The Obstacle of Startup Funds
In Which I Respond to an Old Friend Who Read My Book and Has Some Questions
The Funding Obstacle
A few days ago, I stumbled on the writing of a friend from the Olde Days of Theater Blogging, who these days is trying to keep a low profile on the internet and so I will refer to him only as…Abercrombie. (Don’t ask me why—it’s just what jumped into my mind. I’ve been reading Dickens lately, so it could have been worse.) Anyway, to my astonishment, when I located…Abercrombie…he’d posted a response to Building a Sustainable Theater. (I promise I was not Googling myself or my book, mainly because when I do I end up with thousands of links to Sir Walter Scott’s Ivanhoe and ain’t nobody got time for that.) He was promising further writing about the general collapse of the regional theater. I, being an impatient type, emailed him to catch up and ask about his thoughts about my book. Here’s one of the things he said:
“The first [issue I have] is the notion that young people might have $5000 to invest into (and possibly lose) a small theatre company. In this economy, where young people cannot save for and buy a house, or a car, where interest rates are prohibitively high, and student debt weighs them down, where is a young person going to come up with $5K, and where are they going to find a collection of like-minded friends who also have $5K to invest in a start-up theatre?”
Excellent questions. For those of you not in the know, this refers to my insistence, in the chapter “Skin in the Game,” that each company member should be required to buy a share in the theater for a minimum of $5000 each. I knew when I was writing the book that the question of self-funding (or bootstrapping, as it is called in the entrepreneurial world) was probably going to rear its empty wallet at some point. And while I addressed it somewhat in the chapter, I ultimately decided to refrain from letting the chapter turn into a defense of future objections and instead just make the case. I knew, though, I’d have to eventually talk more about this, so this is my first attempt to do so.
The Usual Path
Abercrombie is right—a student just emerging from their undergrad degree is usually not rolling in dough. I myself, in my 20s, facing mortgage interest rates of 16% and equally usurious auto and credit card APRs, would have probably read my own book longingly and then sadly placed it back on my bookshelf (or more likely returned it to the library) without any hope of putting together such an amount. So I get it. I really do. And I could see how some people might be better off waiting until a few years after graduation to start considering this move, so that you have a better financial foundation. Except…
That’s not really how it works, is it? The reality is that your undergrad BFA or conservatory will have been priming and polishing you for a move to a Big City (New York, Chicago, LA if they have connections; the nearest metropolis—Boston, Minneapolis, Atlanta, Seattle—if they don’t) to Follow Your Dreams. Indeed, probably as your cohort neared graduation day, your program likely set up a “showcase” in said Big City during which you and your fellow soon-to-be-graduates showed your wares to a gathering of agents and casting agents, and maybe you or some of your friends got offers from one or two and, flattered, you sign with one of them.
And now you start spending money: you’ll need resumes, rtequiring an expensive photo shoot and the cost of duplication the photos for live theater auditions (let’s be conservative and say $900 altogether); you’ll need some audition clothing ($500-$1000); the Big City Rent Premium—the difference between rent in the Big City Where Theater Happens and what you would pay somewhere else (let’s be generous and say $300/month or $3600/year, although the likelihood is that the hit will be much greater—I am told that rents in any borough of Manhattan are prohibitively expensive these days); you sign up for acting classes (not only to continue to polish your craft, but to make “connections”), and if you are a interested in musical theater, a working Broadway actress named Debra tells me, “Classes can really run into the hundreds of dollars for each, and singing lessons can be very expensive. If you do musical theater, you need to go to dance class multiple times a week in order to keep up, or gain, skills.” You’ll need some self-tapes (Debra: “Self-tapes require a backdrop, a ring light, a tripod and can be recorded on your cell phone”) and if you are interested in doing voiceovers, says Debra, “Voiceover auditions are recorded on your laptop, and if you are really serious about that kind of work, you need to invest in a good microphone, an audio interface, and find a way to transform your closet into a recording booth.” And so on.
Even without the classes, between rent, clothes, website, and photos you’ve already spent $5000 on the first year of your career just getting ready. And if you can’t afford it up front, then you get the day job (Debra says, however, that the traditional actor day jobs that allow flexibility and time for auditioning—jobs like “temping and cater-waitering”—are “not as available as before, so they will have to really look hard and be creative about what kind of survival jobs they can get”) and pull together that amount over time. The likelihood is that you’re not going to land a paying theater job during that first year, you’re just going to be auditioning (or interviewing, or doing a poorly paid internship), so at the end of the year all that money is now gone. Am I wrong?
And it’s really not much different for directors, designers, or playwrights (the latter should read Todd London’s Outrageous Fortune: The Life and Times of the New American Play for a look at that particular hellscape). Their teachers usually haven’t explicitly mentioned these costs because if they did, the students would freak the hell out. Nor do we teach young theater people how to keep track of their expenditures, or basic financial literacy at all, and so they don’t think those expenses count as startup costs. They just keep swiping their credit card.
So the reality is that none of these young theater artists are saving to buy a house or a car, and most of them are also paying off student loans. When it comes down to it, the only real difference between a theater artist who invests $5000 trying to “make it” in NYC and those who band together to form a theater somewhere else is who you’re paying the money to: the photographer and the landlord, or to your theater.
And it’s no different for any other artists, really.
Musicians who dream of being in a rock band are spending thousands up front on instruments and amplifiers; classical musicians are buying a quality instrument (a decent cello, for instance, costs between $3000 and $10,000); visual artists are buying the equipment and materials necessary for their work (glassblowers and potters need expensive kilns, sculptors need tools and expensive raw materials; all of them need studio space); young filmmakers are constantly maxing out their credit cards to make their first film. And so forth.
Nor is this scenario true only in the arts. The vast majority of small startup businesses are bootstrapped (episodes of Shark Tank to the contrary). Sure, somebody with a business degree may be able to find a well-paying job right out of undergrad, and that’s great (I guess), but there is no similar path for artists, and there never has been. It’s always been a crap shoot.
So the question is whether you want to rely on others to recognize your talents (insert your rendition of “I Hope I Get It”), or whether you want to steer the car.
Which still leaves the matter of coming up with $5000.
The Best Worst-Case Scenario
We’re still looking at a hypothetical recent grad. (My preference would be for our young triple threat to read my other book, DIY Theater MFA: Growing Your Theater Skills When You Don’t Have the Time, Money, or Opportunity to Pursue a Graduate Degree and spend a couple years learning a bit more. But that’s not what we’re doing here right now.) [Oh my — THAT was shameless self-promotion.]
Let’s start with the best worst-case scenario: you graduate in May and move back in with your parents and get a full-time position as a clerk at Wal-Mart. Not exactly living the dream, I know, but I suspect most of us can put up with a lot as long as we know that it is temporary, right? Or as Nietzsche said, “He who has a why to live for can bear almost any how.” Your “why” is having your own theater.
According to my Google search, the median hourly pay for a Wal-Mart clerk nationwide is $15/hr (i.e., $600/wk). According to smartasset.com, after taxes you can expect to take home $471/week working 40 hours. Let’s give you $71/week spending money (and your parents are generously not asking you for rent, and they let you chow down at their table and watch their TV): so you’re netting $400/week. If you’re serious enough about this, you’re looking at 12.5 weeks to get your $5000 together. Three months. June, July, and August. If you’re not willing to do that, I don’t know what to tell you.
The Worst Worst-Case Scenario
Let’s make it harder. You can’t move in with your parents, and you have to fend for yourself. Now what?
Well, first of all, make sure you’re not trying to live in the Big City (see above). Not yet, at least. Seek out a place where the cost of living is more reasonable while you save toward your $5000 investment.
Let’s say you’re putting a roof over your head and food on the table working the same full-time job at Wal-Mart making $15/hr that we mentioned before. Bringing home $471/week is barely covering your everyday costs, but you’re making it. Hold tight to the Nietzsche quotation, because things are about to get challenging.
First, establish your “appetite” for this project (see “Chapter 24: Project Budgeting” for a definition of “appetite”): how much time are you willing to devote to raising this money? Be specific. What’s the maximum number of weeks you’re willing to put up with doing whatever it takes to raise $5000?
For the sake of argument, let’s say you determine you can do this for six months, or (to make for easy calculation) 25 weeks. Math: $5000 divided by 25 weeks = net $200/week. That’s your goal. And be rigid about that goal—don’t make it casual. In your mind, don’t think, “Well, if I get to 25 weeks and I’m still $750 a way, I’d be willing to do another month in a pinch.” No. You’ve got 25 weeks. Period. If you mean 29 weeks, say 29 weeks. Be realistic and specific. This creates discipline, and helps you hold your feet to the fire when you’re tempted to say, “Well, I want to go out drinking with my friends and I’ll probably spend $35, so $165 is good enough this week.” If you do that once, it’s easier to do the same thing the next week, and pretty soon your 25 weeks are over and you’re a grand short and you throw in the towel.
Now you’ve got two choices for making that $200/wk: reduce expenses or increase income, or a combination of both.
First, take a good, hard look at how you’re spending your money. Are there any items that you could do without for 25 weeks that would contribute to your goal? Yes, I know, we often spend money on things to make us feel less unhappy about the grind of our daily life (“I deserve this because I have to work this crappy job and my life is shite”) —we all do it, it’s human nature—but if we know this process isn’t going to last forever—in this case, it’s only going to be 25 weeks (this should be your mantra, one that gets smaller each week)—and that it is in service to making a better life in the not-too-distant future, then maybe you can skip a few things. Can you make your own breakfast coffee, take a bag lunch, and cook your dinner at home instead of ordering in? Could you cancel any streaming services? Car expenses? Bake cookies instead of getting a candy bar from the vending machine? Let’s say you look hard at your current spending, and you can find $20/week that you could cut out. Do the math (and I mean actually do it): 25 weeks x $20/week savings = $500. That’s 10% of your goal! Now you only need to clear $180/week.
Next, you have to decide how to find the rest of the money. And this is where it sucks. It might mean getting a second job: at $15/hr, that’s 15 hours a week. Do you want to get a roommate to reduce your monthly rent? Are there any odd jobs you could do? Could you be a Lyft driver part-time? Do you have anything you own that you could sell? Any work from home stuff you could do?
Debt is also a possibility. Shakespeare borrowed the amount he needed to buy his share of the Lord Chamberlain’s Men. Is there someone willing to loan you some money for, say, a year? Are you credit-worthy enough that you might qualify for a low-interest bank loan or credit card? (Be very careful about this.)
The only rule is that every time you get paid, you immediately put your $200 in a separate account, preferably at a bank different from the bank where the rest of your money is. If you can set up an automatic deduct, do it. Make it as difficult to “borrow” from yourself as possible.
None of this is pleasant, and I do not minimize the pain at all. The only thing I can say is that it will only last as long as you have decided it will last. You’re in charge. It is your first experience of being in charge of your career. You’ll have to do similar things if you have your own theater company.
And while it will require some short-term sacrifice, at the same time, I would note that it doesn’t take that long to save $5000 if you’re disciplined (and if you’re not, you have no business starting a theater company anyway).
The Real Issue
What I really see at the root of Abercrombie’s question is contained in the first sentence: “The first is the notion that young people might have $5000 to invest into (and possibly lose) a small theatre company.” It’s the part in the parentheses that is the real hangup. And yes, like all small businesses, a theater might not make it and that startup money will be lost. But the same is true if you’re trying to forge a career in NYC: at the end of your first year, you’ve “lost” all the money you’ve spent on your career that didn’t result in a paying gig.
And it’s not just one year—those classes, and rent payments, and all that stuff you need to keep searching for the next opportunity will be required year after year. And when nearly two out of every three members of Actors Equity don’t make a dime in theater in any given year—well, isn’t all that money “lost” too? My book doesn’t guarantee success, but neither does having a subscription to Back Stage. There are no guarantees in theater, or in life, and ain’t capitalism grand yippee ky yi yay I sound like Rich Dad, Poor Dad.
The question is: if it’s going to cost you $5000 regardless, who you want to bet on? Yourself or the gatekeepers?