How to Raise $120M with Greg Centineo

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22.11.17

Episode Summary

For the body to be healthy the brain needs to be healthy. Join Dr. Steven Masley as he explains why having a healthy heart is a better brain solution. Learn how your heart rate tells a lot about your brain functions and how exercise is the best way to live healthy. But having a healthy body will require proper nutrition. Discover how all these factors make for a healthier version of you.

Today’s guest on The Successful Pitch is Greg Centineo. Greg has quite an interesting background as it relates to the entertainment business. He rose over $120 million for an animated film made outside of the system. Imagine trying to go up against Disney and Pixar and raise money for an animated feature, the team hadn’t done it before and there’s a recession going on. He has all the skills about how to have perseverance, tenacity and how to create trust with total transparency. He said, “You want to really figure out how to get people to trust you, like you, and show that you have your own skin in the game.” Enjoy the episode.

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How to Raise $120M with Greg Centineo

Today’s guest is Greg Centineo, who is the co-founder of Pulse Evolution Corporation. Recently, he was not only the Executive Producer, but headed up how to take that from DVD to worldwide distribution of Legends of Oz: Dorothy’s Return. We want to ask him about that. He successfully completed production and promotional funding for the largest budget animation feature film ever produced outside of the studio system. He has leveraged his skills in structured financing that he honed early in his career at Washington Mutual. Through his groundbreaking funding strategies, Greg has successfully raised $120 million and 100% of the film’s required capital. Greg, welcome to the show.

Thanks, John. I appreciate being here with you.

I know that’s just the tip of the iceberg but I saved the best for last. I’m going to ask you to take us on your own journey. One of the things that obviously is so interesting about you, there are many things, but tell us about what you did with Michael Jackson in a hologram?

That was actually a backyard startup with some great, great minds and skillful intelligent people from the digital space of special effects. It was an idea that was nurtured from backyard right to a public company, but the idea was started with Tupac. They decided to bring Tupac with Dr. Dre. Snoop had the idea of, “Can we bring Tupac on stage with us at Coachella?” A team of digital animators sat down and figured out, “How can we do this? How can we take it off of a screen or a monitor and bring it live?” It started with Tupac. It was a huge success at Coachella back in 2012. One of the light bulbs that went off was right after that, Tupac, who had been deceased for twelve years, all of a sudden his music was back in the Top 10 Billboards. The estate was seeing massive money coming right back to them now after twelve years.

That’s when the light bulb went off and said, “There might be something here of bringing back deceased musicians, entertainers, etc.” John Textor, who came up with the idea of creating a company called Pulse called me and said, “I know what you did with the animation film. I need your help.” We sat down with his amazing team and masterminded a way to bring Michael back and the rest is history. When we launched Michael at the Billboards, that Billboard show created 98 billion mentions worldwide. That was phenomenal. That opened up many, many doors with the Elvis’ estate, Sinatra’s estate, Marilyn Monroe’s estate. The only thing was if that company was public at the time, it probably would be a different situation today for that company, but they went public about three months later. That was a really exciting project.

I like to open with a little bit of sizzle. It doesn’t get bigger than that. It’s iconic. If you would take us back, Greg, nobody starts a career in their life getting to do something that impressive, what were your dreams when you were growing up?

I grew up in Brooklyn. It’s a little bit fuzzy for me when I go back. I think I always had this real entrepreneurial spirit. I didn’t want to do what everybody else was doing. I didn’t want to conform. I didn’t want to get a regular job. I didn’t want to work 9 to 5. I was wondering about bigger questions, the meaning of life. I always kid = and my first existential crisis was when I was five.” I was always philosophical and wondering. I wanted to find meaning in life. I realized early in life, if I’m doing something whether I’m working at Foodtown in Brooklyn putting out produce in supermarket and I didn’t like it, I didn’t find meaning in that so why do it? At an early age of sixteen, I left Foodtown. I said, “I’m not going to have another job again in my life. I’m only going to do what I love.” I did that ever since. I set out a course in my life and said, “I’m going to look for opportunities. If I find something that I think is worth doing, worth getting out of bed for, I’m going to get out of bed and do it and I’ll put everything I have into it.” That’s how I live my life.

Did you have any bumps along the road? Usually, whether you’re working for somebody else or working for yourself, there are some lessons that we have to learn about resilience, for example?

Life is tough. There is no question about that. It’s tough for everybody. The only thing to have is tenacity. You’ve got to keep going. I had tremendous amount of obstacles that I faced. I just had this drive in me not to fail. I wanted to succeed at whatever it was that I was doing. I started way back. I go back to the day when I was in my mid-20s, I became a youth minister, believe it or not. If you want to talk about learning a lot, I went into the institution church. A guy like me who’s a free thinker and wants to experiment, the goal is to reach people and make life meaningful, you’re going to rub some people the wrong way in leadership. I learned in those early days how to co-exist in a traditional setting and yet I was very non-traditional. That helped me out a great deal and also with my communication skills. I was probably speaking three, four times a week. I was speaking to the toughest audience that you can speak to, highschool students. If you can keep their attention you can keep anyone’s attention. It started there for me but I always felt even then, I wanted to do things well. I wanted to succeed. I wanted to impact people’s lives.  It went from that to other industries. I decided that I felt I could have a better effect on people’s lives if I didn’t work in such a conservative traditional model and went out into the real world and just spread my wings and fly.

Tell us how did you get involved with Legends of Oz: Dorothy’s Return? For those people who may not know about that, paint the picture for us on how this became such a big animation feature film?

It started out as just an idea. It was a small independent production company out of California that burst the idea of taking some of the great Oz sequels by Roger Baum, who is the great grandson of Frank Baum, the author of The Wizard of Oz. They had the idea to take the series of books and, “Let’s go out and try to make animation films.” They were already doing live action films type. It was a tremendous leap into animation because that’s a real specialized industry, the best were Disney, DreamWorks, and Pixar at the time. Often, they’re really high-budgeted films. Typically, independents stick around the $2 million, $5 million range and you get them into animation film. Starting out as a DVD, you’re looking at $20 million, $25 million budgets. I got approached. I had no experience in that industry but I had a good reputation of understanding how to leverage, how to structure things and also how to persevere and get things done. I got a random call one day from that CEO. He said to me, “I need some help. I have a great idea.” He introduced the idea to me and I said, “No. I’m not interested.” He said, “But I didn’t even tell you the whole thing.” I said, “You don’t have to. I don’t want to get involved in Hollywood or movies.” It’s not my thing. He pestered me, and I use that term lightly. He pestered me for seven months. He would call every other day.

I finally looked at what he was doing. I really took a deep dive into it. I remember walking away and I thought, “These guys will never do this. This is an improbability.” No independent has ever done anything like this in the history of Hollywood, plus we were in the middle of a recession. How do you raise money in a recession with an independent who has never done animation?

Wrong time and not an experienced team, that’s usually the kiss of death, isn’t it?

How to Raise $120M: I would wake up in the middle of the night and I’d think to myself, “What if these guys succeed?”

Absolutely. That’s why I said no for seven months. What’s funny is I would wake up multiple times a week in the middle of the night, sweating. I knew the idea was good. I knew the industry of animation was lucrative. I knew no independent has ever played in it. If we could succeed, it could be huge for us. I would wake up in the middle of the night and I’d think to myself, “What if these guys succeed?”

That’s the question, “What if?” That is a great thing to say to a potential investor, to yourself, to anyone you’re trying to get to hire you to be a client, “What if?” You paint a picture for someone or even yourself if you’re selling yourself on this idea, it sounds like. That’s such a great phrase. What was it in your background that made them even reach out to you in the first place thinking you could do this?

I spent some time at Hollywood with producers and actors just teaching in concepts of leveraging money. Most people had never been taught how to leverage money. Most of humanity is taught how to give it away. You pay your mortgage. You’re paying your principal and interest. You pay your principal. It lowers your balance in your mortgage but you didn’t lower your payment and you just gave the money for free. What do you think they do with your money? They invest it. We’re taught how to give it away, not to leverage. I was teaching leveraging principals like Robert Kiyosaki’s Rich Dad Poor Dad. It’s just helping people rethink how to handle money. I did a good job in Hollywood with a lot of producers, directors and actors. My name got around. I never did this. Actually, he called me, “Do you raise private equity?” I said, “Yeah,” but I didn’t, John. I never tried, so how did I know I couldn’t? That’s how I look at things. Of course, I raise. I don’t know if I can. Why would I say no? That’s how the conversation began.

When I was an executive producer on the project, an investor would contact me and say, “I’m interested in this project.” I would sit with him and I would tell them, “This is probably not going to happen. We probably will not succeed on this. Most definitely will not succeed on this because look at the obstacles.” I don’t like the term pitching. I like presenting what you’re doing. What I was doing is what I believed in. What I was doing, I have my own money.  What I was doing, I wanted to see come to fruition. I would say to potential investors, sitting and talking with them and say, “You’re going to lose your money. There’s no question. At this point, you’re going to lose all your money.” They will look at me and say, “Can I ask you a question?” I say, “Yeah.” They’ll go, “Are you actually helping this project?”

There are a couple of things you said there that I want to underline for the listeners. Number one, you are passionate about it and you put your own money in, if I heard you correctly. Is that right?

My money, my family’s money, my siblings, my nieces, my best friends, everyone. That’s where it starts.

[Tweet “Be transparent to build trust.”]

That’s what investors tell me time and again, Greg, and you’re just a living example of that. If you expect them to put their money in, they want to see that you have your own skin in the game, that’s number one. Number two, what I really heard here was you were completely transparent and trustworthy saying, “This is probably not going to work,” as opposed to painting something that was so unrealistic and giving them all the objections to say no. You already took all that away upfront and said, “This probably isn’t going to work. You’ll probably lose your money but here’s why I’m doing it.” That disarms people. They said, “Are you helping this project?” They know that you’re not lying to them and even you’re not lying to yourself, right?

[Tweet “Be transparent to build trust.”]

Exactly, John. By saying that, it’s just being honest. I really felt the monumental climb that was like climbing the Mt. Everest in sandals, shorts. Just be honest about it. A person would look at me and say, “Seriously, you’re trying to help the project?” “I am.” They’d go, “That sounds a hell of a way trying to help the project. Telling me I’m going to lose my money.” I said, “You are.” He said, “I have one more question. If I’m going to lose it, why would I give it to the project?” This is what I would say to them, “Just in case we pull it off.” Bottom line, all we own in this world is an opportunity. Again, I would say this to them, “The project is not what you’re looking at. You’re looking at me. Your bet is on me because that thing doesn’t even exist right now. I’m being honest. It’s going to be a hard road. It’s going to be a difficult climb but what I’m going to guarantee you is one thing, I will do everything feasible in my power to make this happen. Bet on me.” That’s the bet.

I can’t say that enough. You sell yourself first. So many founders, when they’re pitching for investors, whether it’s an app, movie, whatever it is, they think it’s the movie or they think it’s the app or the product that people are putting their money in and it never is. It’s all about the team, your own personal why, and your own personal passion.

John, I’m not a fund man, I don’t raise money. I build companies. That’s what I get into situations. I’m not a fund raiser. Anybody that’s building a company who is passionately involved, you have to ask for money. There’s no way around it. If you’re a CEO, you spend the good bit of your time bringing money into a company. It’s just how it works. For me, I look at two things. I get called by companies all the time to help them. I’m very selective. I’ve done maybe four companies in my entire life because I’m choosy. I look at the leadership and I look at the idea. If the idea is good, that becomes secondary because what comes primary for me is leadership. The ability to execute because in getting any project to the finish line is all about leadership and execution. The greatest idea, some of them are still in garages because they’re just going to leave it.

That’s the question that you’re actually answering is why are you uniquely qualified to execute this idea. You raised $120 million, a little over that, to make this Legends of Oz: Dorothy’s Return happen. Did you do it in big chunks? Was the first part of that fundraising the hardest? How did that all happen?

How to Raise $120M: There are always obstacles.

It’s always the hardest the first part. That’s what I originally thought but it’s actually hard throughout. There are always obstacles. The production company, they were working on the project probably three years before they engaged me. They had raised money the traditional way like Hollywood independents raise their money. When I got onboard, I had a look at this. We were right in the middle of a recession. As a matter of fact, everybody around me said, “You shouldn’t even do this. No one’s going to put money into anything right now.” There weren’t. Banks are going bankrupt. Countries are going bankrupt at the time and then Bernie Madoff, horrendous environment. Nobody was going to write you a check for $50 million if they had it because they were worried about their own accounts and assets as everybody was. What happened, John, one of the aspects that nobody saw including myself was that all of the traditional investments that we know: real estate, stock market, 401(k), everything that we traditionally would invest in, was on fire. What I didn’t realize was we were doing was something alternative to this. People started to look at this and go, “This is different. This is an alternative to everything else in my portfolio that’s burning.” People were losing 30%, 40% in their IRAs at the time. People would take a ticket on us and say, “Here’s $25,000,” and they hand in balloons.

You were taking amounts as small as $25,000 and you ended up raising $120 million, that’s staggering.

Absolutely staggering; $25,000, then we moved it to $50,000, then we moved it to $100,000.

It’s still buckets of water out of the ocean, isn’t it?

Very difficult.

How long did it take you?

It’s not just me. It took a team of people years to do that. It was probably a six year endeavor. I think we were officially probably in 2008 right to end of 2013. It was thrilling in a lot of ways because it was so difficult. The obstacle was so large in front of us. I just tell people too, “This is good for the audience and if you’re out there trying to build something.” People always ask me the question when it was over, “You must have amazing belief that you can do this.” I said, “Not belief. Do you think there was one day I ever woke up and I thought I can do this? Never.” If I woke up on a Tuesday morning and thought, “The goal was $100 million.” I never believed we would do it. The difference was I never stopped trying. That’s the difference. If I believe, you’ll put me in a straitjacket at that point. There wasn’t so much to believe. There was belief there but I didn’t even want to know. I didn’t want to know how much anybody was raising. It didn’t matter. When you got a number like $100 million, even if you raised $5 million, that’s a drop in the bucket. Who cares? Don’t count. Just put your head down and do the work.

What did it feel like to actually see the movie for the first time knowing all that work, all those pitches and presentations as you prefer, came to fruition to make this into something?

It was incredible. The first time I saw the film in its entirety, meaning outside of a storyboard or automatic was in 2012. To watch it from start to finish in color, to be honest with you at that point, it was great but at the same time, I was a little bit disappointed in some of the storyline and some animation. I actually was in a dinner that night with the president of the studio. It was not a real good meeting for him because I was a little bit upset of what I saw. It didn’t even go so well with the president. I was really unhappy with the quality of film at some levels and also the storyline. The truth of the matter is they went ahead and that was the first roll in filming. They made the right changes. They brought another people. The film actually developed itself really, really well. It’s a fantastic show. It’s got five stars in Netflix right now. It was beautiful.

I remember talking to Bill Damaschke a couple of years ago. Bill was formerly the Chief Creative Officer for DreamWorks for 25 years. He called me a couple of years ago. We’ve talked and he congratulated me on the achievement and the enormity of the project. He’s like, “I had a question for you. The animation in the earlier scenes compared to the scenes in the world of Oz were different. The Oz animation was spectacular and brilliant.” I said, “Yeah. We were raising money the whole time. Making the film while raising money.” No one ever thought we’d raise all the money so the quality of the animation in 2009, 2010 was based on what was coming in on a monthly basis. The big year for us was 2011. When we brought in enough money in 2011, it changed the entire scope of the project. That’s why the animation changed because we were able to put heck of a lot more money into the animation. Not just the film, we were able to make it a musical. We were able to bring on A-list cast and build a franchise which was licensing in transmedia. We had major licensing in that film.

The really important point here is you didn’t pitch all of that when you were getting the money for the movie. You just pitched to get the movie made. That’s the mistake I see a lot of people making is, “We’re going to boil the ocean. None will be this and this and this and this.” You need to keep it very focused that your money will go to make the movie. Once that’s done, all these other things can happen, but like Amazon just sold books, you’ve got proof of concept. Don’t you agree with that principle?

How to Raise $120M: You have to scope out what the strategy is.

I do to a certain level. You have to scope out what the strategy is. In the first three years, there was a ban in animated film. When we got to that point, I think it was $33 million raised. We knew we had the film locking down. We made a decision to go from that to go to 3D and to create a franchise. Once we’ve locked the film down, we said, “Let’s go for it.” The thing was, “What are we going to do? Will it be a small release or going to be a DVD? Let’s go for it.” At that point, we sat with the investors. We explained the strategy and the vision. What do we take? We have another $77 million to go for this. Those are big numbers especially in 2010. We felt that we did the first round and we got the budgets for the film, we should move to the second, we should go for it. Who knows if we’ll have this opportunity again? We did them.

Let’s talk a little bit about what you’re doing at Pulse now. That’s the present, correct?

No. I finished Pulse in 2015. I’m not a manager. I go in, I help, make it come to a certain point. Get it to delivery, get it to market and then I’m done. That’s not my skillset to manage something. I went on after that. After Pulse, I went on and worked with Bill Damaschke and his team in Broadway. I helped them with their first Broadway show called Half Time, which comes out at the end of this year. That was a great experience for me. I do a lot of consulting with those out there trying to launch companies, projects or raise money in the market that we’re in and the economy. Now, I took a role with Preatech, which is a really phenomenal company. I said I’d probably never do anything like this again, but I actually said yes to Preatech because I was so enamored with their technology and their concept in the advertising space.

They’re named the number one startup of the year back in 2016. What you’re doing is really interesting I think. You’re taking your experience from the entertainment world, taking it to retail, if I understand it properly, in this whole gamification of getting people engaged that way. Is that a fairly close description of it?

It’s right on. It’s taking gamification, which is growing to a $5.5 billion industry. Anywhere you look in society, somebody’s on their phone playing a game. Gamification is a huge part of how culture and societies are geared. It’s about fun and being entertained. They apply that concept to advertising. Advertising in general is a push. They push things on. If we watch hockey and there’s a commercial, we walk away. We fast forward. They hit us with a banner ad. We can’t exit out quick enough. It’s a constant push. What Preatech’s concept is, “Let’s do a poll.” This is beautiful idea, that’s why I did it. I thought this was groundbreaking, this is pioneering and it works. You walk over to the kiosk. It’s a nine-foot iPad in the middle of the mall with 5 foot screen, you can touch it. All of a sudden, all these brands are on there. You get a chance to play for free and play to win something like sweepstakes. Let’s say hypothetically you pick Auntie Anne’s Pretzels. You get to play a game whether it’s Wheel of Fortune, Jeopardy, or one of the other twelve games that they have right now. You play the game, win or lose, you now have a chance to win something in Auntie Anne’s, whether it’s pretzels for a year, 50% off of the pretzel, or you buy one get one free, whatever it is that Auntie Anne’s provides. You play the game for free then you get a coupon. It goes to your mobile app. All of a sudden, you go back to Auntie Anne’s. Why? Because you wouldn’t have played for it unless you wanted to eat it.

One of the things that I’m really impressed with, Greg, is that it’s games that people already like and know how to play: Jeopardy, Wheel of Fortune. We know what that is. You’re not asking us to try and learn a new game at the mall. We’re like, “I know this is fun. I’m really good at this versus that. I’m going to play this game and I’m going to get something that’s the prize would be right here at the mall.” It’s just all so synergistic. That real expertise was coming up with getting the rights obviously, to get that game that is not a foreign game because you’ve taken down all the barriers to get the people to participate.

That’s the genius of it. It really is. They launched in Tampa and Orlando. Now, we launched third quarter in Chicago, Los Angeles, New York, and Philadelphia. For me, usually I don’t come in this late stage but this was an eight-year startup before they got that. They just got to market first quarter this year, John.

What are you looking for now? Are you looking for an investors for this? What’s your goal?

They’re in the final round right now, capitalizing the company. They’re looking for investors at this point, final round of investors. They got to get this thing to the next level.

Is revenue already coming in so you’ve got proof of concept?

Proof of concept is in, it’s working. They’ve got revenue now. The goal for the company is get it to the major cities. They got some really great partnerships out there with the top number eight media company in the country. They’ve got relationships with all of the malls in America. They’re going to airports, arenas and stadiums. This is great play.

Greg, you have been one of the most entertaining guests, I have to say, because of your entertainment background. I feel like I’ve not only learned a lot about pitching, but learned a lot about the magic behind the magic as it were. I can’t thank you enough. Is there any final piece of advice you have for the listeners?

How to Raise $120M:Proof of concept is in, it’s working. They’ve got revenue now.

I would love to give them as much as advice that I can. My time is always limited. Just go to my website, GregCentineo.com. I’ll have something special for you guys. There’s value you can download. Some of the things that I’ve learned, the things I value, that help me achieve the success that I have achieved in moving investors along and seeing the bigger picture, help you build your companies, and hopefully raise some funds and get these projects to the finish line.

Thanks again, Greg.

Thank you, John.

Links Mentioned

• Greg Centineo
• Pulse Evolution Corporation
• Michael Jackson in a hologram
• The Wizard of Oz
• Rich Dad Poor Dad
• Legends of Oz: Dorothy’s Return
• Preatech

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