Raising money in 2009: Strike One--Tri Counties Bank

I got a call yesterday from a rep at Tri Counties Bank. He had recently come in the week before and sat down with me regarding our needs. I sent him back with a full set of financials and an outline of our expansion plans. At the time, he seemed very positive on the outlook and indicated he would talk to his underwriting department as soon as possible.

I wasn't surprised when he called yesterday without positive news.

He said that the underwriter reviewed our information and that our expansion wasn't in line with "historical growth needs" but rather based on "accelerated needs" which the bank wasn't comfortable with. He indicated that our new opportunity for expansion was great for our business, but something that otherwise scares a lending institution because of the rapid and dramatic rise in the need for capital.

Rather than being open to $750-$850k in financing, he said the bank couldn't approach anything beyond $250k and that would have to be fully secured with collateral. He indicated even this would be a stretch for them. This was different than what he originally wrote in his email:

"We are often much more flexible than our larger counterparts. When we need outside guarantees we can turn to the SBA 504 program, or California Capital (like an SBA for the state of California)."

When I asked about these guarantees, none were volunteered or offered.

To be fair--he was very nice the entire time and I appreciated him coming to the office and sitting down with us the week prior.

I talked with an associate and she said she didn't think the story would be different with any of the other banks. "In this economy, you almost have to prove you don't need the money to actually get the money..."

We'll see...

Raising money in 2009: Are banks lending to small business?

I am going to start a new topic here on the blog along the lines of small business development and funding.

Its always hard to run a small business. Right now, it can be really hard. But that doesn't stop owners from still trying to take on new challenges, establish new markets, and continue the pursuit of growth for their companies.

We're an example of that. I've run Silverado since 2003 as a fairly organic organization--we've generally bootstrapped most of what we do from the very beginning. We do a number of very high-profile things--and we do them very well.

First, we design high-definition editing systems for film, media, broadcast, and independent editors using Apple and Assimilate technology. One of our largest projects included redesigning the TV editing facility at NASA's Goddard Space Flight Center around Apple technology.

Another project includes high-end film finishing software. If you are planning to see Disney's "A Christmas Carol" in 3D later this year, that movie was finished on our editing systems using a product called SCRATCH from Assimilate.

Secondly, we've been at the forefront of helping to transform cinema production with the acquisition of two of the first RED ONE cameras in the world. The RED ONE can shoot in a format called 4K--which is akin to 35mm film grade material created digitally. It is actually a very green process since there is no film development, no chemicals, no processing, and no transporting material back and forth to labs.

We work on this 4K material in our new 5000 sq. foot Silverado Studios facility in Folsom which currently has one fully operational digital cinema editing suite along with two more edit suites and an advanced 4K digital cinema theater in development.

Did you see Lois Wolk's iPhone style-ad during the last election? Shot on our RED cameras and edited at Silverado.

Did you see Cathleen Galgiani's bullet train spots? Shot on our RED's and edited by Silverado personnel.

Our cameras and personnel have shot three full-length feature films including acting personnel such as Jennifer Love Hewitt, Jamie Kennedy, Robert Picardo, and Cybill Shepherd. Our studios also hosted the editorial of the critically acclaimed Timothy Hutton feature film "Broken Hill."

For better--and worse--we've worked pretty much with the existing cash flow of the business instead of taking venture capital, angel funding, or SBA loans. We've used our own resources plus those of a few family and friends along with a local bank for a small credit line which is no longer available.

Because of that, we've been restricted in growth to what we could accommodate on our own. In spite of those restrictions, we've been awarded the following accolades along the way:

2007 "100 Fastest Growing Companies in Sacramento" - Sacramento Business Journal
2008 "100 Fastest Growing Companies in Sacramento" - Sacramento Business Journal
2009 "100 Fastest Growing Companies in Sacramento" - Sacramento Business Journal

2008 "Top 5000 Fastest Growing Private Companies in America" - Inc. Magazine
2009 "Top 5000 Fastest Growing Private Companies in America" - Inc. Magazine

Presently, we're poised to take on a new project in the immediate future which will require outside funding for the first year. The details are under wraps right now (my competitors like to read my blog) but will come out fairly soon. The crux of the matter is that this project will take $850,000 in excess of what we currently have. This new operation will allow Silverado to become a $10M company in about 18 months.

With that in mind, I need a loan. But are banks lending?

My position is that they are not lending. But rather than hem-and-haw about the situation, I intend to determine for myself if banks aren't lending to small business.

The following banks will get a loan application from Silverado Systems, Inc. in the next two weeks:

Sierra Vista Bank

Folsom Lake Bank

First Northern Bank

IronStone Bank

Bank of America ($25,000,000,000 in TARP funding)

Wells Fargo Bank ($25,000,000,000 in TARP funding)

Five Star Bank

Umpqua Bank ($214,181,000 in TARP funding)

River City Bank

California Bank & Trust

California Federal Bank

Imperial Bank

Sacramento Commerce Bank

Sonoma National Bank

Western Sierra Bank

Mechanics Bank

Comerica Bank ($2,250,000,000 in TARP funding)

Tri Counties Bank

Stockmans Bank

American River Bank

Bridge Bank

First US Community Credit Union

Our criteria is the following:

1. We need a loan of $850,000 for a business expansion project that will significantly increase Silverado sales on a national basis.

2. We will move all deposit accounts to the loaning institution.

3. If such service is offered, we will move our credit card processing over to the loaning institution.

We will report the results from every single bank right here on this blog. Either "yay" or "nay."

This isn't designed to be antagonistic, but other business owners are in the same shoes as we are right now--trying to expand their business, but not having much luck getting funding. Plus, a lot of people want to know what is being done with their taxes. When a bank gets a bailout, are they loaning back to the community?

If there are any banks not listed that you think should get an app, please let me know. Our criteria for applying to a bank is whether they have a strong business loan track record.

Note--while this might be a noble experiment conducted for the benefit of ourselves and other Sacramento area small businesses, I am a businessman first. If a private investor walked in the door with $850,000, we'd proceed with our business project immediately. If you're in that position, I can always be reached at torrey@silverado.cc

However, private capital being in the condition that it is today--I don't know if that is plausible. So, we are proceeding with the traditional loan process.

If you are a lending institution that would like to be considered for an application, please contact us at (916) 760-0032.

Further--we'd love to accommodate a tour of our facility. Please call us and schedule a time to visit. We would love to show you around the studio and we can talk about our expansion plans in greater detail.

Stay tuned to this blog for the results.

Starting from SCRATCH: Building 4K editing & finishing systems how-to PDF

I get a lot of questions about how SCRATCH systems are configured, why some things are spec'd, and general costs of these items.

I thought I would answer all the questions in one doc. Its 28 pages long and I am pretty sure it covers everything--including equipping your system for 3D stereoscopic.

You can download it here:

http://bit.ly/2FEYkm

This is a 1.0 doc, so if you have suggestions I am happy to incorporate them into the next revision.

Silverado extending AppleCare to 5 years

In an industry first, Silverado will be extending AppleCare coverage to 5 years.

Effective on all sales after 1/1/09, Silverado is extending AppleCare benefits from three years to five years on the following professional Apple equipment:

Apple Mac Pro

Apple MacBook Pro

Apple Cinema Display

Apple Xserve

When purchased with an appropriate AppleCare plan, Silverado will extend coverage on these items from three years to five years.

During the first three years, customers will obtain service from Apple as normally specified in their AppleCare agreement. In years 4-5, clients needing service can contact Silverado at (916) 760-0032 for service coverage.

At its discretion, Silverado will do the following:

• Replace items that have worn out due to normal use and repair items that no longer function such as ports, logic boards, and cables.
• Alternatively, if a repair is not available then Silverado can opt to replace the system with a brand new equivalent system.

All AppleCare exclusions will apply. Systems cannot be repaired or replaced if systems are not functioning due to abuse, accidents, and non-standard usage (i.e. using a system outside normal operating parameters such as extreme temperatures, etc...)

AJA first to support Final Cut Pro 7

New info from AJA on their support for Final Cut Pro 7:

New Features

• Closed captioning support for Final Cut Pro 7, MacCaption, VTR Xchange, and AJA TV via QuickTime Closed Captioning Tracks - The QuickTime Closed Captioning Track is Apple's defined standard for closed captioning support (all supported KONAs).

• Full VANC data capture and playback support on a per-frame basis for all Apple ProRes formats

• Support for new Apple ProRes formats (requires Final Cut Pro 7):
- All KONAs support new Apple ProRes 422 (LT), Apple ProRes 422 (Proxy), and Apple ProRes 4444
- In addition, KONA 3 supports 10bit RGB/Dual Link capture and playback path using Apple ProRes 4444

• Expanded KONA LHi support:
- Display of timecode in the Control Panel (near the LTC input icon)
- HDMI/DVI detection of colorspace/protocol
- Downstream Keyer added (DSK)
- LTC input implemented
- Analog audio output monitoring selection implemented
- HDMI audio input channel selection
- HDMI input/output auto-detection
- 8 Channel HDMI audio output

• Support for Avid DNxHD QuickTime file playback and video output (KONA 3, LHi and LHe)

• Support for AVC-Intra QuickTime file playback and video output (KONA 3, LHi and LHe)

• Support for Cineform 3D QuickTime file playback and video output (KONA 3)

PDF File on Apple's revised ProRes codec

Apple just posted up a new link to the ProRes codec revision in Final Cut Studio 3:

2009 Apple ProRes White Paper

No more b.stock R-Series Sony Projectors...

For those interested, Sony is now completely OUT of the b.stock R-Series SXRD projectors...

Going forward, all projectors from Sony are the new T-Series T105 and T110 models.

Leasing a Sony 4K projector?

We got a lot of questions after the last edition about purchasing Sony 4K projection systems - one was "Can I lease them?"

The answer is yes. So what do those rates look like?

Here are example rates from a B-stock R-Series projector with lens, input boards, replacement lamp, and installation cage:

24 months - $4445

36 months - $3049

48 months - $2369

60 months - $1969

For comparison, here is a similar set of rates on the new T-Series projector.

24 months - $6668

36 months - $4583

48 months - $3574

60 months - $2963

Silverado Travel Reimbursement for Major Systems and Equipment/Facility Rental

Folks like to get out to NAB to see demos by major manufacturers before making purchasing decisions. Shows like this are a great way to check out gear prior to investing a lot of money in new workflows.

However, sometimes a shoot or edit session will come up and prior travel arrangements get tossed in deference to a job at hand.

We're going to solve this challenge once-and-for-all on high-end systems and rentals with the Silverado Demo Travel Program. Fly or drive to Silverado to see a demo on your own time and on your own schedule--and when you purchase or rent one of the following systems or services you'll receive a 100% reimbursement of your flight or fuel:

SYSTEMS:

Assimilate SCRATCH Systems

Silverado Blackpowder DI Systems

Cine-Tal Color Correction Displays

Sony 4K Projectors

RED Rocket-based Mac Pro Systems

Facilis Terrablock

RENTALS:

Edit Suite Rentals (multi-day)

4K theater rentals (multi-day)

RED ONE camera rentals (multi-day)

Essentially, just let us know what kind of system or rental you want and we'll provide a quote ahead of your trip. After you've made the trip out here to review for yourself, you'll be reimbursed 100% of your flight or fuel upon purchase of the quoted system or rental.

We want to make an investment in any of these systems or rentals as painless as possible--and for some folks getting to a demo like NAB is just not do-able sometimes. With the new reimbursement program, we're trying to take some of the uncertainty out of making these decisions.

There are a few guidelines we need to follow (no first class flights!) so for information on travel reimbursement contact us at info@silverado.cc for more details.

RED Rocket starts shipping...

Jim Jannard mentioned that the RED Rockets started to ship today. Jarred added that the initial batch are in green, while future card PCB will be red.

First picture of the RED Rocket...

Deanan just posted this up over at REDuser...

Adobe CS4 Updates for May 2009

Just got this post from Adobe:

The new CS4 video updates will be available late tonight/Friday morning . These updates contain several new updates and several critical fixes for After Effects.

Some of the new features are:

Major Speed improvements for Media Encoder (new support for RED)
New RED R3D workflow & Raw setting panel
Avid Import & Export (We are currently testing FCP Export)
DVD/VOB support (edit directly off the DVD !)
Faster/smooth AVCHD playback
Faster project loading
New Frame Export
And more......

We also showed several things at NAB 2009 that we have cooking in the Adobe Labs and we are planning to beta test a few of these new features this summer. The plan is to make these available on the http://labs.adobe.com site:

AVCIntra
XDCAM Export
Finalcut Pro Export

You can catch a new video here which shows all of the new CS4 updates and features in action on Adobe TV.

http://tv.adobe.com/#vi+f1510v1005

The 3 updates are:
After Effects 9.02 
Premiere Pro 4.1
Media Encoder 4.1

Blackpowder Digital Cinema Systems released...

Our new digital cinema CPU's are up on the site:

Blackpowder Digital Cinema Systems [LINK]

We are very proud to have worked with Globalstor Data Corporation on these. In our opinion, they are among the best RED and DI systems in the world.

One already deployed to Korea and another to Walt Disney Company...

Want to optimize your DIT work on a RED shoot?

This just came via email: 

"Things have really ran quicker, smoother, better here than any show I've been on in the last year and a half and I've done well over fifty unique RED shows.  The gear you sent me out here with totally kicks ass and makes the process of data management, dailies creation a lot faster and tranparent allowing me to put more concentration on the creative editorial process and ultimately offering more to a production."

Want to know more? info@silverado.cc

Want to raise $2.0M for your next movie?

You want to raise some money for your new film? Do this:

1. Go out and buy MovieMaker's most recent issue (#80)

2. Read pages 28-29

Fantastic article by Jeffrey Goodman--who was determined to raise $2,000,000 for his film. He actually did it and has a feature under his belt to show for it:

The Last Lullaby [LINK]

You can also follow his weekly blog "Adventures in Self-Releasing" [LINK]

Official Silverado Predictions for WWDC

Apple's Worldwide Developers Conference kicks off Monday, June 9th 2009 at 10 AM.

Here is what I think is likely happening this year at WWDC:

• Snow Leopard--released? I'd have to say no. But release date announced? Yes--I'd call this at 100%. Apple recently froze the API's for Snow Leopard, so there shouldn't be much more under-the-hood work to do there.
  
• iPhone OS 3.0--I'd have to say this is 80% yes. Why not 100% There has been a lot of chatter about background apps--and whether the policies that will govern the behavior of those applications has been decided upon by Apple.
• New iPhone hardware--I'd say 100% yes on announcement. 50/50 on shipping. If OS 3.0 is delayed, you can guarantee the new phone will be delayed as well.
• New iTablet or iPad?--Maybe... I'd give this a 25% shot

Here is what I think is NOT happening at WWDC:

• No new Pro Apps (no Final Cut Studio, Final Cut Server, Aperture, Logic, Color, etc...)

Why? There are a few reasons.

First--WWDC has never been a creative show--its a development show. Correct me if I am wrong, but no Apple Pro App has ever debuted at WWDC. This is totally the wrong crowd for this type of introduction.

Second, the most logical prior opportunity for Final Cut Studio to debut would have been NAB last month. However, that didn't happen. I think that is because the new pro software is based much more heavily on Snow Leopard than people think. And 10.6 hadn't deployed yet, so there is no use in hyping features based on other software that can't be discussed yet.

Finally, why do two major launches at the same time? Snow Leopard is big enough, why complicate the mix with doing two simultaneous introductions? Remember the Mobile Me launch? One fumbled product release was bad enough. However, doing two at the same time--one to a hypercritical professional audience and the other to dozens of millions of customers--is a potential PR blunder if one or the other should stumble.

Last--will Steve Jobs show up to do "one last thing." No clue one way or the other, but I'd like to think so.

Answers to 5/15 Twitter Contest

Our 5/15 Twitter challenge was tough. Here are the questions (and answers):

QUESTION Setup: About the new movie starring Jennifer Love Hewitt.

QUESTION 1 of 5 - Name of Jennifer Love Hewitt's current feature (Cafe)
QUESTION 2 of 5 - Name a co-star (Jamie Kennedy)
QUESTION 3 of 5 - City of shoot (Philadelphia)
QUESTION 4 of 5 - Name a producer (Chris Wyatt, Sean Covel, or J. Andrew Greenblatt)
QUESTION 5 of 5 - Name the famous movie the producers shot prior to this project

For #5 we were looking for "Napoleon Dynamite", but "Twelve" was submitted and that technically counts.

Winner is Tim Schultz! BTW...most of the answers for this could be found here [LINK]

Cafe is being shot on two RED ONE cameras from Silverado. We're also handling data wrangling, assembly editorial, and final color correction.

How black is black on an LCD? Try the iPhone Black Level Experiment...

If you are using an LCD, how black is black? Try this experiment.

If you have an iPhone, turn it off. Go into a pitch black room (I mean PITCH black--no light leaks--totally sealed).

Then, turn on your iPhone. The Apple logo comes up--you can just cover that with your thumb.

The bright gray glow you see emitting from your iPhone? That is "black" on an LCD. But it turns out its not really that black is it?

In fact, its such a bright gray, a fully "black" iPhone display can illuminate a dark room.

This is the problem with using generic LCD's for color correction. Their black level isn't black enough, so your colors get washed out and muddied.

Try it sometime...

StudioBuilder 04.30.2009

Hope you had a good NAB week. We've got a few things cooking for this week--every one of which will save you time and money in production and post.

AJA KI PRO PRE-ORDERS

The AJA Ki Pro is a tapeless video recording device that records high-quality Apple ProRes 422 QuickTime files onto computer-friendly media. Because it features SD/HD-SDI, HDMI, and analog inputs, you can interface with virtually any type of camera you might own or rent.

AJA's new Ki Pro was a hit at NAB. If you haven't seen the Ki Pro in action yet, take a look at this video: http://www.aja.com/products/ki-pro/

This new device is definitely going to streamline the time from production-to-post. I think of some new application for the device on a daily basis.

The Ki Pro is $3995 and AJA is already accepting reseller orders for this unit to ship this summer. Like other vendors, we're accepting pre-orders, too. However, we're making a Silverado order a little more worth your while.

With every Ki Pro pre-order between now and 5/15/09, Silverado will add a 250 Gb Ki Module at no charge--a $265 value.

You can place your AJA Ki Pro pre-orders here:

http://silverado.cc/shop/product.php?productid=1120

GEARNEX GEARED HEADS A HIT AT NAB

You know you have an awesome product when Jarred Land walks up to it and says "This thing is badass..."

We showed the Gearnex Geared Head at NAB to rave reviews at FCPUG and REDUser. The units also got plenty of play at the AJA and Panasonic booths.

While the NAB special of $3995 is now over, we have a post-NAB window where the price is $4995. That is a $1000 savings over the $5995 retail price.

http://silverado.cc/shop/product.php?productid=1118

Use the code GEARNEXRED (in the checkout notes section) through 5/3/09 for a free swivel/tilt arm.

MOVE UP TO 800GB TAPE WITH CACHE-A PRIME-CACHE LTO-4

We showed the new Cache-A LTO-4 product at REDUser 2009 last week in Las Vegas to a lot of very interested data managers.

One of the neatest things about this product is backwards compatibility with current LTO-3A archives. If you have a library of LTO-3A material, then the new Cache-A LTO-4 is the perfect way to move up to 800 GB tape, while retaining compatibility with your existing archives.

Units ship in mid-May. Pre-order your Prime-Cache today and we'll throw in 4.0 Tb in free LTO-4 tapes and a Pelican travel case at no charge.

http://silverado.cc/shop/product.php?productid=1119

SILVERADO TWITTER CONTESTS

We'll be building up our Twitter followers over the next few months with some fun contests. When we get to 500 followers, we're going to give away a free Blackmagic UltraScope.

But! In the meantime, we'll be doing fun giveaways at random. We got a copy of Shake v4.0 that we're itching to give away. So, follow our tweets and you might just get lucky:

Silverado Twitter [Link]

SILVERADO PRODUCTION UPDATE

We think its more important than ever to stay involved in production and post. There are a lot of vendors you can buy from, but how many of them are just order takers?

At Silverado, we support projects as small as music videos all the way up to feature films. We recently completed editorial and color correction on a RED video that involved a Gulfstream jet, two Lamborghinis--all for a budget that would shock the senses.

We're scheduled as the RED rental house for a feature project in Philadelphia along with assembly editorial and color correction, and in June we have a feature starting work right here in Folsom which we are going to support with cameras and editorial.

What does this mean for you? If we sell it at Silverado, its generally because we've tested it in the field and feel confident about the products capabilities. If you ever wander through our webstore and wonder why we don't sell something--its because we aren't the Wal-Mart of professional video.

We don't want to sell everything--just the best products that work. We think that the best place to determine that is in actual use in the field and the edit suite doing real work.

If you ever want to stop by and see the suite and our reel, please let me know at torrey@silverado.cc and we be thrilled to accommodate a private showing.

NEXT TIME:

More updates on NAB releases--too much stuff there to put into one update.

Also--WWDC is around the corner so we should start to hear rumblings about Final Cut Studio 3 updates.

tl

Digital Cinema Society NAB Video Wrap-Up

Digital Cinema Society posts massive video log wrap-up of NAB:

DCS Video Wrap-Up of NAB [LINK]