Independent Film Investing

INVESTING IN INDEPENDENT FILMS 101

First, you should be aware that as a whole, investing in Independent Films is RISKY. One rule of thumb as a film investor;
If you can't afford to lose the money, don't invest it.

WHY IS INVESTING IN INDEPENDENT FILMS RISKY?

One reason; Investors' limited knowledge of the film industry.
If you don't know very much about the industry, it puts you at a disadvantage.

Example:

I received a phone call from a an inexperienced new producer. They had a feature-length script, a director and funding. They wanted someone to put together a crew. She wanted to know if I could bid out the job. So, I started asking questions. What is the budget? $300,000. How many locations are there? I don't know. What has the director done? Well, he's started a short but didn't finish it. When do you want to start shooting this? In 3 weeks.

This may sound good to the untrained ear... they have the script, the money, and a director. But there are some big, red flags waving too. The director didn't finish the only project he'd worked on. The producer doesn't know how many locations there are (locations mean setup time, travel, drivers, set decoration, permits, etc.)... which makes me wonder if the budget was prepared well. And they want to start shooting in 3 weeks, without even an assistant director in place?

As a director, I hate to see this. This project is doomed before it ever begins. And this investor will take this bad experience, and probably never invest in another film. That's not to say that a well-organized project will succeed, but the chances are much greater that it will.

HOW DO YOU INVEST SAFELY IN AN INDEPENDENT FILM?

Honestly, you can't guarantee the success of any film, but there are things you can do to reduce the risk of backing a film that won't succeed. First, pick projects that have a fighting chance to succeed. Look closely at the script. It all starts there. If you don't like the script, you shouldn't stand behind it. If you like the script, then look at the director. What experience does he or she have? Can they tell a story, and inspire the cast and crew? If you like the director, then look at the producers and production crew. A good director and producer will surround themselves with a talented crew. Make sure that the key positions are filled by personnel that have worked on legitimate projects. Does their experience show up on www.imdb.com? If not, your risk level as in investor goes up. Lastly, how are they going to market the project? There must be a plan in place before they ever start shooting the film.

THE REWARDS OF INVESTING IN AN INDEPENDENT FILM?

Money. To entertain people. The message of the film. Being around Filmmakers and Actors. Artistic Value. If you choose a good project, the whole process can be a lot of fun for the investor. Some investors want to step back and wait for the end product, others want to be more involved and see the production unfold before their eyes. A film production is like a family. You are incredibly close for weeks to months straight, and the bonds can get very deep.

TAX DEDUCTIONS?
If you have "passive" income from the stock market, investing in an independent film is a good option. If the film fails to produce a profit, then you can deduct all of your investment in the film. On the other side, if the film succeeds, then you have made another wise investment and created more capital.

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