Self-Financing Projects

The million dollar question, “When to self-finance projects?”

Economic times have made it hard to get films made without an A-list Actor attached to the project. It is even harder to get a project made when there are more minorities in the main cast.  Tyler Perry is a spoken advocate of this trend that is happening in Hollywood. Tyler Perry is know for his multi-talented skills and has made a name for himself self-financing his own work. More recently George Lucas has been affected by this Hollywood stereotype and had to self-finance the movie "Red Tails" as he could not find a major studio to back his film. George Lucas put up $100 million dollars for this film with his own money. It is shocking to hear that Mr. Star Wars can’t get funding for a film having a large black cast. It just goes to show that some places in the world have not changed their view on who will go to watch these type of movies.  

On the other hand, Mel Gibson had the same problem with the movie “Passion of the Christ.”  He decided to finance the movie himself at $30 million and the movie generated more than $370 million dollars in domestic sales. Even though Mel Gibson’s movie was a different type of genre it still did not fit the traditional Hollywood mold of a big blockbuster action packed movie, therefore no major studio would fund it. It is hard to imagine these three big producers not getting backed by studios, but they did not. All three of them used their own money and took a risk on projects they believed in and they wanted people to watch. Luckily they all paid off and even if they didn’t they took the risk to make something they valued.

The lesson from this blog is if you’re passionate about something and your not being supported, just do it yourself. Your passion will show through your work and people will want to support you because you took that risk.

Sources

Blauvelt, Christian. (2012, January 23). ‘Red Tails’: Will George Lucas’ $100 million gamble pay off? Entertainment Weekly. Retrieved from

http://insidemovies.ew.com/2012/01/23/red-tails-george-lucas-100-million-dollar-gamble/

Perry, Tyler. (2012) The problem with al-star African American Casts. Tyler Perry. Retrieved from http://www.tylerperry.com/messages/problem-all-star-african-american-casts/

Rich, Frank. (2010, July 17). The Good News About Mel Gibson. The New York Times. Retrieved from http://www.nytimes.com/2010/07/18/opinion/18rich.html

Alternative Funding Websites

In finding investors to finance small businesses, it is wise to research many different opportunities that would allow you to find the right financier for your business.  I have researched two websites that offer alternative funding for small businesses. The two alternative financing businesses I researched are Opportunity Finance Network and First Nations Development Institute.

Opportunity Finance Network (OFN) lends to low-income individuals, low wealth and other disadvantages communities to encourage them to join in the growth of the economy. OFN focuses on communities first and is not maximizing on profit, but is profitable. OFN finances community business to help spark job growth and development in poorer areas. OFN looks to finance high volume businesses, bring new resources to community development finance institutions (CDFI) in both public and private sectors, sharing knowledge on research and training, consulting on organizations to increase performance and growth, creating a broad support group of CDFI for communication purposes. The OFN website offers a variety of information about the company from their strategies and reports to current news updates. OFN is dedicated to create more jobs for people in the USA (Opportunity Finance Network, 2011).

First Nations Development Institute (FNDI) gives grants to Native Americans and others who will give back to the Native American community. The key areas for grants are on financial and investor education, combating predatory lending, Native American business and asset development, strengthening Native American nonprofits and native foods and health. The website is filled with information on how you can make a difference in the Native Americans lives and the benefits from these programs that this organization offers.  FNDI provides resources to learn more about the Native American Community and provide donations directly to different aspects of this community (FNDI, 2011).

The advantages of using alternative financing are that it offers a strict criteria for certain projects that fit the mission of the financing company. Alternative financing helps you connect to certain financiers who want to finance your projects to help certain communities. The disadvantages is that you may not have as much control as you would like since the financing is coming from certain organizations that have strict criteria to follow in regards to their company mission.  Another disadvantage is you need to give back to that certain group and there is not much room to expand to outside groups that don’t fit a certain mold.

Alternative financing offers another perspective from the traditional mold of financing and it is great for small business to research both opportunities for there may be a financier looking for them.

Sources

Opportunity Finance Network. (2011). Retrieved from http://www.opportunityfinance.net/

FNDI. (2011). Retrieved from http://www.firstnations.org/program-financialandinvestor