Do you have questions
about investing?
The questions below provide general information to familiarize you with this type of investment.
Can anyone invest?
The IRS requires individuals or entities investing in commercial theatrical productions to meet certain financial requirements, known as an accredited investor. “One reason these offerings are limited to accredited investors is to ensure that all participating investors are financially sophisticated and able to fend for themselves or sustain the risk of loss, thus rendering unnecessary the protections that come from a registered offering.” A potential investor will need to sign a document confirming that they are considered an accredited investor, but the production will not require any financial documentation. To find out if you are an accredited investor please click here.
How much may I invest?
Each production determines its capitalization and how many units it will offer, thereby setting the minimum investment amount. The low is $25,000, but many shows have raised the minimum to $50,000 while also offering half units. In some cases, investors may collectively pool their investments to reach the minimum.
How risky is this investment?
Like any start-up, investing in a Broadway show is a high-risk investment and therefore, one should only invest if one can afford to lose the invested amount. As with any potential investment, one should review the documents offered by the producer, do your research, and most importantly, ask questions. It is the job of the producer or a representative of the production to make sure you are comfortable with the investment. This will positively add to your experience of being part of a Broadway show.
How do I get my money back?
If the box office brings in more than the weekly cost of running the show, a profit is made. 100% of all profits are returned to the investors until the show is fully recouped (the capitalization is paid back). Once that happens, the producers share in the profits (typically 50/50 split). Please note, each show determines when distributions to the investors will be made and the frequency may vary depending on the time of year and the needs of the show.
If you have any further questions, please contact us.