A movie pitch--this time to angel investors.

Standing before a roomful of investors at a recent Maverick Angels meeting, Ben Chambers is telling the story of a mythological creature that is at the center of the animated feature film his company, Toonacious Family Entertainment, hopes to produce.

It's just another day in Hollywood. Right? Not exactly.

While Chambers along with the firm's other founders, Bo Ferger and Tony Bancroft are, like so many in Hollywood, hoping to get financial backing for a movie, the audience they are pitching is anything but the usual studio suspects.

Toonacious is hoping to bypass the studio system altogether and instead raise the funds it needs for a distribution deal from the angel investment community.

The Burbank-based company says it is looking for $1 million to finish its script and produce a teaser that it then plans to take to distributors. That way, executives say, they can own not just the movie idea, but the franchise opportunities that they hope will arise from it as well.

"You can go to a studio and have the studio purchase the rights and in essence the studio controls the destiny of that property," said Toonacious President Bo Ferger, an animation technology veteran whose credits include Warner Bros. "We aspire to create a property and then basically take that property as far as we can take it--building a franchise and being in control of building that franchise versus being a director in a movie controlled by a studio."

Although it wouldn't be the first time angel and other venture capital funding is used to produce a feature film--Andy Garcia's independent project, "The Lost City," due to open May 12, was financed with two principals from M&A firm Platinum Equity--the route Toonacious is taking is certainly atypical. And even when independents end up with financing from outside the Hollywood community, it is usually not before they have exhausted the more traditional avenues, as was the case with "The Lost City."

Looking for partners

But the Toonacious team, which has already pumped about $100,000 of its own money into its project, hopes to find venture capital partners to finance what it sees as a franchise opportunity based on a film.

Ferger, along with Bancroft, who co-directed animated Walt Disney hit "Mulan" and has creative credits on many other Disney animated hits, and Ben Chambers, a broadcasting veteran and voice-over artist, met through their church and set up Toonacious in Burbank five years ago. They began developing the idea for their current project while also developing faith-based direct-to-video feature, "Lenny & Sid," and providing work for hire for the major studios in Hollywood.

But as the idea for their feature project developed, the team saw the potential for, not just a movie, but licensed products and all of the auxiliary businesses that can come from a highly successful kids movie.

If they sold their idea to a studio, they would be selling the franchise opportunities as well. So the founders instead turned to the traditional finance community, hiring C&I Partners, business development and strategy consultants who help early stage and mid-market companies to raise capital and hone their business models.

"The whole point is to build that franchise like the "Star Wars" or "Toy Story" franchise," said Ozan Isinak, principal at C&I. "That's where the real value is."

Refining the pitch

With the help of C&I, Toonacious put its pitch into terms that investors, used to dealing with technology, real estate or even manufacturing companies, could understand.

"What we had to do is we had to translate investing into an entertainment project into investing in a widget company or a franchise," said Isinak. "You deal in terms of exit strategy. We had to explain that your exit strategy is basically the day the feature goes into the box office. Another big thing is time to market. It takes two years from beginning to end and these guys are used to a revenue stream throughout the two years. In a feature film, there is no revenue stream, and that's something we had to educate the investors on."

Back at the Maverick Angels pitch meeting, the tale behind the movie, which seems to have the audience enthralled, is but a portion of the presentation.

The Toonacious executives are spending as much, if not more time, with a slide show that discusses the typical box office gross of animated films, its sourcing for computer generated animation and the businesses from which revenues could be derived.

Investors in the film franchise would get a 5 percent stake, entitling them to all revenues derived from the project, be they the film's box office, DVD sales or toys.

Although the movie could, conceivably, bomb, Toonacious officials rattle off the odds: animated films gross an average of $360 million worldwide, and at least one animated family film has been among the top five box office performers in six of the last 10 years, with two holding top five positions in three of those years.

Three of the top 20 highest grossing films of the last 10 years were animated children's films and they grossed a combined total of over $2.5 billion.

The industry numbers help give the investment context, but in the last analysis, Toonacious executives say, they are selling the same thing the owner of a widget company sells when asking for investment dollars.

"From a business perspective, it's the same way you mayor may not know about a widget. You have to know that we have the right market. We have the right management team."