Like most working independent film producers, I’ve pitched my projects to more potential financiers than I can remember.  I’m always relieved when they’re seasoned film investors because then I can focus on the creative aspects of the project, the production and distribution plan, and the recoupment structure.  When I pitch to someone who hasn’t invested in film before, most of my time is spent explaining how film investment works, the typical life cycle of a film, and the current industry landscape (often with historical context!).

I genuinely love educating people about “how film works.” It’s great to shatter the US Weekly version of the film world, and show people that it’s a serious manufacturing industry comprised of hardworking creative and technical professionals.  But honestly, how many more times am I going to have to explain this on an individual basis?  A girl’s gotta sleep (oh, and actually make movies too).  I’m guessing that for every 200 of these newbie film investors I pitch (and educate), 199 of them say “no.”  And pitching to them is so much more extensive and drawn out than pitching to an experienced film investor.  This doesn’t seem like a very efficient use of my time, right?  It isn’t.  I should be reading and developing scripts, making and executing production and distribution plans, figuring out how to innovate in a rapidly changing landscape.

A few weeks ago at the Creative Capital artist retreat, I was chatting with Philipp Engelhorn of Cinereach about the state of film financing and distribution.  He wondered why there were labs and training programs for screenwriters, directors, and now even producers, but no such programs for investors.  Indeed, why aren’t there any?  There are investor training courses in stocks, real estate, tech, and other industries. Why not in film?  Especially now that film budgets have plummeted, subsequently lowering an investor’s barrier to entry.  Not only would investor “labs” make producers’ lives easier, but they could potentially groom new classes of intelligent investors specifically for the film industry–more “smart money,” less “dumb money”!

An educated investor is primed to be a repeat investor.  I’ve met too many investors who never want to be involved in another film again because they were burned by their first one.  Their expectations were not properly managed, the risks not explained, the production was a nightmare, the distribution plan was stupid, the filmmakers neglected the film after its premiere, and so on.  If someone had explained to these investors how to identify good directors and projects, assess deals, spot red flags, mitigate risk in a very risky type of investment, and effectively work with producers, perhaps they wouldn’t have made a doomed investment, and perhaps they would’ve invested again.

It’s understandable why producers are reluctant to lay out all the risks themselves. They want to paint a rosy picture of a film’s prospects because they want it to get financed.  But they’re doing themselves, the financiers, and the film industry at large a disservice by promising things that they’re not certain they can deliver.  This is where neutral third-party investor labs would come in handy.

These labs could help make investors proactive instead of reactive (how great would it be if more of them sought us out instead of the other way around?), and weed out the ones who want to be in it just for the money.  Did I mention that film is a very risky investment?  Well, it bears repeating.  Film investments are alternative assets like real estate, rare coins, artwork, or investment-grade wine that diversify an investor’s portfolio.  It’s rare for a film to hit it big, but when it does, it can hit it really big.  Ultimately, however, the best kind of film investor is someone who is not merely interested in financial return, but also in psychic return—that is, the unquantifiable joy of being part of an artistic endeavor, of learning about filmmaking and the film industry from the inside, of supporting a social issue or cause addressed by a film, of going to celebrity premieres and parties, of establishing relationships with promising filmmakers, and of helping to make something that will hopefully be seen by many and talked about for years to come.

So, who wants to start the first lab for film investors?