I spoke at the Ingenious hosted Ministerial Round table earlier this week, when a group of about 20 of us from the industry were invited to give Minister for Culture and Tourism, Sean Woodward,some thoughts on the relationship between intelligent finance and a successful creative industry, and what government can do (and should not do) to encourage the latter.
I’ve done a number of these things before, but its still an odd experience, being asked to advise the government on policy, calling on one to transcend for a brief moment one’s own, or corporate, needs and try and see the world through the view point of the public good. Odd, but also refreshing and very appealing.
Sean seems a thoughtful, bright man - amusingly the only MP with a Butler - and I hope my contribution, a summary of which I append below - gave him some useful grist to his mill.

Arvind Ethan David, CEO Slingshot

Ingenious Round Table: Top Line Thoughts

Context:

I am a founder and CEO of slingshot, a film production and distribution company, which is structurally unusual in that it combines venture capital from Arts Alliance and the Creative Capital Fund, with public funding (Skillset, RSA) and angel investment. As such, I thought I would focus my introductory remarks on the merits and demerits of the different sources of finance available, and how they contrast, one to the other.

Slingshot is the 4^th creative business I have run or helped establish over the past 8 years. In total I have been involved in raising approximately £6 million in funding into these businesses, of that sum, funds have been fairly evenly split between the various categories of finance:

· £1.5m from angel investors,

· £1.75m public funding,

· £1.5m from corporate, strategic

· £1.25m from venture capital firms or other institutional financiers.

I have come to think about the different sources and nature of finance through a three dimensional matrix, which might be of general use:

1. What do the investors demand in return for their cash, i.e. How EXPENSIVE is the money
2. What do the investors provide above and beyond their cash, i.e. How VALUE ADDING is the money
3. How TEDIOUS is the process of raising the money.

By and large, it is my experience that:

• VC money is the most expensive and often extremely value adding, and generally not too tedious.

• Strategic money is often the most value adding, but often very tedious to raise, on a corporate/equity level (though transactional / project finance is easier). It tends to be quite expensive.

• Public money is the cheapest, but the least value adding and the most tedious.

• Angel money typically gets stuck in between, being more expensive than public funding, but less value adding than VC or strategic investors and has high variability with respect to its tedium factor (unsurprising given the variability of individuals).

This entry was posted on Saturday, April 14th, 2007 at 11:15 am and is filed under General Updates, Industry Debate, Running a Film Company, film finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.