How to Invest in an Indie Film

If you’re investing in a film as an individual, it’s probably an indie film. Indie doesn’t mean “arthouse” but any film that’s not made by a big studio.

If it’s not a big studio, it’s probably got a humble budget. “Ultra-low budget” is anything under $300,000.

Even if you’re rich, then unless you’ve invested in a film before, I would be quite surprised if you were going to solo-invest in a film with that kind of budget.

Finding a Project

Filmmakers and directors are always hunting for money. If they catch wind you’re actively looking for a film to invest in, you’ll be petitioned.

Instead, it’s probably wiser to go into those circles where filmmakers gather already and just talk to them. Film is a relational industry.

If you meet someone, like their project/script/plan, ask them about their budget. At this point, they probably sense you’re curious about investing.

If they’re smart, they’ll play it cool.

Investing in Film is Still an ROI Calculation

Sometimes you’ll see a good project, but the amount of money it needs doesn’t match what you think it’s worth.

Someone may have a great idea that could bring in $100k—but if they’re asking for $250k, it’s a terrible, terrible idea from an investment perspective.

Hey, maybe you still want to invest for the pure art of it. That’s cool, but you’re no longer investing, you’re buying and donating (unless this is some kind of braindead tax-loss harvesting strategy).

In the spirit of asymmetric investing, try to get the potential risk-reward calculation up. If you’re investing asymmetrically, you probably have a number (e.g. 4:1 upside).

With a 4:1, if you’re investing 25k, you only want films you expect to gross 100k.

As for me, I like low budget because the risk-reward calculation looks better.

The movie doesn’t need to do as big for you to at least make back your principal investment.

If the film flops, you lost less.

The greatest example I can think of for this was the film Velocipastor, the heartwarming tale of a pastor who gets cursed with the ability to transform into a dinosaur. He uses it to fight ninjas. This is a real movie.

With a budget of just $35,000, the film took off on Prime streaming and has been seen around the world (I saw it, it was perfect).

It was funded by a lone investor because they thought it would be funny. While finance details for the film don’t seem to be available, the director doesn’t seem to have made much from it, but I would guess it’s safe to say the investor made their money back.

Directors will still work even if they don’t make much money. It’s in their blood. And one successful film (even one like Velocipastor) means they’ve made their name and will net million-dollar contracts for their next film (as that director did).

Make a Contract: Money Back, then Percentage of Profits

Create a contract where if you’re investing cash, you get all of your original investment back before anyone else.

This is standard practice. Films are hit or miss. It may be their baby, but it’s your money.

Let’s say you put in $25k. The very first $25k the film makes goes to you.

Then after you get your initial investment back, you also get a percentage of income after that (e.g. 20%).

“Revenue” is typically ticket sales and streaming revenue, or film rights if you sell it. Basically, it’s however y’all are planning to monetize it. Just make sure you get it clearly defined in the contract.

Executive Producer: You

You get an executive producer credit for investing. That’s pretty much all that title means.

If you’re a director, giving credits and titles is a great way to save budget while soliciting favors.

You can also give some input on the script (just don’t be a dick) or help out with other producer-related needs (like scouting locations, talent, etc.).

If it’s a very low budget, you probably want to help out where you can since it’s not like they’ll be hiring people to do all that. If you can use any connections you have, all the better.

That’s it. Have fun changing the world.

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