Private Equity backing serial Movie Directors

A recent article in The Economist called Hollywood’s new model (premium access required) is reporting the interesting trend that Hollywood film funding is taking more and more the private equity approach. Apparently some funds found an opportunity to change the investment process in Tinseltown and take their profits out of a risky business by applying some standard methods: bank on the directors with a track record (even slightly tainted), be ready to invest in unproven ones (if they are cheap). This notably differs from the old investment process: do not be seen with a looser, do not bank on the unbankable. But this clearly resembles the methods applied in high-tech: backing an entrepreneur with a mixed record is better than backing a rookie (if he is cheap), banking on a rookie is an alternative (if he is really cheap).

 Maybe Entrepreneurs will never enjoy the glamorous lives of movie directors marrying their gorgeous lead actress but they may take some comfort in thinking they do not have to invite the board to their wedding party.

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