When you discuss an investment strategy of small bets with many people considering employing this practice of putting a little into a lot in terms of film investment, the word “small” seems to confuse many. Small does not have to be insignificant. When investing in a passion project or something that you dream can make the world a better place, most serious investors don’t want to be one of a hundred and certainly not less than that. They want to be part of the team that makes it happen.
And if the film actually goes on to make significant returns, one hopes that you have enough skin in the game to share in the wealth generated.
How much is enough? Is there a level that if you can’t hit, it is not worth it? Ultimately that is a personal decision, but investing in a film is not like investing in a company. There won’t be 1000s participating. It won’t be taken public. I like to look for the type of people who want to put in a minimum of 10% of the available equity. They have to put in enough to care about both the film and the investment.
Like anything else thought that 10% can mean anything. You may chose to be part of the collective that puts up 10%, so that your share is even less. But still your group can have the pleasure of having played a meaningful role. That ultimately is the barrier you want your investors to hit: a meaningful role.
Having people involved feel they were important to the process will facilitate many things — particularly if the project is successful. If people feel they make a difference, the chances of them trying again are greatly increased. As a producer, it is your job to make sure that your investors have a positive story to tell about the experience. Having too many can diminish their return — not just when it comes to the financial side of it.
In these days of crowd funding, and the coming era of crowd equity, this is an important thing to consider. Grouping them and helping them have an identity, and thus a shared story to tell, allows them to have a significant stake.
Want some more to read on this subject (Towards A Sustainable Investor Class)?
Towards A Sustainable Investor Class For Film Culture And Business
Staged Financing MUST Become Film BIz’s Immediate Goal
Towards A Sustainable Investor Class: A Portfolio Approach
TASIC: Accessing Quality Projects
TASIC: Deliver Risk Appropriate Rewards
