Note: There is some fine print on what constitutes “adjusted gross proceeds.” Be sure to read it if you’re considering an investment.
People I don’t know – complete strangers, actually – are asking me to loan them money. This is not peer-to-peer lending or a GoFundMe project.
It’s legit and, frankly, quite exciting. These are successful movie directors and restaurant owners… theater companies and craft distilleries.
In return, they’re offering me a percentage of their revenue.
It reminds me of when I was financing various projects in Southeast Asia. On any given day, I’d get a dozen proposals… from gold mines to housing projects.
Once I moved back to the U.S. and began investing in privately owned shares, I thought I’d never see those days again.
These deals are called “revenue sharing” or “revenue participation.” You can find them on the internet, if you know where to look. (More on that in a minute.)
Basically, they come in two flavors.
Some are capped. When you get back your loan plus whatever amount was promised above that, the deal is done.
Some are uncapped. Your interest income keeps coming until revenues dry up.
Let me show you three deals going on right now to give you an idea of how they work…
Bunny Bravo. Instead of taking your kids or grandkids to see this animated film, you can invest in it. Bunny Bravo is produced by Mychal Simka and features well-known stars. The English version stars Cheri Oteri (former Saturday Night Live cast member), Jason Mewes (half of the Jay and Silent Bob duo) and Alexa PenaVega (from the Spy Kids series). The Spanish cast is equally star-studded.
By the way, Simka’s last English/Spanish pair of films made more than $9 million at the domestic box office.
The revenue-sharing terms? Simka promises to pay investors from 100% of “adjusted gross proceeds” until they make 125%. Thereafter, the revenue is split 50-50 (between investors and producers)… until it eventually peters out.
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