Entertainment projects are notoriously risky investments - you can make a bundle but you can also lose your entire investment. FilmCabbage has developed a method whereby an investor can set the money they want to invest in the project aside (as long as it is a minimum of the equivalent of $10M Euros), and have US put the money into the project on their behalf. We would have contracts with that investor with all the appropriate stipulations, so that once they confirm they like the direction the project is taking they would just execute their option to "substitute" their money in the project for our money.
HOW DOES IT WORK?
Assume that you are an “Investor” who has an interest in a $50M film project. You have $15M (or any amount $10M or greater) that you really want to invest into it, but you have concerns that you could lose your money. You have structured an agreement with the project owner to pay you 5% interest on your investment and receive a 30% equity share in the back end of the venture.
The FilmCabbage “Investor Protection Program” makes it possible to maintain your deal, but keep ALL of your money on the “sidelines” until you are comfortable and confident, that the project is going to succeed.
The investor would simply open a dedicated bank account in their name at a top tier bank, and deposit their $15M. Our bankers would work with the investor's bankers to "block" the account to guarantee no funds can move in or out, and the funds cannot be encumbered in any other manner. Once this is complete and the bankers are satisfied with the security of the account, they will add one of our Compliance Officers as a signatory to the account so that can confirm anything he wishes about the account with the bank at his discretion. While the investor's money sits safely in that account, we step OUR $12M into the project (equal to the investor's $15M less 20% discounting), and the cost to the investor (or the project, if they are paying the cost) is a mere 4% per annum on the amount that is being “protected”. That 4% enables the investor to “test the waters” until they are certain that they want to jump in!
We will not require any Personal Guarantees from the investor, but instead we can have the guarantee/equity assigned to them by the project temporarily assigned to us. Once the investor is comfortable and confident that the project is on its way and safe for their money, they can then SWAP out our money for theirs and re-take their ownership position in the project.
With FilmCabbage's "Investor Protection Program", your investor is always completely protected because we assume all the risk for them.