# DAY 2 — How Investors Actually Think
*Frame × Frame Academy · 5-Day Producer Course · Day 2 of 5*

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## You're Not Competing Against Other Films

You're competing against the **S&P 500**.

That investor who's writing you a $100K check is also looking at a stock market that historically averages 10% per year. A high-yield savings account at 5%. A real estate deal at 12-15% with tax advantages. **Why would they pick your film over those?**

Three reasons, in order:

1. **Premium gets them to break-even faster than the market would.** A 25% premium in 18 months is a much better annualized return than 10%/year.
2. **Backend points are uncapped.** If the film hits, their $100K could become $400K. Stock indices don't do that.
3. **They care about you / the project / the story.** This is emotional capital — but **never lead with this**. Lead with the math.

## The 3 Types of Investor

| Type | What They Want | How to Pitch Them |
|---|---|---|
| **The Believer** | Wants to be in the room. Emotional capital. | Premium + back-end + invite to set + premiere VIP |
| **The Returner** | Pure financial decision. Compares to stock market. | Premium + clear waterfall + comparable deal returns |
| **The Strategic** | Wants industry access / leverage / brand association. | Premium + EP credit + production company access |

Most first-time producers pitch every investor like a Believer. Wrong. You need to read which type you're talking to in the first 5 minutes.

## What They're Really Asking

When an investor says **"What's the upside?"** — they're asking *"What's my realistic best case scenario after premium recoups?"*

When they say **"What's the timeline?"** — they're asking *"When am I getting my premium money back?"* (Answer: 2-3 years from completion of principal photography for a standard indie. Hierarchy was 5. Sound of Freedom was 6+. Set expectations long, deliver short.)

When they say **"How safe is this?"** — they're asking *"What's the worst case?"* (Answer: you can lose 100% of your investment in a film. **Say it out loud. Don't soften it.** Investors who can't stomach that aren't your investors.)

## Real Examples from the Playbook

- **Get Out (2017)** — Blumhouse's model is built around investor confidence: small budgets, locked premium structures, high-volume slate. They've recouped enough films that investors know the math works at portfolio level.
- **Selma (2014)** — Plan B + Pathé + Cloud Eight financed. Each partner brought their own investors with different premium structures. Ava DuVernay didn't have to convince any one big check — she packaged multiple smaller commitments.

## Tomorrow

Tomorrow: **Negotiating the windows.** When you sell theatrical, streaming, and international separately, you triple your potential revenue but you also triple your contract risk.

— Trade Marq IV · Frame × Frame Academy
