needs to be disclosed) a cross-reference to the risk-factors section if one exists the date of the document Although a risk-factors section is not required for a business plan, including one may be a good idea, just so investors do not later complain that the filmmaker did not tell them about some of the bad things that could happen to their investment (i.e., the risks associated with the investment—see “Risk Factors” section, chapter 11). Since a film is not only a business venture but also a creative enterprise, filmmakers may also want to include some sort of artwork on the front cover of a business plan. If art is already created for a one-sheet, sell-sheet or poster relating to a feature film or documentary, this same artwork may be available for the business plan’s cover. Otherwise, some form of art or graphic design will tend to enhance the cover and help communicate that this business plan is for a creative venture as opposed to less-artistic business enterprises. A sample cover page, without spacing, bold or font changes, follows. Business Plan Providing information for the purpose of raising $1,000,000 (minimum) to $2,000,000 (maximum) from one to three active investors and members of a member-managed LLC to be formed upon funding in units of $500,000 each for use in producing a single motion picture for exploitation in all markets and media throughout the world. XYZ Film Productions 1234 Avenue F Cover Page and Table of Contents 34 Los Angeles, California 91362 (310) 583–3429...