What is Echo Lake Productions?
Echo Lake is a film fund for independent features. At the moment, Echo Lake only finances and produces narrative films, as opposed to documentaries. There are two sides to the company: the financing side, which acts like an aggressive entertainment bank, serving the needs of producers who lack some or all of their financing; and the producing side, which options and develops projects that the company will help finance.
When and why did Echo Lake come into being?
I (Doug Mankoff) founded the company in 1997 by raising the fund from private investors. The mission of the company is to help make films that matter.
The driving philosophy behind Echo Lake Productions is . . .
that it is possible to invest in films in a smart way. I saw that banks were investing in films. Banks typically avoid risk. I decided to raise a fund designed to take on more risk than banks would take and to charge slightly more for that increased risk. The fund is set up to be somewhat like socially responsible mutual funds. We only invest in films that are about things that matter.
Who is the staff of Echo Lake Productions?
Peter Wetherell is our foreign sales consultant and helps us evaluate projects from a financial perspective. Mark Dempsey is our director of development and helps us evaluate projects from a creative perspective. The company has a long-standing relationship with producer Robin Alper (Things Beneath the Sun; La Ciudad), who steers a lot of interesting projects our way.
The company is relatively young; what were you and Peter doing before you founded Echo Lake?
I worked for a producer named Michael Nesmith who helped finance indie films such as Repo Man and Tape Heads. Before that I founded a company called Yearlook/Camp TV that produces videos for schools and camps. I have both business school and film school backgrounds, so I try to examine film financing from both perspectives. Peter Wetherell used to be a foreign sales agent for Columbia TriStar International Television and Entertainment Licensing in Germany.
How many projects do you fund, both as investments and as loans, on average each year?
Two to three.
How many projects have you funded since your inception? What have been the distribution/ exhibition paths of those projects?
Echo Lake has funded seven features to date. Our biggest success was the completion money we provided for David Riker’s The City (La Ciudad), which enjoyed a limited arthouse release run last fall through Zeitgeist Films and recently aired on PBS stations across the country. We continue to sell La Ciudad to foreign distributors. Other projects Echo Lake has provided financing for include A Dog of Flanders, which got a pretty wide theatrical release two years ago through Warner Bros., and Things Behind the Sun, the new feature from Allison Anders that we co-financed with Sidekick Entertainment, a similar fund based here in L.A.
What is the estimated dollar amount per project (loaned and invested)?
Usually between $500,000 and $1,000,000. This amount can often provide the crucial missing piece for films with budgets of up to $4,000,000.
How many submissions do you receive annually? Out of those, how many do you invest in?
In 1999 we received roughly 1,200 submissions. Of those, we invested money in only four.
What types of projects do you seek?
For both producing and financing projects, the script and the director are crucial. Ultimately, we are looking for projects that have the potential for theatrical release. At our budget range, that usually means an arthouse or niche release. Projects based on underlying material such as plays, books, or old films often catch our attention.
Are there any restrictions or qualifications requirements?
It certainly helps if the producer has produced before, but it is not essential. The key is that their project is worthy.
What types of projects would Echo Lake definitely not fund?
Documentaries, animation, porn. Projects with directors who have not yet directed. Z-grade genre films that seem destined for the video shelf rather than your local theater.
Does your funding cycle include hard deadlines or can producers approach you year round?
Year round is fine.
How does a producer submit a project to you?
Because we’re a smaller company, we need to see a summary first in order to determine whether or not we should read the whole script. We also need to learn more about the project’s attachments (director and cast) and the budget in order to determine whether we should consider the project for production or financing. Does the producer want us to come in and produce the project (production) or is the producer looking more for an executive producer, a financier (financing)? Our investors also require that we get release forms signed by the writer, even for summaries, unless the project is submitted by a qualified producer, agent, or attorney.
Do you look at all projects first as possible investments and then offer loan financing to those that appeal to you but which you decided not to invest in?
We try to figure out right away whether the producer (or whoever is submitting the project) wants us to consider the project for our production side or our financing side. If we choose not to produce a project submitted to the production side, we may evaluate it later as a possible loan.
Who is in charge of the production division? The financing division?
While I oversee both divisions, I rely on the input of Peter Wetherell for the financing side and Mark Dempsey for the production side.
Tell us a little about the review process.
If we like the summary or the pitch, then someone in the company will read the script. If there are attachments, then we run numbers to decide whether it makes sense at the proposed budget.
What are the financing decisions based upon? Who makes these decisions?
Unlike most banks, we put a lot of consideration into how we feel about the story and about the director. We try to imagine what kind of reviews the film will garner. Like most banks, we then take a hard look at the numbers—what we expect the film will sell for in the various territories. We also consider who is involved and whether we can count on them.
Echo Lake’s loan financing division offers three types of loans: bridge loans, gap loans, and completion loans. Briefly define these options.
Bridge loans are for the unfortunate (but not rare) producer who has lined up financing, but that will not flow in time for production to occur. In these situations, Echo Lake provides an interim or bridge loan. Gap loans are loans that have as collateral unsold territories. For example, a film may have pre-sales to Italy, German, and Spain for amounts totaling half the budget; the remaining half is the gap. Most banks will do gap loans of up to 20% of the film’s budget. It certain cases, Echo Lake will do gap loans that are higher than this amount. Completion loans are finishing funds that we lend to producers who are at the rough-cut stage.
What are the basic terms of these loans?
Fees for each type usually run 15-20%. Depending on the situation, we may require back-end or deferred fees. For bridge loans, we are paid back by the bank providing the production financing. For gap loans, we are usually repaid within a year or 18 months. Finishing funds are usually provided on a last-in first-out basis, meaning we’re the first to be repaid once the film is picked up by a distributor.
Are there time restrictions within which the loaned funds must be used?
Usually the funds are provided directly to the production and are used immediately.
Do you offer your loan-funded filmmakers any additional support (i.e. leads on additional funding sources, production equipment assistance, help in finding distribution, etc.) either in the production or distribution phases?
Absolutely. We try to provide filmmakers with “smart money.” In other words, they get the benefit of our experience and contacts. We often help find sales agents and distributors.
If a project is rejected in the development phase, can it be re-submited later?
Yes, especially if we liked the story. Certainly a project can change and become more attractive over time: a new director or actors might be attached, the budget might be lowered, etc. We encourage producers to stay in touch with us about projects that have stories that intrigued us.
Why should producers turn to Echo Lake for loan financing as opposed to a bank?
When Echo Lake likes the story and director of a given project, it can be more aggressive than a bank, which means it can provide more funds against less collateral. Flexibility and speed are attributes that banks don’t often have, due to their committee style decision-making. Finally, banks don’t like to do small loans (under $1 million). We don’t mind as long as the project is worthy.
What distinguishes Echo Lake from other financing companies?
Our interest in stories that are about things that matter. Most companies look primarily at the bottom line.
For those emerging producers, how do you recommend they learn more about their financing options?
We will talk to anyone who has a quick question or two: email us at contact@echolakeprod uctions.com. Your project does not have to be ready. In general, producers can attend seminars and conferences sponsored by AIVF, the IFP, and by AFMA. There are attorneys that specialize in this sort of financing [Ed. note: AIVF has a list of entertainment attorneys in our library and at www.aivf.org.] And sales agents are always searching for projects.
What advice do you have for producers in submitting their cover letter and synopsis to you?
Don’t send us something that is clearly not right for us (i.e. a $15 million empty-headed teen sex comedy). Be as specific as you can in the cover letter regarding your position and who you have attached, which will allow us to make a decision on the project as quickly and as efficiently as possible. Good summaries are a truly rare thing. Since Echo Lake’s primary concern is the story, clearly relaying your project’s storyline to us is vitally important.
What is the most common mistake applicants make?
Sending us a project that is clearly not for us, be it the wrong sort of story or a budget that’s beyond our means.
What would people most be surprised to learn about Echo Lake and/or its founders?
Our office is above a bar called the Firehouse in Venice. This place was featured in the film Speed and has a killer five-egg omelet on the menu.
Other financing companies or grantmaking organizations you admire and why.
Good Machine, NewMarket Capital Group, Shooting Gallery, because they get good stuff made.
Famous last words:
Don’t give up on us if we pass on a few projects. We are in this for the long haul.
Michelle Coe is program director at AIVF.