If they don’t go to opening night, then who should?

A friend of mine, and to protect the innocent, let’s call that friend . . . uh . . . me . . . was recently offered a chance to invest $50k into a Broadway musical.  A high unit price, but fairly typical for a higher priced musical.

While I wasn’t sure it was for me, I happened to have an investor that I thought might want the piece.  And I have no problem putting my people into other people’s shows.  What goes around comes around, and if my investors are happy that’s all that counts.

I asked some budgetary questions, as I do, and did the due diligence that I talk about in this seminar.

And just when I was about to recommend the investment to my guy, I was told that for the $50k, this investor would not be allowed to go to opening night.

Uhhh, come again?  You did say you wanted $50k, right?  Not $5k?

I know theaters have fixed capacities, and I know there are a lot of people that put on big musicals that deserve to be there to celebrate the big Broadway debut. But isn’t someone putting up fifty grand in a very risky proposition due the right to a couple of seats in a big theater?

I’ve planned opening night parties as a Producer.  I’ve been a GM and a CM on opening night parties.  And I know who gets to go to these things.  Everyone and their brother and their assistant who has ever even thought about working on the show.   (And the Company Manager usually always has a few emergencies in their pocket at the end as well!)

And all of them should go.

But the moment we start telling $50k investors that they can’t go?

That’s the moment we start losing investment dollars to other industries.

The perks are one of the few things that separate us from other investment opportunities.  When you buy 100 shares of Coca-Cola, they don’t give you a 6 pack of Coke, right?

But we can give you billing, insider access, and you betcha, opening night tickets.

Needless to say, my friend . . . and by my friend I mean moi . . . passed on this opportunity.

Why?  Because Broadway Investors are the reason why we get to do what we do.  They/we/you deserve to be celebrated for what they do, and therefore they deserve the respect of being invited to our celebrations.

 

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What a Vegas casino taught me about Broadway investing.

I was on the floor of The Venetian Hotel & Casino last week, staring at the sea of tourists gambling away at the slots and the tables and realized something . . . the house always wins.

And right now, all of you reading this blog, just collectively said, “Duh, Ken.  Duh.”

Because you all know this.  Everyone knows this.  Gambling favors the house.  That’s how opulent casinos like The Venetian are built.

The house always wins.

But . . . people play anyway.

The sea of people in Armani suits, cowboy hats and pencil skirts I saw last week at just one of the 122 casinos in town knew they were most likely going to lose.  They knew the odds were not in their favor.  They knew “the house always wins.”  Including me!  But it didn’t matter.  They didn’t care.  A few folks I spoke to don’t even think about winning money.  They gamble what they know they can lose and then walk away, chalking it up to entertainment.

They play the tough odds for two reasons:

  • The fun and “excitement” of gambling
  • The chance that they might actually make money

And play they do.  Over and over, again and again.

So, all of you who raise money for the theater (and for anything, for that matter), the lesson here is that if we can provide those two things to our Broadway investors, then we should be able to experience similar results.  Las Vegas proves that people have no problem engaging in an activity that may be “profitably challenged,” as long as the experience is rewarding.

It’s a Producer’s job, especially if you’re in this biz for the long term, to ask yourself, “What can you do to make sure your investors keep coming back to your casino?”

 

 

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5 Ways to Keep Your Investors Investing.

Believe it or not, one of the greatest complaints I hear from Broadway investors is not that they lost money.  It’s that they didn’t feel like they were a part of the process.  They felt used.

It’s not possible to involve your investors in every part of your business, and they shouldn’t even want you to, because frankly your time is best spent working on selling your show.  However, there are quite a few things you can do to make sure that they know they are more then just a walking/talking checkbook.

We pay a ton of attention to Investor Relations here in my office.  Why?  The few, proud people that are Broadway investors are the gasoline in the Broadway engine.  And treating them with the respect and admiration they deserve is the best way you can ensure you never have a shortage.

Here are five ways you can better your investor relations:

1.  Communication is the key.

Seems simple, but keeping your investors up to to date on the goings on with your show is essential, especially at the beginning of a run (and especially if your investors are out of town).  You don’t want your investors finding out any news about your show on Playbill.com.  And here’s the big tip:  tell them good news and the bad news.  If your show is struggling, be honest.  Investors are smart people and they know the risks of Broadway Investing.  They just want the truth.  And, to give you a reverse-Aaron Sorkin, “They can handle the truth.”  BONUS TIP:  Keep your communication going even when you don’t have a show you’re selling.

2.  Everyone likes free stuff.

T-Shirts, Cast Recordings, Opening Night Gifts, etc.  Small tangible things that remind people that they are on the “team” go a long way.  Broadway investors invest in shows because they love them.  So a physical reminder of that show, whether it’s a window card, or a notepad, are a great and simple way to give them a sense of ownership and pride in your project.

3.  Be available.

I’ve had a ton of investors tell me that they can’t get their Producer on the phone, or that he/she won’t respond to their emails.  WTF?  In my Broadway investing seminars I always recommend that you ask how available the Producer is before you invest, so you can manage your own expectations . . . but if you’re on the Producing side, and you’ve accepted money from an investor in a risky venture . . . then answer your f’in email and return an f’in phone call.  ‘Nuff said.

4.  Be a concierge

We offer our investors a host of other services including setting up ‘house seats’ for other shows, dinner and hotel recommendations and reservations . . . and I’ve even recommended (or not recommended) that my investors invest in other shows when they ask!  Treat your investors like your friends, and they’ll do the same.  Help them, and they’ll help you.  Relationships are built on reciprocity.

5.  Make them money.

Easier said then done, of course . . . and what I really mean is “take care” of their money.  Tell them your motives for each project.  Do you believe it can make money?  Is it an art project?  Have you worked that budget over to make sure its the leanest it can be without compromising the art?  Yes, people know that investing in Broadway is risky, but that doesn’t mean they want to just give their money away.  And making an investor money is a sure-fire way to get them to invest in something else, and recommend to their friends that they invest with you as well.  The odds of financial success on Broadway are about 1 in 5.  Show your investors why the odds are better with you.

 

It’s one of your many jobs to keep your investors happy.  However far you want to take that is up to you.  But I do believe that all of us have a responsibility to the strong and stalwart folks who support what we do.  Treat them well.

Our business depends on it.

 

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The #1 secret to raising money, marketing, and just about anything you want to do.

There’s no technology needed for this one.  No fancy social media.  No mega-buck marketing campaign.

Just you.

See, I’m working on a new revival.

Not the musical kind. And not the 16 week kind with a Hollywood star.

I’m trying to revive . . . good ol’ fashioned, face-to-face, networking.

I was on a panel recently, and was asked a whole slew of questions about how I did things, from raising money, to selling groups, to getting press, and so forth.  While I was going through a list of some of my “greatest hits”, I traced 90% of them back to a simple and honest personal relationship that started with a handshake.

They weren’t all relationships that stretched back to college, or summer stock. Some were based on quick meetings that lasted no longer than 15 minutes.  But they did involve two people being in the same space at the same time.

Want some specifics?

  • I met two of my largest investors at a performance of one of my shows.  They just looked like they were having fun, so we started talking.  And then they started investing.
  • I’ve sold tickets to Godspell by talking to people on the subway platform, at a blackjack table, and on an Amtrak train.
  • I convinced an actor to do a show of mine by flying across the country to have lunch.

Electronic communication is fantastic.  It allows you to reach more people, and allows you to reach them faster.

But the conversion rate of email, Twitter, Facebook, LinkedIn and every other e-tool out there is a lot lower than the conversion rate of a request after you’ve met someone in person.

Because a real handshake beats an e-handshake 9 times out of 10.

 

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Why you should spend more money on readings.

A consultation client of mine wrote me recently asking where she could find the cheapest rehearsal space around for a reading of her show.

Before I directed her to a list of available spaces, I asked her what the objective of the reading was.

“To find investors!”

“Ok, and who is going to be in it?” I asked.

“That’s the great part. I’ve got these friends of mine that have agreed to read it for me . . . and they’re all non-union so I can save money.”

“Ummm . . . and what was your objective again?”

“To find investors!”

Already there’s a contradiction.

Let’s use another start-up business as an example of what I’m getting at here.

If you were starting a catering company and were preparing a presentation of dishes for potential investors, would you do it in the cheapest dining room and use the cheapest ingredients?

No, you’d do your best to prepare the absolute best dishes possible, with the best china, in the best dining room . . .because you’d want potential investors to see the best you had to offer . . . not the cheapest.

I know developmental capital is hard to come by, believe you me, so presenting ‘first class’ readings can be problematic.  But you have to remember your objectives.

Now if you’re doing a reading for story for arc, dramaturgical issues,  etc., put it in the cheapest space possible, or doing it in your living room for all I care.  It’s important you do that work wherever you can.

But I often advise people to spend more on a investor readings/backers auditions, and add bells and whistles (including nice space, name actors, catering, etc.) to make the material seem even more attractive.

Because if you want to get money, sometimes you gotta spend money.

(Speaking of rehearsal space, we’re adding three new studios to my space in October – check out www.DavenportStudio.com for more info . . . and don’t forget, writers can get it for free.)

 

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