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Goldfinch Entertainment – SEIS investment manager interview


[Music] Hello I’m Alex Davies, founder of Wealth Club, and today I’m with Kirsty Bell,
founder and managing director of of Goldfinch Entertainment.
Hello Kirsty. // Hi. First off, perhaps could you just give me a brief introduction to Goldfinch? Goldfinch is essentially a finance raising company under Seed EIS and EIS for the entertainment space, ostensibly film, TV and games. We were founded in January 2014 and
originally we were founded to just do EIS and to prove that you could invest
in independent film and television through the mechanism of EIS and make
money for investors. And we have continued to expand since then, and now
have over 160 Goldfinch companies, all within the EIS & SEIS space.
// So Kirsty, could you tell me about your SEIS and EIS and what they aim to do for
investors? // It’s to try and prove to investors, and we have our first exits
happening on November the 7th this year, that you can put money, equity, into the
film and TV and game space and that the way that the projects are invested in
and the negotiations with the producers or the games developers happens, it means
that the money, that the EIS money or the SEIS money that goes in there is
put in a secure position. I don’t mean secure as in a guaranteed position, I mean
secure as in we have done our maths, we’ve done our homework, we’ve looked at
the contracts associated with the projects, we’ve done our sales estimates,
we’ve done a lot of digging and due diligence around the project, so we’re
looking at proper scientific examination of each of the projects that we provide
EIS money and SEIS money for, and so it’s a commercial risk that’s
been mitigated by our analysis. So do you want to give viewers a
flavour of the kind of things you have or will invest in? // So for instance
on the EIS side of things, one of our biggest successes was Le Mans 3D, which was
originally done as a feature documentary by a very good sports documentary outfit
called New Black Films. When the feature documentary was made, Amazon
showed some interest in it, we’d already done our maths, always knew that we were
covered by 2.5x based off our estimates, not estimates other people give us,
our own that are done by our people in our organization,
and it proved very difficult to sell as a feature documentary. So we’ve always got
Plan B or Plan C that we look at, and Amazon said: Look, are you willing to look
at this in a different way, are you willing to do this as a series instead?
And it’s actually out on Amazon at the moment, Le Mans 3D.
Our investors are very happy, it’s returned over
182 per cent so far back as a result of the Amazon deal. // OK, and any other successes? I’m invested, I know, in one of your SEIS – // Yes, DLT
// I understand that’s invested in Go 8-Bit… // Yes, which has just been commissioned
for a second series. That is about creating IP in the TV space, that’s how you make money with TV projects, it’s creating a format that can either be extended around the world to
what we call other territories, which is basically other countries, or it’s from
extending the IP for a second series and that’s how that those SEIS can gain
money. We’ve also got one of our very very first SEISs as KidsCave
Entertainment Limited and their product, Robozuna, was part of the IP of the
initial SEIS that was commissioned by ITV Global for a significant sum of
money. As a result of that, and because it was one of our early ones – bear in mind we’re
not 4 years old yet – they are exiting in the next few weeks at £1.25.
// Those are sort of the companies you look for, the projects you look for – are there
certain things you just avoid like a plague? // Yeah, we invest in people as well
as the project so when the team is – we are approached, we are inundated with
projects because of the reputation that we’ve gained of being
no-nonsense, very truthful with everybody when they bring their projects
to us – we probably turn away 90 to 95 percent of all projects that come in
through the door. We test the producers and the developers out as much as their
projects, we need somebody that we can work with, because we don’t just make a
investment advice to our SEIS fund managers or anything, we actually get
involved in each of our Goldfinch projects. Literally from the day that we
sign up with them to the day when the investors are delivered their money back,
we’re on that journey, we’re watching we’re almost like a Jiminy Cricket
on the shoulder of the producer or the developer, and that’s
very important to us because this is our company. Goldfinch Entertainment is a privately owned company started from absolutely nothing, and it’s been our sweat equity that’s enabled the business to grow, so every single project is
exceptionally important to us, and so is its success. So the fact that we’re
now able to demonstrate a track record with KidsCave exiting, and also our
initial Goldfinch Pictures EIS, exiting at £1.23 which we believe is
unheard of in the industry – we don’t know but we’ve heard that is unheard of – then
we can hopefully bring more product out there and put more product into film and
TV, you can see more of our things. So for instance if you were to go to the
American Film Market, which is where we do a lot of business, which is in two
weeks time, three of our films are being featured there at the American Film Market.
And that is people who are looking and watching, what are they doing next,
how are they doing it. So a lot of people approach us, Alex, but we don’t necessarily
embrace them unless we know their credentials and their integrity match
our own. // And what – because most, I think, investors, when I first looked at
investing in this sort of thing is, it’s quite confusing if you’re not in the
industry. So a typical project – let’s say Go 8-Bit, you don’t have to give particular
details – what is it, how does it work, what are you investing in and then,
yeah, also how will you realize the gains for me in the future? // So, Go 8-Bit or Kids
Cave or the George Best Documentary which are part of the SEIS, they are from
people who have got a track record themselves, we all know in this industry
what a track record can give you. So if you’re going to align yourself with
people who’ve got gold star, gold standard credentials then you’ve hit the
first tick in the box. Then you look at the project, the price of the project,
how much are they spending, where are they spending it, who is going to be
in charge of that spend? For me, being a chartered tax adviser, the nuts and
bolts of who’s in control of the financials is very very important to me.
Also is, have they got a distribution route? Is it going to be commissioned? Is
it going to get out there on Netflix or Amazon? it’s not the be-all and end-all
for it to be seen at a cinema, that’s a big cost so we don’t necessarily look at
box office results. Have they had a similar project or product that has made
money in the past? The answer is normally yes for the ones that we pick, which is
KidsCave, which is DLT, and how is that going to be monetised back for our
investors which will be the sale of the IP, the commissioning of a second series,
that is money back into the coffers. // And in terms of an exit at the end?
Well the rules are such that, you know, absolutely no defined exit period, however when we
see the profitability of the companies and when they’re coming up for third or
fourth year anniversaries, we speak to the owners of the business, you know. For
instance Goldfinch Pictures is owned by us as founder shareholders, so we’re more
in charge of the destiny of that company, but KidsCave is owned by Andrew Baker
and Ed Bignell, so we speak to them and say what do you want to do with this
business? And basically they would have to effect a private sale, because you
can’t do a company buyback of shares before five years, so it would be a
private sale offered to those individuals which is what they’ve done. // A lot of people might think: wow,
investing in media is insanely risky. // Yeah I think a lot of other SEISs and EISs have proved to be exceptionally
risky. Our returns are good returns, they are going to be out
there very shortly amongst the investment world, and people are going to
be talking about it a lot, and often when you deliver returns like that people
will go – really? In media? Well yeah, actually, in media because we’re not
investing in the the razzmatazz of film and entertainment, we’re actually looking
at it and analyzing each of the areas of entertainment and something that we can
touch and feel. Our team is made up of industry professionals and also
accountancy and tax professionals, this is something where there’s a marriage of
both sides of the entertainment business, the show business, we’ve got both – we’ve
got creatives in our midst, we’ve got professional salespeople in our midst,
we’ve got marketing people, actors, producers, all collaborating, distributors –
and then you’ve got myself who, and the reason why I set it up, I’m both
a trained lawyer, a chartered tax advisor but I’ve also been a film producer, I’ve
got over I think 30 or 40 credits to my name on films. And this is the great
thing because we sit as a hub, so we’ve got the producers or developers on this
side and we’ve got the investors on this side, and the investors look to us and
have faith in us and our integrity and the producers look at us to help fund them, so we sit there going, look: if you guys
aren’t going to behave towards those guys then we’re not going to marry you
up. So we’re very critical in many ways, but we’re exceptionally
professional. // And to explain it very simply, typically what would you be doing,
taking a, say, find a company which has an idea for a show or a game, you fund that
company and then it’s, once it’s in production etc., probably someone else
produces it, someone else does it, you start getting the revenue streams, is
that what you do? // Exactly right, that’s exactly right. // And can you give me a quick
few sentences on the difference between what the Goldfinch EIS is, and
the SEIS? // The Goldfinch EIS is a trading company that actively trades as a sales
and distribution agent. What that means in real terms is that it provides
sales advances and actually operates as a sales agent and distributor in film
and TV space. That means that the money that is advanced sits in first position
when the revenues come back. It is run by Goldfinch and Goldfinch’s
team and industry specialists. The SEIS is a range of independently owned
companies for individual projects. So the EIS is a slate within the the trading
company, and the SEIS are effectively a slate over separate companies but all
different producers who we partner up with and help them get their project
through to fruition. // And are the EIS and SEIS linked in any way, or completely separate?
// No, not at all, the SEISs are completely – I find the SEIS investors to be very different to EIS
investors in any event, the EIS is a straightforward trading company for that,
and we run that, we’re the expertise behind that and we bring in other experts
depending whether it’s TV or film, we will choose different people
because it’s very different worlds. In games we bring in absolute experts
who are called Gamesco, who are known all around the country as being a group
of guys who are rocking the games world with the way that they develop
their projects and get them out from a publishing revenue point of view. So we
rely on experts, we’re not the expert of everything but we know people who are.
On the SEIS we’re partnering up effectively with individual producers,
individual developers, for either a suite of projects within that SEIS or
alternatively one game or one film or one project, so it’s very much the maths
on each of those individual ones. So we’ve got a huge diverse, you know,
diverse range of film TV and games to choose from, and our success
with our raise last year has proven its point. So we have
already got a suite of advance-assured vetted SEIS projects that will be done
in that matter. So you won’t find an SEIS that’s sales and distribution –
that’s completely over on the other side, on the EIS side of things.
// So if I was going to invest in an EIS and an SEIS this year, why should I choose you?
// Because we’re proving that we – what we said we were going to do, on the
22nd of January 2014, we are actually proving to people and showing
people we have achieved, which is £1.23 for the EIS and £1.25 for the SEIS,
and there’ll be more of the same for them for the next three years and
onwards, hopefully. We are invested in our own business, we are passionate about
our projects and the results of our projects and we love what we do. That’s great. Kirsty Bell,
thank you very much. Thank you. [Music]

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