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okay welcome everyone this is brendan from rocket dollar i'm happy that you're going to get to join this fireside chat today uh we are partners with regiment and what we've tried to do here in this webinar series um we're just trying to educate a lot of different alternative investment ideas um and a discern different asset classes a lot of people come into a rocket dollar account they may have one asset they know really well and they're not really familiar with a lot of others sometimes they love the idea of alternative retirement accounts they absolutely love taking control of their dollars investing in different types of projects and funds however they're not really aware it could just be a bit overwhelming to digest how many options there are the irs gives us a really wide list almost everything so these webinars intended hey let's really educate them different asset classes um both that can be interesting thought-provoking and also uh make money for your retirement account to build your retirement account on um so today we have a regiment an investment bank out of chicago and then regiment echo which we have with great experience in the entertainment industry um so mike you want to just introduce yourself and then i'll tell the fun south by southwest store that i got here yeah absolutely mike kavanagh with regiment uh really excited about today's fireside chat with the regiment echo crew um on the entertainment venture capital fund so we'll dive into some bios we'll start with but brendan's got a a nice uh story to tell before we jump into sharing the biographies of our of our panelists yeah so so back when i was working in chicago i was talking with roger and he said hey you know we're just sitting at the trade desk and runners like hey you know i i i'm in some entertainment business stuff as well have a movie debut so i got to see one of his movies in chicago which is really fun uh but then down here in austin as you obviously might know south by southwest that is one of the biggest just absolutely ginormous uh entertainment events in the united states it sadly got canceled last year given the circumstances but um comedians movies musicians everyone's just coming to kind of showcase their wares and say hey this is a really cool project i've got going on um so i just say so roger hit him up he said hey got a movie uh debuting at south by southwest um i got to get a special ticket for it i got to show up and cut the line from um 40 50 people all desperate to get into the showing uh for a movie called saint francis that it was ended up being a great story about chicago so uh roger and andy and kenny i'd love for you to introduce yourselves so just tell us a little bit about what saint francis is and kind of some of the experience that you guys have in different parts of the industry so uh i guess i'll start off uh my name is roger well sorry you can't see my mouth moving but um yeah i'm gonna i'm a film producer uh you're based here in chicago um i basically uh i started off in the the futures business i've been in a financial you know 25 years plus in the financial industry here in chicago with focus on futures trading in the global derivatives markets managing client assets in the alternative investment space um and i had an interest in entertainment as an actor i really enjoy acting something i've always had something on the side that i've enjoyed and then basically in doing that met a lot of young talented creatives in chicago that you know needed help uh making their ideas come to fruition so i started producing uh about a handful of years ago um basically uh saint francis um was uh you know uh we we won the coveted uh audience choice awards when uh brandon mentioned the fact that there was a line to get in well i didn't even know what in competition meant at south by southwest well that meant that you were one of 10 films that were voted on for the audience choice award um and we ended up winning that for best feature film so it was a wonderful experience um from that point on you know it's always it's very very political uh with the film festivals and whatnot but basically through that met a ton of more you know a ton of new distribution contacts therefore um you know my ultimate goal was to eventually combine my two passions and that's what uh regimen echo is doing awesome thank you roger andy love to hear from you and kenny yeah uh i grew up i guess in media i've been been in media since i was about 14. um working and started in live broadcast sports broadcasting and graduated onto you know producing for film and and tv gosh maybe 10 15 years ago moved to chicago partially for the tax credits also for family and the tax credits presented a really nice business case for for film and investment and since that time i think the chicago or illinois illinois-based production has gone about five-fold six-fold um upwards of close to 700 million i think they were projecting for 2020 before the pandemic happened and they're projecting that to happen in 2021 uh i met roger probably my second or third uh day here honestly um and we've always tried to um figure out a way to work together um formulated a couple different ideas that we we didn't execute on and then saint francis came by and uh i read the script and honestly it challenged me as a father and it challenged me as a kind of a i guess uh hard-headed male and looking at things and having a more sensible approach to things my daughter and my my wife uh deal with day in and day out which is just a normal part of being a woman and i jumped in and i said let's go i'm really glad i did it's been just a great critical success and i'm really happy for the team even today it actually got listed in variety in indy wire one of 40 some projects with a likelihood of being nominated for an academy i think that's a long shot but just being in the conversation is uh is just amazing for the creative team behind it um i too have produced and been involved in finance and distribution for the better part of a decade and uh was looking for a vehicle to put that experience into a more viable uh repeatable process and having met roger and and then by way of roger uh mike kavanagh um you know came up with the the regiment echo model and then uh introduced to kenny who's kind of the anchor um from a security standpoint and giving us the backbone of the fun which allows us to uh you know kind of happen yeah and the purpose of the funds is to make some type of return and i think that's something when this conversation is first brought up people just kind of miss a little bit you know oh this is just creatives you know this is not to make money or whatever but kenny love to hear about your experience and what you're what you're bringing to the fun yeah sure um so defuse um founder ceo defuse and what we do is we incubate and operate funds so think of us as a fun platform we come in very early with would-be fun gps and we help them refine their thesis basically think through what what they can do to de-risk it from a fiscal control corporate governance thinking through the modeling check sizes diligencing underwriting all of the nuts and bolts of actually running a fund and i'll did briefly my background um i started actually at 18 at a high frequency trading firm called getco i was maybe their 15th employee um and 10 years later i left a 1500 person public company so definitely interesting experience but while i was doing that on the side i started spinning up a bunch of fun vehicles did a handful of real estate funds moved over to venture capital so at this point i think i've started from scratch about seven different fund vehicles so diffuse is an extension of that basically um i made every mistake under the sun and i'm trying to to help people bring a little bit more efficiency so specialize in what they're good at and not what they're not good at or more importantly what it's not worth their time to learn and also try to take some of those mistakes i made and help them avoid repeating them awesome thank you kenny and and part of this regiment theme as we go through different asset classes has just been you know with alternatives you're more closer to your fund managers than a stock under mutual funds you're miles away from it so this is an alternate investment so you get to know your managers more and you also have to like check on their experience and that's when the experience that kenny's bringing so many different asset classes um mike i'd love if you'd kick off some of our first questions here yeah i mean and thank you for the introductions guys you know brendan's talking about asset classes and you know venture capital obviously is acknowledged as a as a asset class and regiment echo is a venture capital fund but andy roger maybe you could touch on um the entertainment space within the venture world as an asset class um yeah um how is it an asset class well i think just looking at content alone as an asset class and something that's worthy of uh you know inclusion and a diversified portfolio is something that we really hammer home um and having that you know in a slate format which is the fund you know allows you to look at it you know you mentioned venture looking at it as you know okay 20 30 40 projects and spreading out that risk giving yourself that many swings at the bat um you know just a it gives you a much higher chance for success you know there's certain things you can put in place to at least you know provide yourself with the floor of that that um you know that that allocation but um you know looking at it just as you would any other alternative investment um it kind of takes away the smoke and mirrors that is often you know thought about or um you know equated to film investment and you always if you talk to somebody who's done it once you can see kind of a wrinkle in the round like i did it it was you know i didn't bad communication and we lost all our money and and i can almost guarantee if you talk to an investor and they they've done one movie it was either wonderful or bad there's no in between and there's a myriad of reasons why that that happens but um i can also guarantee you if you're looking at it as in in a fun perspective and spreading that over a slate you're gonna have a much better experience you're gonna have a much better return profile and be able to um you know look at it more of a traditional investment rather than hey you know finding a director who has a as a vision and you know going to swing to get into sundance or south by because that's certainly not the uh the best approach financial perspective yeah it sounds similar to you know angel investors that have only made one investment in a startup they you know they either hit it big and continue to invest or they have a have a loser so to speak and then stop and you know curse that investing as an angel in startups roger do you have anything to add as you know entertainment expands and you know how is it its own asset class well just just just would like to add the fact that since i've been in uh the futures trading space uh for for 26 years you know that's kind of this a very similar approach that that our model has where you know you have to manage your risk you have to have your stops in right same thing with with with our projects you know we want to make sure that we've got backstops in to kind of protect the investor um that's how i'd say the diversification just in general my my investors in the films that i've produced thus far have actually come from this space um maybe it was because they had a bigger risk appetite but more importantly it was that you know they trusted you know that that we were managing a situation very similar to that as i did their money in the alternative investment space so it actually is very very very similar in that way yeah um no it's interesting and you know i'm myself new to um the entertainment space and i know kenny is too he might have some experience but kenny's not a producer like you and and andy are um kenny maybe you could you know with your risk management background you know coming from an hft trading background and venture capital and how asset management is always about assessing and mitigating and managing risk maybe you could give a little insight as to um you know from the diffuse persona of managing the fund what was the appeal what's the what opportunities do you see in the entertainment asset space yeah absolutely well entertainment overall is just interesting right you have the returns driven reasons for investing and then you have the impact right for lack of a better term where it's like i just like to get engaged with cool projects and the reality is this is a asset class that has both right if you do it right you get to have really good returns but then also it's just fun to be able to i don't know hop on netflix and you can go see something that you helped create and it's like that non-tangible relatively tangible um that value-add it is nothing to sniff that um but also historically this asset class does do very well but what you do need is the right team and that was what excited us most with diffuse the way the way that we run our process is um we like to we say globally all the time we really want to engage in a fund where there's about 30 people on the planet they could execute that particular fund strategy and we felt that we found that in roger and aj in in what they do um so that's exciting and then the other things that that uh roger and aj touched on which i think are key diversification right any any good investment you need to diversify um you need to go out you need to have a clear process for investing right how are you underwriting how are you going to quantify your investment decisions right like how who who are the service providers because that makes a big difference as far as whether the fund feels institutional grade whether it's doing all the things right and in this case with their particular strategy we were able to get to a clear decision-making um quantifiable process with clear underwriting standards things like that which a lot of folks did in i you know this is our first foray into entertainment finance but a lot of the folks we we have spoke to subsequently they don't really have a process right it's more of uh i'm going to invest in what i like and that is the beginning and ending of what they do or what they know and that's really not a super effective way to create an investment strategy and that was just very nice the the the roger really didn't take the time to work with us to really think that through and create that process yeah it's fun to watch this team come together with regiment echo because you have that fun and glitziness of the entertainment industry uh but it's you know being partnered with the discipline and risk management of the financial world and it's still a ton of fun um like going to a premiere and being able to scoot in front of the line because you you know the producer kind of fun um so we've mentioned diversification and maybe i mean we all know how that looks in a stock portfolio you know but buy this many stocks in this sector offset that with some bonds get some mulch like we know how to diversify in a traditional investment fund how does diversification and this is to the group whoever wants to take a stab at it what does diversification look like in a venture capital fund for entertainment um so the standard argument for vc funds and it applies here as well is uh the distributions are not um normal right in the sense they're not they're not gaussian right so it's not that that hands the standard just like that that everybody is used to um the term that it's not actually accurate but it's close enough it's more like a power law distribution and that that distribution of outcomes is actually pretty consistent between entertainment funds and vc funds where you have a very small number that account for you know 90 95 of the returns and a lot of them are dogs so your ability to screen out the ones that are clearly going to underperform goes a long way towards skewing you in the right direction but then if we do buy that this is a power lot distribution um you need to have a sufficient sample size to use the super super we'll keep going with the technical jargon here you need to have a sufficiently large sample size to actually capture that and the larger the sample size and the power law the more likely you are to have that really high outcome so realistically if you're coming in you're going to pick one two three four yeah the odds like everybody's been saying the odds you're gonna get out of the park are pretty small um you're really only start to see the diversification when you're in that 2025 range where it starts to become meaningful yeah absolutely it's a numbers game and there's a lot in between there too and that's where um having that many um projects on your slate that you're that you're allocating and dividing that risk upon there are many things that go even after you've underwritten and said this is great there's the execution process which also has you know other areas that you need to control and and protect against because you know you can have the best laid plans and everything on paper looks like an a-list grand slam and then the market may shift by the time you bring it to market and instead of you know what you think was your lightning in the bottle you know film that's going to give you your 10x you know really doesn't but as long as it you have different protections in there that you know the dogs so to speak um aren't complete losses and you have protections whether it's a cost plus or something else those dogs don't wipe you out um they don't give you the grand slam but um you know and then you have the other ones that you think may just be average and but again in that execution phase which is food production you do catch lightning in a bottle and because you have these 20 different you know projects 25 you have the opportunity to keep swinging until you do catch it and then one of them they'll just take off i mean the numbers you in the statistics speak for themselves on that that range just like you said that's really interesting i'm going to drill down on that a little bit more but first we've got a question from the audience um i'm going to slip in here um because it's a good question um and the questions from bill it says what type of diligence is done that is specific all caps specific to a media content venture capital fund that might be different from another more typical fund asset class we'll throw that one out to the group i had a feeling kenny might lean in no i'm going to punt it with a little nudge to aj and roger one of the things uh you might want to talk about on that is like a genre film versus a comedy film and how it like dissimilar with like the total addressable market in vc funds yeah uh i guess i would equate that to fear is an international language that travels so you know a horror film has more international appeal than comedy um what's funny in the us may not be funny um in spain um it and so you have a a universal theme um gives you a more commercially viable project and how you do the due diligence into that is to speaking with your what i'll call monetization partners which are your distribution um and you know what regimen echo is doing is aligning themselves with uh multiple distribution partners and they're the boots on the ground selling the projects for you and knowing what they see and what their data is on what's selling helps you to kind of reverse engineer what you're going to produce and helping fill those content mandates helping fill voids in the marketplace um that's i think something that's very specific to the entertainment industry that you know besides you know making sure you know the team is uh you know vetted and you have you know a story that can you know be a very commercial viable property um aligning you know what the market is kind of looking for is very very important as well as uh i'd say aligning with the talent uh that has the value in the current marketplace uh that's another very important thing that that we know in advance that they've got the numbers on what what certain talent might equate with a distribution agreement uh what they're willing to bet on uh with this project because of this talent and so on and so forth that we've gotten attached to the project another big thing yeah very good point because that that can provide further underwriting um you know have a talent that's worth you know throw a number out there that's worth you know i don't know half a million um and you were you're a little leery of wanting to have to pay that person 250 000 for a couple days on set but you do the math and you know they're worth double their their cost you're like okay come on in for that cameo um yeah so there's a different you know things that you you definitely want to look in from a casting standpoint so very good point and i'd add two terms that's that that was considered above the line costs so when we dissect a budget another thing we look at is obviously below the line cost the the the and and being a certain part of every project where we are going to know when and how the money is spent and if it makes sense um so we'll dissect the underlying budget with you know uh making sure that the costs as far as locations um you know uh various underlying things crew you know uh and so on and so forth if they align well with the project um so so just in general making sure the money's being spent the way it should be as well on a day-to-day basis during the production great we had a question from the audience asking how they might be able to put some projects in front of the fund i told andres that andy roger that you would just type your email addresses in the chat at some point um during during the fireside chat here if you guys could whenever you get a chance just type in your your email addresses um for anyone that would want to contact you after this event um you know this is very similar to like a a tech startup like venture capital fund is you're you're taking your your experience in the industry and you're basically watching over the production from what i you know hear you guys saying and leveraging your distribution contacts to help that film have as much sex or success film or tv show or project um have as much success as possible by leveraging that networking experience um roger you you've been a producer and actor maybe you could talk about how relationships help you move projects forward like when you're making the investment like what types of relationships are key and fundamental to an investment from from the fund i i can tell you that right off the bat ice always my the first project that uh i acted in that anyone would know of would be public enemies with michael mann and on the set of that project i developed a lot of relationships with a lot of people that i still to this day lean on um i would say in the very first thing for me as a when i started producing um and it's still to this day as these actors have you know further developed and and expanded their careers i lean on them for uh to get in front of big name talent um i was lucky that my very first film i made for thirty thousand dollars just you know just like just like trading you you only learn how to make films by doing it by making it uh and uh i was able to get you know it was a dialogue driven film called not welcome which brendan was at as well um and i was able to get really good talent um both locally and to fly in stay with me in my house this same talent today um is able to put us in touch with um francis mcdormand uh actually you know like if you if you didn't know that this was happening you getting getting a script to talent like that is never you know even when they say their agent says they read it they've never read it right having contacts like that in in on that side of the the industry has been very helpful for me moving forward and um and continues to be um that that as well as casting agents in in chicago um saint francis the little girl in saint francis i acted in multiple commercials and things with with with children and very often you know your actors when you're producing something will will act up or down just like golfers do right play up or down to the talent right and this little girl um i was very involved in casting her um just nailed it and um ended up being a very one of the keys i think um with the film uh moving forward was that just that she she was so good so ahead of her time um that uh uh dealing with casting what i was getting at i'm sorry was dealing with casting agents locally like that was the one role that i wasn't sure of i didn't have friends that were were kids or had kids right that was so important and crucial to the success of this project so i was able to lean on and pay little very little to a local talent agent here that i really trust pascal rudnick uh casting and um they found her for us so um that's a good place to start andy if you want to take over from there yeah i just in all business and certainly in the financial one um is very much similar to entertainment the relationships are everything i i mean i have some mentors that was lucky enough to grow up next to that were instrumental in creating that uss satellite system for broadcast tv and i've leaned on them forever um and i you know i continue to plug away at the mentors that have been there since i was 15 and you know like like kenny said you know i've made every mistake there is to make uh i've learned from it you know i and you know even even as we roll up you know the the fund here you know how does this make sense how does this look you know the relationships with the distribution is probably for me one of the biggest things because when you look at films you know what 9 000 or so are produced each year only oh gosh what is it six percent of them receive meaningful distribution and without distribution you have no chance of recouping or even coming close to an roi so those relationships that you know you know we collectively have garnered over our you know you look the whole gp um the almost 30 years of experience is you know priceless for us and those relationships that you build and the trust that you have you can ask the question hey what is this worth in the marketplace where do you see this and they may say you know it's it's not very good you know i know you love it but the market disagrees with you okay then you pivot and you got to make sure you're not too um you know too in love with the project because it just may not find a place in the market and and that's where you have to be kind of grounded to the fundamentals and the thesis that that uh you know kenny talked about earlier yeah um you know you mentioned one thing there with you know learning from our mistakes you know that seems to be the um overarching theme in anything related to finance uh in business um you know you make small mistakes don't repeat them learn and then you know go bigger once you've learned but you also mentioned pivots um you know one interesting thing to me and just being behind the scenes and and learning more about the entertainment industry through my involvement with regimen echo just being kind of the the fly on the wall so to speak um maybe in andy roger kenny whoever wants to take this one um tell me like the pivots that you've seen or like the disruption that's occurred since last year when the coveted lockdown was announced um if any i'm assuming every industry was probably touching there's no difference in entertainment but how much of a pivot was there how much disruption from the covet lockdown was there um got it well obviously the biggest pivot was more streaming and less screenings right um i think that uh you know netflix added like 16 million new subscribers on the first three months of 2020. um that was you know and i was going through actually at the time the uh release of saint francis so i was in new york in february then out in march and we were getting great reviews looking forward to a great theatrical you know release wide release and then all of a sudden after la luckily you know the big the big uh um what do i talk reviewers and whatever had he already seen it or seen it in new york in l.a so we got some great press but then it ended we did not get our chicago premiere which was two weeks uh into march um so you know despite the fact that that we thought that was going to be a huge hit to saint francis um we we had agreements with independent uh theaters across the country where we agreed to hey if we would allow them to stream um the movie at certain times just like it would in the theater and we would share in the revenue so the so these theaters would also uh share in the revenue um and uh that would probably i'd say you know the biggest thing is how distribution is changing and and has changed since covid um and who knows when you know that's going to how how much theatrical releases and viewings are going to change things going forward but the that that would be a number one um to premiere or not to premiere would be another big thing um where like a lot of the big studios you know pushed off premieres wonder woman 1984 so on and so forth um to release at a later date to release at a later date um and in a lot of things like mulan disney plus just just put it out on on disney plus but i'd say the third thing that would be the second i'd say the third thing to me would be the pricey production delays uh now i think we had a lot of people that that tried to be the first one out and why to make a to make a film since covet because there's a huge disparity now in in creative content all these places like netflix and and amazon and all these streamers they're looking for original content so everybody knows that you know if you can be the first one to complete a a film without issue um you're going to be able to be in the marketplace first so that's there's a big race now and a lot of people have made mistakes i know a lot of every film that i know that's tried to start production in november had had setbacks or pricey production delays um and so on so i say that to me those are the three biggest ways that cobit has affected it andy yeah i'd agree i mean just putting a book into that the price differential and cost differential production it's probably about a 30 premium uh you need to add on your your project right now um to account for all the protocols and ppe and testing uh because your your talent and your zone a's that they're calling it is you're actually testing every three days so there's a huge cost that's add on it um as regards to the distribution the commercialization of the project you know i don't think of it so much as a pivot um but it was steroids and it it it sped that that up i mean we were going there and the theatrical window was shrinking um but covet just you know shot it and gave it the biggest shot of steroids you ever seen because now you when you have the announcement by time warner um and through their hbo max vehicle that they were going to put everything in 2021 through that release and test some theatrical that was earth shattered and you know amc you could see it in the stock market the reflection of how amc and the other theater chains got hit you know alamo house just uh filed for bankruptcy i believe yesterday uh alamo drafthouse um so the theater chains obviously got killed um and i think i'm kind of bullish of what they'll be say in a year and a half um i think they'll be a great event type atmosphere for film screening still but it's never going to be the same i don't think it's going to pivot back to where it was before the windows are going to be completely changed you're going to see all of these direct-to-consumer platforms which you see now um release similarly um and simultaneously with their theatrical release and that's just going to be how it's going to be going moving forward you're not going to see this six month theatrical exclusive um save but a few yeah alamo just shut down their first ever location i believe they just put that out but they also put out their message they're still around but they got to go through a lot of financing trouble to get themselves back on their feet yeah and i think places like alamo um i think have a fighting chance i just think they just did not have a runway i mean amc took 900 mil ion in to to survive but because of those type they have a niche and they also try to you know niche their niche so to speak um but they create an event atmosphere so that is to me is how a theater survive is you have to have this event and some of the temple projects that come out through the studio and they're going to have 4 000 screens they create that event yes they do i mean whenever you know the fanboys of star wars or what have you that come out are marvels they're gonna get that but for the other projects the indies and the ones kind of in the middle i think your ability to hit that event threshold is going to be higher and it's going to be harder to do yeah and just a quick thing for our audience to help visualize this you know when someone enters a real estate investment or they invest you know a stock or something they always consider a beginning a middle and the end i'd love if you just for maybe a tv streaming project like kenny just threw in juan division into the chat they've been producing during covid i think he was hinting there uh a new tv series or movie what's the beginning and middle event of finally getting to a distribution network like netflix what are those stages of financing production and finishing an investment so for an episodic you know and episodics a little different um because the distribution pathways are different and and i always equate it to think of you know retail there's shelf space so on episodic there's still shelf space that you're dealing with you still have to get permission to be um you know to distribute your your film unless you self-distribute online or through you know amazon um and not amazon prime or amazon studios but just amazon um it's a little more of a venture play you have to create and we'll i'll try to stay in uh venture vernacular you have to create an mvp you have to have something that you're going to market with that you can show hey this is it and then in film that's either a pilot or what's called a sizzle which you know will give the producer your pitching or the station the network or platform you're pitching an idea of what that project is along with a series bible and also that series bible has to spell out that you have enough content to get to season three so like you know hbo let's say they're giving you 10 million per season they're not making any money on season one they may start making you know money back towards season two it's season three where they make their money and so they're not going to dive into a project they did they don't think that's going to get there if you're lucky enough and i was very close to this on one project you'll you'll pitch it and they'll pivot on you and say hey how about you do this for let's test it as a feature so i i pitched a project to a large platform and they said well hey you know that's great but that's a 20 million dollar season how about we give you three million dollars to do the feature and then they'll test it and their algorithm will say whether or not it's going to be a profitable venture for them to do it um in long form um so that's one scenario they look at uh it is a long process though for episodic typically um you have to have like i said you have to have your product in place to pitch them um unless you're already within that agency um and studio environment in which they're taking the project out from but from a pure indie perspective it's uh it's very troublesome um and there's some theories i have in roger and i've talked about this that you you can protect against that in in terms of when you create your pilot you actually create a feature and then you cut the pilot out of that feature and then you go shop it and if you make a sale wonderful you're happy but if you don't you also have this feature length project that you know you can put out the out to market and give your investors a chance of recoupment and then it becomes a success and you go back to the same people that pass it and say hey you remember that project you passed on we just you know did it you know 20 million dollar you know box office you want it now and they'll probably pay more for it right there's that that's the advantage of so like with netflix for example um they were giving out uh very large mgs for the same reason i mentioned before that they were looking for content and mg is a minimum guarantee right where it's it wasn't a netflix original what it's called where they actually have a hand in producing the film and will invest in the film to a certain point but they'll they'll they see this they see the work that's done or if in advance they see the talent or maybe help get certain talent like their netflix darlings attached to it and then they will say they'll give you a minimum guarantee you got a 10 million dollar film of 8 million or something to help you complete the financing well that's that's a little easier to do uh with episodics why because the risk for making you know one you know what one series is is not as great as a feature film um but at the same time it's it is just as difficult to get somebody to uh attach to it it's just not uh you know there's there's very similar things across the board that affect both um but in this case you know your your nut is a lot smaller uh with the episodic uh serial content as we call it awesome thank you guys yeah good stuff you know one thing you know kind of a similar question um or the context is similar that you know there's different asset classes there's real estate there's traditional like the stock market bond market like investors always have a choice you know if they have money that they're looking to invest in an asset class you know there's the perspective uh capital efficiency of you know if i put it in the in the bond market i kind of know what i'm going to get i know where my volatility is how do you kind of categorize the entertainment space as far as um you know expected returns is this swing or miss and hit a home run is it steady can it be consistent like what are you guys kind of aiming for um and and how do you attract money into this asset class versus you know more traditional alternatives like real estate i guess i get i'll hit on you know kind of the aiming and then you know hand over to kenny and roger as it relates to the asset class uh recruitment with the investments but um you know what we aim for is gosh i honestly the way you set it up is you want your failures to be at a break even or above uh and that's really you know what we're shooting for is that yes every time you're at the plate you know with every project it's really hard to make a movie let alone finance it um but it is really hard it's a long process so if you're not swinging for the fences and swinging for that 10x i don't know why you're doing it um but you're doing it with a floor and you're doing it with some risk mitigation that's in place so that if you miss and again there's a huge step from script to you know dollar one in the bank there's a lot of things in the middle and a lot of things can go wrong even if you have the best laid plans so putting in those risk mitigations so that you know you're swinging a miss is a break even that's a really great place to be now i'm not saying every single one's gonna to be that way but you know when you do that as kind of your your blueprint um those that do outperform within that you know 25 project slate you're really excited about those that underperform a little bit and may lose a little money they don't kill you because you do have those floors and those protections under there um and some sort of guaranteed distribution yeah and absolutely 100 the guaranteed distribution that we have with the projects and alignment with the fund is you know a hundred percent while we can go to market and say to investors that you know we can put in a floor uh that along with tax credits um you know put into the you know the whole the pipeline but as far as you know what you say and how you position this you know roger and kenny once you guys take that one yeah um i guess the the the original question was around like uh compare and contrast to other asset classes yeah um this is not real estate right this is not where you're gonna be you put some money in get a pretty steady five six seven percent return and then if things go sideways you just foreclose and you have an asset like it's very much not it if things go wrong here it's it's uh it's acoustic right like this that's the reality um so so you're right well not actually no not a goose egg because aj your points are spot-on you can do some creative financing tax credits things like that so your floor is significantly larger than zero like it is in venture so this asset class is somewhere in between um but and then you know back to the tribute or anything we've said about 100 times and then it becomes all about um you know take away the real dogs try to put the floor in place like aj said diversification all of those things but if you're coming into it uh cavia go back to your original framing if you're coming into it looking for a steady return you probably should go somewhere else it's not going to be that super steady it's fair um question from the audience where how will the fund source the potential portfolio projects and what would the typical check size to each project be uh i i'd say from uh you know because mark or the general partners are also uh you know active producers you know we have projects that we've been sourcing and developing um even before uh the formation of regiment and you know the network we've created over the two to three decades in relationships with uh management agents uh other production companies distribution and foreign sales companies um that is where the bulk of them will come from um and and you know it's mostly that network effect that brings us the the best projects we look for projects that do have some attachments if not we certainly can do that um average check size on a on a feature film we're looking between 2 and 2.5 million for that and on a small portion we'll get into development and packaging but only on films that we're willing to you know come in and and and do that follow-on investment to see that project into production i'd say also sourcing is really um not so much the issue is selection um we definitely will uh you know the committees uh will be selecting the films together with an uh unanimous decision um so uh that's very important to note that um if if you wanted to touch on that uh kenny um so yeah so as far as the the actual modeling goes uh what aj touchdown is spot on at two to two point five we do focus on diversification so um you know the way the fund is actually structured is there will be kind of a recycling of the capital so as as kind of the original ones um roll out we will up to a certain point roll that back into the fund to really give you know just a larger number of um assets or investments under one uh umbrella to get that diversification without folks having to really think it through and then as far as the timeline of each individual um investment we're looking typically in that it's hard to tell up front um but we're really looking at that 18 month window or so um give or take you know six months on either end uh for the the film to get out there start having dollars coming back and have a pretty good idea of how that the assets gonna turn performance yeah absolutely selections is is gonna be the biggest key because you wanna be the most popular person in the room is say you have a film fun i mean everybody's got um a friend cousin mother sister who's got a story that they want to tell um the same thing is true when you're talking to the agencies and managed management firms and and other producers if if you have equity dollars to deploy and allocate um you really need to be smart about where you're putting them because there is no shortage of projects um the shortage is of good projects that have a chance to break out and that's where we'll be diligent in our uh efforts to weed out the uh the dogs so to speak good stuff the um the opportunity that you know you were kind of drilling down on before that kind of came out of covid with the you know the distribution getting shuffled um andy made a great point of uh it was a catalyst like a steroid shot you're kind of going this route but you know kovid sped it up do you see this investment opportunity you know roger mentioned the the minimum guarantees from the distribution partners like netflix like for the life of the fund do you see other entrants coming in and kind of squeezing out the arbitrage that exists here or do you see this opportunity where you've got these minimum guarantees and these tax credits to be able to hang into the distribution where the fund can deploy over the next you know three four years and still seize enough opportunity where it's generating a a nice return yeah i think honestly no no time has been better to launch a content fund i mean if we were you know into our first two three projects or had some projects that are finished right now we'd be that'd be the only way to be in a better position right now there's absolutely a premium that all distribution partners are going to be paying for content that's across the board and you know our empirical case to this is in 2007 2008 there was a 100-day writer's strike that created just a huge huge stoppage of work and at the end of that there was a premium to be paid for finished content and that lasted for quite some time well we're talking about a full year thousands upon thousands of projects have been cancelled the studio projects that were completed or have been completed are putting their distribution dates off so the engine in the independent and middle level um studio and independent studios that used to churn out project left and right and fill that pipeline they got shut down and so for the groups that can again have that smart selection for the right project and can get that project produced efficiently and effectively on budget on time and can do so within this window i think we have 24 to 36 months that there's going to be a premium that's going to allow us to catch up before that pipeline's back to normal um which with the thesis we have kind of played out aligns very nicely for us to capitalize on that great very cool um give another opportunity here for any questions from the audience uh brendan do you have anything to to ask or add on mute it was that good yeah uh if there's any audience questions feel free to throw those out um i was just thinking you know people see that georgia peach at the end of ozark the end of so many movies you know maybe you guys could just talk a little bit about the tax credits and that that's a really burgeoning thing for so many growing film film uh locations yeah if they throw the peach on the end of the the credit crawl i think they get an extra 10 percent so that moving no joke uh so that's part of it is to give credit for where you you do it i i think for the funds perspective and i'll yield because i have been doing a lot of talking we're gonna look for a floor of around 25 percent that we'll look look forward to to net out on our tax credit um there's you know illinois is at 30 percent not everything's going to qualify you know atlanta is amazing atlanta's you know 35 percent and they also allow for out-of-state um yeah expenditures um which is why they're the number one production place in the world right now um so you know utilizing those tax shelters if you will or tax incentives to again put a floor um you know on a total loss and you know allow us to also as uh kenny has advised me on the financing terms but to have a better return on our cash expenditure it's uh it's uh it's a good opportunity for us and you know the good thing is also is most studies have shown these tax incentives um have been a big boon to the economy and and you've seen places like i think it was a couple months ago that you know pritzker here in illinois just you know flat hey we're going to 2026 before we even adjust these again and take a look at it because it's been such a a boon for the economy and and for job creation yeah and i i was living in chicago when those first started and j st kind of seeing you know me as a layman just walking around seeing things pop up hearing about people doing projects that brings jobs to the local area atlanta's been doing it chicago and illinois has been doing it there's other places that pop up and present opportunities for films like uh projects and uh funds like this exactly um so any questions anyone wants to pop in just a comment because i just thought it was so funny because you're right that the tax credit thing is a big deal um and growing but in illinois it is such a small community like aj and roger ran me through like okay here's the process of how you get your tax credits and all those things and it basically was caesar just takes care of it like there's one dude i'm like brilliant i love that approach all roads all roads leave to roam yeah no the film office does a good job and they they've been a good partner uh for for both roger and the rest of the filmmaking community here in illinois and um processing those and and and there's a great due diligence that they go in to make sure that everything and all the expenditures are on the up and up and you know they work with you well but yeah caesar definitely is the one who holds the key here in uh in illinois awesome well thanks so much everyone this is a really cool uh webinar and asset class to talk about uh mike any closing comments here we thank everyone for coming here today stopping down just thank thank you brendan for hosting really appreciate everything rocket dollars doing in the space with people allowing investors access to their self-directed iras to to invest and just the marketing partnership you guys have had and kenny roger andy awesome it was really fun talking about this with you guys and uh excited to see where this goes and uh you can use regiment or rangers for fifty dollars off of your rocket dollar account we've had a people just in the last week that uh uh name drop regiment so thank you guys all right thank you everyone thank you all right we'll pop this up on youtube right after this so feel free to uh spread around the recording if you have anyone that would be interested thank you thank you cheers