There are often negative connotations, judgement and stigma around independently financing a feature film and for good reason. Independent film is almost always a proposed loss endeavor. As an entertainment attorney who has advised hundreds of financiers and producers in financing independent films, I have had direct experience in how these deals come to fruition and a deep understanding of the motivation to independently finance a feature film. Year after year old and new investors flock to take their chance and put their money into what may just become the next big movie.
While there are all the reasons not to, here are some justified reasons to consider being a feature film investor (provided you are not maxing out your credit card or mortgaging your home):
If the investment is equivalent to an expensive hobby, then financing an independent film can include some noteworthy experiences and bragging rights. From being on set, to attending the premiere and if you are so lucky getting to attend a big-name festival like Sundance or Cannes are all great lifetime memories that may supersede the need of a sound return. In addition to the experience, you can get some credits to your name (generally investors are given executive producer credits) and that can lend itself to more credibility for future projects. It is great to rub shoulders with up-and-coming actors, directors and producers (or in some cases B-level talent who primarily operate in this indie cult space of filmmaking).
You Are Getting More Value Than The Dollar
This is where the risk may meet the reward. If the director is an actor or happens to have a major in with a piece of talent who is appearing on screen for far less than their normal quote, then you have an opportunity to sell the film at a much higher price. There are other cost savings like tax credits, kind contributions from post houses or other services and directors and writers getting paid far below their quote in exchange for back end. These cost reducing measures ensure more production value for the dollar, and if the film market perceives the value of the film to be far greater than the cost then you have an opportunity to be that unicorn where you can expect repayment from a film investment.
Instead Of Film School You Want To Pay To Learn
I find this to be ‘in retrospect’ the reason for the pain and suffering that sometimes accompanies independent financing. A financier who has made a lot of money doing something that they are really good at becomes convinced that they can ‘figure out’ and be much more successful at this whole independent filmmaking thing. And then it happens….someone gets Covid-19 the day before the shoot, the director is unhappy with the budget cut and shooting one less day, the actor is furious that they have a triple banger instead of a single wagon, the craft service forgets the actress is a full on vegan…and while the investor may be shielded from it all, more often than not they insert themselves or get the call for more money. The experience can be transformative and inspiring and leave the investor wanting for more–next time they will have more control or work with better crew, and so the life of a repeat independent film financier begins (until their trust fund cuts them off or they decide to become a debt fund).
Passion Outweighs All Rationale
If you are an environmental activist who believes in animal rights then you will likely invest in a documentary about that topic irrespective of the foreseeable risk factors. If your aspiring niece just graduated from USC film school and is best friends with a Disney starlet then why not support her with a friends and family investment. The passionate reason is very personal and one that cannot be easily deterred by sound financial models or a customary checklist of things to avoid. In this situation you just need to hire a good attorney to make sure that your reasons for investing are as protected as possible and then jump in hoping for the best.