It can be used with a joint venture agreement to raise money from another entity also acting as an active investor/joint venture partner.
In limited circumstances, it may also be used as a means of identifying possible founding shareholders for the initial incorporation, a strategy discussed elsewhere in the book Another important use of the business plan is helpful in establishing a preexisting relationship with prospective investors for a subsequent securities offering.
In the film industry, you'll need a solid business plan for the projects you take on.
A business plan is a document which clearly identifies your understanding of where your project fits into the film industry and the market it is targeted to.
This document is very important to independent investors and must be professional, well presented and clear.
I have prepared many film business plans - some large documents, some abbreviated documents.
(3) Relatively easy to assemble-- In the context of the film business, a business plan is merely a specific adaptation of the producer's package, which in turn contains many of the documents a producer would ordinarily generate in the preplanning stages of putting together a film project.
(4) General solicitation permitted--The business plan, properly handled, allows the producer to go out into the marketplace and conduct a general solicitation for a single active investor or other possible combinations, and if not successful in raising the necessary monies using the business plan, the producer may convert his or her offering into a securities offering and then go back and call on those same investors within the context of a securities private placement.
Like other forms of film finance, using the business plan has inherent advantages and disadvantages.
The advantages of the business plan approach include: (1) No securities laws involved--So long as the business plan is associated with an active investor form of financing (i.e., investor-financing agreement, joint venture or initial incorporation), producers using a business plan may approach any prospective investor without fear of violating the securities law prohibitions relating to private placements, which in turn (as a practical matter) limit offers and sales to persons with whom the producer or other upper-level management of the issuing entity have a preexisting relationship.