INVESTING IN HOLLYWOOD MAKE SURE FUNDS ARE SPENT ON PRODUCTION    During fundraising, it is common for the moviemaker to set up an escrow account to hold investor funds. The money stays in the escrow account until the filmmaker raises the minimum necessary to produce the film. If the filmmaker cannot raise sufficient money, the funds in escrow are returned to the investors. By depositing money in an escrow account, investors are protected because they know none of their capital will be spent unless and until all the money needed to produce the film has been raised. After funds are disbursed for production, there should be a system of checks and balances to ensure that all monies are properly spent and accounted for. A budget and cash flow schedule should be approved beforehand. Production funds should be placed in a separate segregated account and not commingled with the filmmaker’s personal funds. All checks withdrawing funds from the account should be signed by two individuals. Investors may want to insist that one of the signatories is a trusted person selected by the investors. back