If you put your money in a savings account, you’re going to get less than half of one percent APY. Even if there was no such thing as inflation, that would still be laughable. As is, you’re losing quite a bit of money if you park a lot of cash there.

If you put your money into a high-yield online-only bank, you can do a bit better – 4 or 5%, say. This money can often be liquid, so it’s not a terrible place to hold some cash while you wait… But your money isn’t doing a whole lot of work for you there, even if it isn’t dying to inflation.

If you put your money in the stock market, it can be highly risky, depending on how you invest, but with a properly diversified portfolio or mutual fund, you can reliably make an annualized 11 or 12%.

Not bad. But there is an industry that offers its investors a 20% preferred return:

The movie business.

Yes, there is still a very real risk here, but the risk isn’t as great as you might think. Big box office bombs grab the headlines for how much money they lose, but professional powerbrokers and financiers are savvier than we like to give them credit for, no matter how bad a major studio’s showing might be. Completion bonds, performance bonds, and other forms of insurance make it difficult to lose your shorts investing in a major motion picture from one of the big studios.

The problem? Paramount isn’t taking your calls right now, and Sony only wants your money if you are buying a ticket. No matter how much you’d like to invest in the next Marvel movie, you simply can’t.

But one faith-based studio and distributor is changing all of that:

Angel Studios, the grassroots, Utah-based company behind the first few seasons of the wildly popular TV series The Chosen, as well as box office successes such as The Shift, Cabrini, and the breakout hit Sound of Freedom.

Angel Studios has begun releasing advertisements that they are looking for investors to join its “Angel Guild,” a group that currently consists of over 300,000 audience members that contribute to Angel Studios at a rate of about $20/month, in order to get sneak peeks, discounts, and vote on what films and TV shows get produced and distributed.

If that sounded unusual, that’s because it is.

“Executives have been controlling what we watch for the last 100 years,” an ad for Angel Studios new round of fundraising begins. “Only a handful of Hollywood executives… Executives have no idea what kind of content actually matters to you.”

It’s a fairly solid point. Internal politics, nepotism, vanity projects, and a too-big-to-fail studio system often produce films that no one is interested in seeing. In 2023, for example, entertainment colossus Disney severely underperformed on 7 of its 8 major theatrical releases.

In response, Angel Studios appeals to crowdfunding tactics and audience voting to align viewer demand with studio supply.

Because of the Guild, Angel Studios has reached $35 million in annual recurring revenue, and it is now offering the public a Reg A+ offering at $30.24 per share, with a minimum initial investment of $151.20. As the company itself declares, back in 2016, they were selling shares for $3, a change that shows significant growth and potential. But all may not be as it seems.

Reg A+ is a semi-difficult security to wrap your head around, so if finance is not your background or strong suit, check out this FAQ for more information on what it means for a company to distribute this kind of security. The overly simplified explanation is this – Angel Studios is not publicly traded, so your shares will have limited liquidity, but they could technically become openly traded in the future (though Angel says they have no plans to do this), and for the time being, you can share in a specified portion of the returns from individual projects Angel Studios distributes.

In the current round of fundraising, they brought in the full amount they were allowed to raise – a whopping $20M. The company touts 20% ROI on recently funded projects for investors and a revenue chart that shows $77.5M in 2022, which grew to $202.4M in 2023.

Source: https://fansinvest.angel.com/

But before we get too excited, let’s qualify those numbers, and where Angel Studios finds itself today.

In 2023, Angel Studios distributed the smash-hit “cause” film, Sound of Freedom, which made $250M at the box office. Angel Studios does not receive 100% of that money, naturally, but it does reflect a significant portion of their 2023 revenue. Studios like to post hugely successful films as indicative of future performance, but most of Angel Studios’ successful theatrical releases have made between $10M and $20M, which is still a great take for low-budget films, but it has to be kept in context. Angel is highly unlikely to repeat a success on the level of Sound of Freedom, and we are willing to bet that they left off 2024’s projected revenue from the chart for a reason: 2023 was an outlier. That doesn’t mean the company isn’t doing well, but it takes more than two years of data to show a good trend line.

Sound of Freedom was an outlier in more ways than one, however. It had a relatively modest budget, at under $15M, it was heavily wrapped up in a cause (anti-child-sex-trafficking), made use of block-ticket-buying and pay-it-forward tactics, and churches and other organizations got involved in its promotion. Sound of Freedom may have been a unicorn, and expecting something from Angel to repeat the performance may be wishful thinking.

Some of Angel’s upcoming releases are riskier than Sound of Freedom, as well. The company has poured over $50 million into a 2025 animated feature film musical called David. Certainly, a high production-quality children’s film about a Bible hero would have broad appeal – but $50M is a lot of money, and an awful lot of people are going to have to turn out in order to make it work.

To make matters worse, Angel Studios has lost its rights to association and distribution for The Chosen, so that will impact their future revenue as well – another concern for investors.

Most major motion pictures give a preferred 20% return to investors, but after that, if the film is very successful, they get an additional return. This does not seem to be the case for backers of Angel Studios films. On a fundraising page, Angel boasts that it paid 20% returns to investors of Sound of Freedom – which is strange, as the film made well over 1500% of its budget.

And, if you purchased from this latest round of fundraising, the offering documents made very clear that you are not necessarily entitled to dividends when Angel turns a profit. In fact, they tell you not to expect one, as they will be reinvesting profits.

So, you can’t sell your shares, and your shares don’t make you any returns.

It may be fair to ask whether this is really an “investment” or a “donation.”

Certainly, if the day comes when Angel sells off or merges, it’s possible that this common stock could pay off in a big way, but there is nothing so far to indicate that something like that is ever likely to happen. It can be argued, as well, that the recent fundraising materials from Angel have been somewhat deceptive to their target audience. It sure seems like this is a money-making opportunity, until you scroll way, way down and read the tiny, italicized print, or click through all of the FAQs, or read the fundraising documents. Certainly, serious investors will do this, but the average Angel Studios fan might not. Many of the comments on Angel’s social media fundraising ads seem to indicate that people are donating their money thinking they will see a return.

From an investment standpoint, it may be a reasonably good bet to invest in a particular film from Angel, but if you’re looking for a reliable ROI, you might want to look elsewhere – and don’t forget to read the fine print.

Sent to Win does not give financial advice. This article does not constitute financial advice, and it is for entertainment purposes only. For financial advice, consult with a licensed, certified professional.