Front Money – what it is, how it works.
What is Front Money?
Front money, or Seed money, as it is often called, is a common first round of capital for a start-up businesses, including many independent films and theatrical projects. It gets its name from the idea that early stage financing plants the seed that enables a small business to grow.
Obtaining funding is one of the most critical aspects of getting your project on the track to production. In fact, many projects fail or are prevented from even starting due to a lack of capital. Although obtaining financing can be difficult for any small business, it is particularly hard for new entertainment ventures. Since these ventures lack a track record, potential lenders and investors are often skeptical about their prospects for success. Nonetheless, the persistent would-be producer, if armed with a sound business plan and the necessary skills, can usually obtain funding for his/her project eventually.