While the average smaller investor in a big Broadway show is probably about $25,000, I have seen many shows where investors were able to get in for as little as $10,000, and even a few where the entry point was only $5,000! There are a lot of publicly traded mutual funds that don't allow you to get in at that level. These lower investment thresholds are very common in the Off-Broadway arena.
What determines the lowest investment level? Here's how it works. Capitalizations are divided into 'units', just like shares of a stock. What defines a unit is up to the Producer. Some Producers like to have a round 100 units per show, regardless of the capitalization. Some like to pick the lowest amount they can accept as an investment (some shows are limited to the # of investors they can have). Some just make it up arbitrarily.
Here's a tip. If you're considering a show and you get sticker shock when you hear the price of one unit? Ask for a partial. Splitting units ain't like splitting an atom.
Thursday, April 30, 2009
Wanna Be a Producer?
Ken Davenport tells us just how things break down behind the scenes, while dispelling some common myths: