Tag Archives: movies

Would You Invest in a Movie?

photographed by Carol M. Highsmith

photographed by Carol M. Highsmith

Years ago when I had just finished college, a childhood friend of mine, who had studied film, told me about his dream of directing his own film and a possible storyline he was working on. Of course, he would need some to raise some money to produce this movie. I didn’t have much money at the time, but I promised to help financially support his life long dream and he offered a cameo role and my name in the credits. He also pointed out that if his film made a lot of money, I’d also get to reap the benefits of my investment.

My friend mentioned the independent film, The Blairwitch Project, which had a budget of about $22,500 and made $248 million. That is a return on investment of 4,344.4%! Basically, for every dollar the original producers put in, they made $43.4 bucks. Other low budget independent films that made amazing returns include Napoleon Dynamite ($400,000 budget, $46 million gross), Slumdog Millionaire ($30 million budget, $611 million gross), and My Big Fat Greek Wedding ($5 million budget, $368 million gross). My friend still works in the movie business, but he hasn’t yet gotten the chance to produce his own film. When I promised that I would invest money in his dream, I had no illusions that I’d strike it rich being a film investor, I was just supporting a friend. It was pretty cool to hear about the amazing returns of independent films that made it big though.

Recently, an associate producer reached out to me to tell me about an opportunity to invest in an upcoming Christmas movie she was working on. Obviously, she contacted me because I have this blog as a platform and she figured I could spread the word. She probably doesn’t know that this blog has a very very very small audience. Sorry! Nevertheless, I found the concept of investing in a film fascinating and decided to check it out.

Crowdfunding a Movie?

A few years ago, diehard fans of Veronica Mars raised $5.7 million dollars through a Kickstarter campaign to help get that movie made. In return, some received T-shirts and tickets to the red carpet premier. Donate $10,000, and you might get a speaking role in the movie! At the time, the platform was not allowed to have those fans share in the potential profits of the movie. They were donors, not investors. Non-accredited investors were not allowed to invest in startups and to be an accredited investor, a person must demonstrate an annual income of $200,000, or $300,000 for joint income, for the last two years with expectation of earning the same or higher income, or had a net worth of over a million dollars. Apparently, the government assumes that if you make that income or have that net worth, you must be a sophisticated investor. However, in May 2016, Title III of JOBS Act was enacted, allowing ordinary folks to invest in startups via crowdfunding.

The Christmas Movie

Okay, back to the Christmas movie which is looking to raise money for the film via equity crowdfunding. They claim that their movie is the first feature length narrative film to give the public an opportunity under the new rules to invest in it. Here’s a brief synopsis from the Start Engine crowdfunding site about the movie with the title “I’ll Be Next Door For Christmas”:

I’ll Be Next Door For Christmas is a warmhearted, upbeat comedy about a family that’s crazy for Christmas. Except for the 16-year-old daughter — her family’s over-the-top Christmas celebrations have made her life miserable. When her out-of-state boyfriend decides to visit for the holidays, she’s determined to spare him her family’s Christmas obsession, so she hires actors to play her parents and stages a fake Christmas dinner in the empty house next door. What could go wrong?

Will the movie be profitable?

I have absolutely no idea. I don’t know the first thing about the movie industry. The storyline sounds like it’ll be a fun movie, and maybe it’ll replace Elf as the go to comedy on Christmas day? The team that is working on the film isn’t filled with unknowns and amateurs, actually, they are pretty distinguished. David Willis, the director, was a writer for network TV shows like “Cybil” and “Caroline in the City,” and between the entire team, they have an Oscar and 4 Emmys. Christmas movies are an interesting niche and I guess if it catches on, it’s possible that it can continue to generate revenue every Christmas. Also, crowdfunding investors want to see it succeed and will probably help spread the word which might increase the popularity of the film

The Investment

With a minimum investment of $100, you’ll own a share of the revenue participation rights. According to the sharing agreement, investors will receive 100% of the company’s adjusted gross proceeds up to the repayment amount of 100% of their investment, and 50% of the adjusted gross proceeds thereafter.

Would you invest in a movie? What do you think about the story line of this Christmas Movie?

Disclosure: Since the minimum investment is $100, I will likely invest in the film. I am not saying it’s a good investment, but it would be cool to say that I invested in the making of this movie. This is a pretty risky investment and I don’t plan on earning a large return, and I’m fine with losing my initial investment. It would also be fun to see how the investment goes and I can keep everyone updated after the movie comes out (if it actually does come out).

Disclaimer: Nothing in this post should be construed as investment advice. You should always do your due diligence when making an investment, as all investments come with risks. This post is only for informational and entertainment purposes