As some of you know, I’ve been working on starting a company, Visioneer Studios, and most of our team lives in San Francisco. While at first glance there’s nothing weird about that (everyone and their sister has a startup it seems), what is weird is that while we leverage tech, we’re not a tech company. And man has that turned out to be a challenge! Let me share my experience with you, what our current big challenge is, and what we’re doing.
First, some background. Our goal is to be the Pixar of live action. I dislike saying that because it sounds arrogant and many other companies have claimed to be the “Pixar of X.” But, it’s true. (I also feel odd having “CEO” on my business card, so perhaps this dislike is just impostor syndrome.) We’re a primarily ex-Pixar team (along with an Academy member and ex-Sony Imageworks SVP) who believe that stories define us and all stories should be great. Pixar’s the only studio that has been continuously successful, and our goal is to create continuously successful content by changing how content is developed, starting with lower-budget, story-driven, live-action movies. (It’s also accurate to say we’re a startup accelerator for stories, but that’s not as sexy or attention-getting.)
I didn’t expect starting Visioneer to be easy, especially because unlike other projects I’ve worked on, this one can’t readily be bootstrapped. But since the Bay Area has the best startup support network in the world, I threw myself into it, learning everything I could and figuring out what I could adapt to what we’re doing. Most of my conversations with fellow want-to-be-founders went like this:
1. Oh, that sounds so cool! So are you making an app? (We’re building some tools internally but that’s not the focus.)
2. Why don’t you move to LA? (The Bay Area tends to be more open to new and disruptive ideas: consider Hollywood’s reaction to the VHS, and how much content can you still not stream? It’s very hard to convince someone already making movies to take a chance on a different way of developing them. Fundamentally it’s the whole “it’s easier for startups to innovate” thing. But once we’re going, I will be spending lots of time there to build relationships.)
3. So you’re not making an app? (Groan.)
Anyone working on a non-tech startup in SF has probably experienced a similar conversation! And even though we’re not a tech company, we still have the same major challenge — how do we get funded? I’ve learned a lot about funding a non-tech startup the past few months, and let me share my top take-aways:
1. Don’t bother with venture. VCs like things you can scale 100x by throwing more computers at it, not human-dependent services or content (content is traditionally hit-driven and less reliable, although you could argue that VC investments are also a hit-driven industry). They’re much more likely to fund a video distribution platform than content. (The irony is that as Netflix is proving, content rules. And what’s Alibaba doing with all of its new capital? They’re looking at film!)
2. If you can get going on your own, do so. For a service, you should be the service provider initially (“the great thing about starting a company is you get to pick which 90 hours a week you work!”). In our case, we developed an animated project that we pitched to a major network. Even though our first target market is live-action, this is an opportunistic play that could let us get going without any external investment and increase our valuation. It’s possible there’s even a small business grant that could help you get going.
3. Do your homework, and get creative.
After lots of learning, we concluded that our ideal investors are people who have invested in film before and know the potential pain points (which we’re mitigating), high net-worth individuals/family offices interested in film who haven’t invested (we have a fun story, and it works in our favor that film’s lasting, sexy, and considered recession-proof), and individuals who have been successful at a disruptive company before and get the initial “believe in us” challenge.
To reach these people, since we’re trying to start a film company, we created a trailer for our company. It’s a story about who we are, why film is a great investment (did you know it’s considered recession-proof?), what we’re doing that’s special/why it will be successful, and a tiny bit about what our projects are (sounds a lot like a tech startup pitch deck, eh?). Like a great story, every element is planned, and we’re trying to get the audience invested in us (figuratively and literally). We lead with our team, since it’s the strongest element we have, and it ends with a call to action — what we’re doing is special, and we need your help to bring these stories to life. It’s a bit like a Kickstarter video.
Unlike Kickstarter, the video is on our site behind a password. We’ve sent the password to potential accredited investors we know, and we’ve asked people in our network to help spread the word to any accredited investors they know, especially family offices (“These ex-Pixar guys are trying to make their own movies. They’re pretty smart. If you have 4 minutes, check out this video. Here’s the password.”). Our first goal is to get meetings with interested investors. We don’t even say how much we’re looking to raise because we want people to ask and to start a conversation. We’re more fun and passionate to talk with in person, and if you ask a question or throw popcorn at us, you’ll get a reply!
With the video, we’re trying to give investors enough initial info that they can decide if we’re worth talking to; we don’t want to waste someone’s time if that person isn’t interested, and we’re also trying to cast a wide net and get this video in front of as many investors as possible (ideally far more than we could schedule coffee with). Everything we’re doing now is focused around getting investor eyeballs on our pitch. As an aside, if you are an accredited investor interested in film (or someone you know is), ping me for the password! (Special thanks to the JOBS act for allowing me to say that.)
Truthfully, I have no idea if this will work. But it’s the best idea we’ve come up with, so we’re going to give it a try! Down the road, I’ll try and share the video with you and break it down. The tease is that we used the fabulous Santa Rosa-based Baker Productions to shoot it, we shot in a really cool art deco theater in Alameda, CA, the amazing artists at Bark Bark did the motion graphics, and we worked on a case study with the insanely talented Colin Levy. We’re thrilled with how it turned out and with any luck, this pitch will be the first of many great stories we tell!
Now I’m curious — if you’re working on a non-tech company, how are you going about getting funded?