Equity Financing (Film)
Investment capital in exchange for ownership share and participation in film profits.
Definition
Equity financing in film involves investors providing capital in exchange for ownership percentage and profit participation. Unlike debt (which must be repaid), equity investors share in success or failure. They typically receive returns after debt is repaid and may participate in revenues across all windows.
Equity structures vary widely in recoupment waterfalls, preferred returns, and ownership terms.
Why It Matters
Equity financing enables productions without sufficient pre-sales or bankable elements. It provides flexible capital and shares risk with investors who believe in the project.
For investors, film equity offers potential high returns with significant risk—a speculative asset class.
Examples in Practice
A first-time director finances a $2M indie through equity investors who receive 50% ownership and first-dollar gross participation.
A hedge fund specializing in film equity invests across a slate of productions to diversify risk.
An individual investor commits $500K for producer credit and percentage of profits.