Investing in Movies

I had a chance to invest in an upcoming film written by Wesley Strick called Love is the Drug, but I decided against it. After looking at his resume he I see he is hit and miss as a writer (Who isn’t right?). I was wondering if any of you other MOFOs have ever invested in a film and how it turned out. I was going to put $10,000 at risk, but I am going to do more research into the idea before I jump in, if I do. A lot of perks came along with the investment that almost swayed me, but I held back my excitement. Invitations to the filming, casting, and premier were among them. Perks aside I want to invest in the movie/entertainment industry and would like any advice you all can give. Thanks.

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“The gladdest moment in human life, methinks, is a departure into unknown lands.” – Sir Richard Burton

I have invested a few short films, Students of film have made, but this was never to make money, it was just to help them. Two friends of mine invested in an Australian movie years ago, they invested $20,000 and made a packet.

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Health is the greatest gift, contentment the greatest wealth, faithfulness the best relationship.
Buddha

Its always better to invest in a poor undiscovered talent from Scotland!!!
Let's see if I know any......

These things are always risky, and a high number of films over run their budget and don't ever finish.
Sometimes you have to take a risk, always look to see who the major investors are if possible or do a background check like you did with this guy.
When I get my new draft of my film noir triology together, I'll pester you non-stop.

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Hey Pepe, would you say I have a plethora of presents?


Toga, toga, toga......


Was it over when the Germans bombed Pearl Harbour?

If anyone's interested...

I'm in the process of creating a web-series called Ted Fleebermen: Better Business Bureau Agent, and money is an issue. If you'd like to make an investment or talk about such things, PM me.

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Everything I do, I do to make my second stepdad proud.

Could the rest of us have a look at these film noir scripts as well?

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"Like all dreamers, Steven mistook disenchantment for truth."

This is an area, I have begun to explore as a possible investment. However, my first experiences of it have not been enough to give me any confidence. I owned some shares in UK companies and by this I assume my information was sold on to others who then targetted me with junk mail. I received 4 invitations to invest in Independent Film companies, each one of them looked very glossy and likely to drag in most people. A little homework showed me all was not that rosey in the gardens of those companies and I thought better of it. Of the 4 movies I have so far been invited to invest in, I never heard of any of them actually being finished or indeed reaching a cinema, hence no profit. Take great care people. I am as interested as ever in investing in something which has the potential to turn over a profit but things look pretty bleak in this area and I would suggest you shouldn't ever risk what you can't afford to lose. Same as any form of gamble, however is it a gamble at all when there is no hope of a return?

The principals of the film-flam scam are the "producers" and "screenwriters." They take most of the money raised and then use a small amount to produce a low-quality film that is unlikely to turn a profit, let alone be released commercially. Take great care and if in doubt consult a lawyer.

The concept is pretty simple, assuming that the filmmakers know what they are doing:

The more money they get, the better the film turns out. It's all about convincing investors that your project is promising, and that their money will make it soar.

I'd invest...if I wasn't trying to fund my own stuff.

I invest and also seek investment depending whether I am EPing, Co-Producing, Directing etc. and I think as long as the money is not crucially needed in another area of your life you should go for it and live the dream.

Also it depends on the minimum investment sought. Currently there is a film I am EPing on and it has a minimum investment of $50... True Indy spirit! That kind of punk rock film making should be rewarded IMO which is why I am backing it with some of my own hard earned scratch.

Well- if the rest of these folk are done asking for money- perhaps i can throw my 2 cents in...(pun strongly intended)

7th-
His previous work is about all you have to go on, methinks. If you see any rate of improvement between each piece of his work, then you should be able to rely on the fact that his new work would be a little better. But the end point is, if you feel the least bit shaky about handing this guy 10 grand, then DONT. Thats a hell of a lot of $$ to loose.

On the other hand, if you want to give it a try, see what kind of control you would have. You could keep the $$ in your own account(s), disperse it only upon your approval. Watch the dailies, well, daily, and monitor progress. Demand satisfaction at every turn, or you and your precious green are Gone, (with or without the wind.) This way, its not necessarily a hit or miss operation. The only downside would be the time you would have to put in to the project.

Whatever deal you strike, follow the standards, get it all in writing and be one tough son of a bitch. Quite right. Get paid first, last and always.

HOWEVER-

if you are forcing THEM to value add then be sure you value add at your end. Work the long hours, be honest without being insulting and give frank opinions. If the script isn't 100% then it needs to be changed until it is.

Before spending eg 10k on a film spend 300 bucks on having a stranger or two read the script. Pick some readers who know nothing about the writer or you, and so won't be influenced to blow smoke up your ass - you want honesty because it's ultimately going to be your money flushed down the pan if the film is a stinker.

My quick thoughts on the matter anyways.

If you are considering investing in a movie you really need to be able to review and research those behind the project. They should be able to answer whatever questions you might have. Then, once you are satisfied in the legitimacy of the project you just need to decide if it is worth it to roll the dice. There are no sure things in this business but if it feels right to you AND you can afford to lose the money if things do go bad then GO FOR IT and HAVE FUN WITH IT.

I was recently offered a chance to invest in an Indie production. I like what these guys have done so far. THe movie will cost $40000. For a $10,000 investment I get 5 per cent of the movie. I am also guaranteed that the first $12,000 return goes to me.

I know nothing about this business. Is this a good offer?

Let me get this straight, the deal is that if this movie makes any money you’ll get an initial 20% return or your investment, the $12k payment, and then once that commitment is filled you will own 5% of the film or would you be guaranteed 5% of the film’s future earnings?

Either way this deal is pretty bad. Let’s say that I offered to split a $40k vacation condo with you, I’ll pick up 75% of the cost and you’ll pick up 25% of the cost. Every time we rent it out, you get all of the payments until you have been paid $12k. Well that’s awesome for you in the first few months because you keep getting checks, and you make 20% on your investment right away, that is if you exclude opportunity costs. But after you get your $12k, you only get 5% from anyone who rents the condo and I get the remaining 95%. So if I charge $100 a night to rent it out I get $95 and you get $5. It could be the most popular rental in the world and it wouldn’t change the fact that you are only getting $5 each time it’s rented, meanwhile I am making money hand over fist. But what’s really going to make you mad is if some rich guy sees the condo and decides that he has to have it, so he buys it for $1 million. So we sell it, I get $950k and you get $50k, not to bad right? Actually it’s terrible because you risked a fourth of what I did so you should be entitled to a fourth of any profits, $250k, but you’ll never get a perpetual 25% return on your investment with a deal structured like this.

Lots of small Indie film makers love trying to pull this gag, they want financing from outside sources while still retaining ownership control over a large chunk of the film, so if it turns out to be successful they make some good money while if nothing happens for the film they aren’t paying off debt for the next 10 years. But no one should fall for it, it’s not like you are investing in an established studio franchise where you know that you will receive some return on your investment, your investing in an Indie film that will most likely never make a single nickel so you should make sure that you are in a position to make good money if one of these movies ever hits.

Another think to consider before you invest any money is how will this film make any money? Where is it going to be shown, or is it going to be put on the festival circuit and then be sold. Does the director or producer have an agreement or existing relationship with a producers rep or packaging agency?

I am convinced that at least once a year 30 people get together and make a film that would be bigger than Clerks and My Big Fat Greek Wedding put together, but since they can’t get any players to see it, it just sits in a can and eventually turns into nothing.

So remember these two things: You should expect a percentage of ownership that is commensurate to the percentage of money you are investing in the films total cost. Figure out how any movie will recoup its costs and eventually make money, it can be the greatest movie in the world but if it’s sitting in cans in a basement it is worth less than the worst movie ever show in theaters.

Could a mod go ahead and delete this post for me? All it is now is a spam attraction. I tried to delete it but couldnt. Thanks.

Sorry I didn't see it before, 7th. I've deleted all the spam posts and will watch this thread more carefully in the future. There are lots of insights here so I'd hate to do away with it altogether.

Yoda, I also have an extra "Guess the movie Audio Game" thread in the game sections about 17 threads down. The one with no posts in it. Could you delete that as well for me. Thanks.

Done. Thanks for the heads-up.

As a film student I can't help but suggest you invest in a film. As a regular citizen I suggest you only invest money you could easily live without. Ask to look at the production packet. If they don't have one, move along. If they do, check the schedule and look into the biographies of who's involved. If there's professional people working on the project with at least a few projects that have made money, go for it. There should also be a budget in the packet. If it seems too good to be true, it is. It will run into trouble, as all films do, and the project wont be finished. Finally, almost most importantly, look to see what they're planning to do with it. Festivals? Distribution? All of your answers should be in the production packet.

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I have seen a "production packet" and I must say they are more confusing than my tax forms, should they not be clear and easy to understand? Otherwise, at least IMO, it looks as if someone is hiding something.

No, it shouldn't be confusing at all. It should be broken up into sections, usually with an index and headings, so that potential investors don't think they're looking at a tax form... If something looks suspicious, ask them about it. It's your money and they should be willing to do whatever takes to get it.