“So . . . who’s in it?”

This is the most common question I get whenever I’m raising money for a Broadway show . . .  whether I’m talking to a new Broadway Investor or a seasoned angel.

And it’s a good question.

But it’s not a great question.

When I’m evaluating a Broadway Investment opportunity, I have a very specific due diligence process that I go through to rate the risk of the production.  Because all opportunities carry risk . . . including walking down the street.  The real question is how risky is each opportunity . . . and what’s the upside?   (Is there a Pinkberry across that street???)

And the “Who” in this moneyball-like equation is a factor, for sure, but it’s not the most important one.

So when I get this question these days, I usually return the question with a question.

“Let me ask you,” I say, “Which of these Broadway shows would you rather have invested in:  Hamilton, Dear Evan Hansen, Come From Away, Rent, Les Miserables, Phantom of the Opera, A Chorus Line, etc . . . or . . . INSERT NAME OF STAR-DRIVEN VEHICLE HERE.”

Who’s in a show may give an investor some comfort when a show is launched, but since all shows carry risk, and since the upside on star vehicles can be so limited thanks to the shorter runs and the higher salaries, the savvy investors go drilling for the real oil, which isn’t located in Star Town.

The gushers aren’t dependent on stars.  In those cases, which are the ones we all want, the ones that send out double-digit distribution checks every month, the show is the only star.

So the next time you’re raising money, remind your prospect that having Madonna in your show may make it easier for them to write a check, but it will mean they won’t get many back.

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