What’s the Investor Letter of Intent for Film?
When a film is nearing production, there are instances in which a letter of intent might come up as a means of showing the interest that an actor, or investor, may have in a production. The investor letter of intent for a film represents a unique document that can state the intent of the investor to potentially provide capital funding or investment financing based on specific terms or a proposed agreement, but what is the purpose?
What is the Investor Letter of Intent?
The investor letter of intent states the intent of an investor to provide capital financing or funding for a film project. Similar to a talent or actor letter of intent, which shows the actor’s interest in a film that has yet to be produced.
An investor letter of intent can be used to show banks or other investors that a particular investor does have interest in a film project. And that they are highly considering the investment.
Is the Investor Letter of Intent a Contract?
Unfortunately, the letter of intent, for an investor or for an actor, is not representative of a formal contract. This means that even if you have an investor letter of intent from a top investor.
Stating that they will provide capital financing for your project. Until you have a deal contract that clearly outlines the terms of the investment. You don’t have a formal agreement.
The letter of intent purely shows that the investor has interest in the film. And that they intend to invest in it. Should specific parameters that they might have in mind be achieved.
However, even with a signed investor letter of intent, the investor may later back out and opt out of investing.
If It’s Not a Contract, What’s the Purpose?
You might be wondering, if an investor letter of intent isn’t a contract. Then what’s the purpose of the form? Whenever an investor is considering a project closely. They will issue a letter of intent with their terms and conditions outlined as part of their agreement.
You can meet the terms and conditions. And upon their further approval, they will likely invest but it’s not a guarantee. The terms must be set, and met, by both parties. And a contract later drafted in order to truly seal the deal.
In Summary
However, an investor letter of intent does have a purpose. It can be used to show other investors that you’ve got interest in your production and it can be used to bring up negotiations.
With multiple investor letter of intent forms, you might be able to get more than one investor interested in considering an exclusive deal with your project.
Essentially, the letter of intent is a negotiation card that you can use to create some added pull when pitching banks or other investors and trying to raise capital for your project.
