Wade Bradley always wanted to get involved in the world of entertainment finance, but like most who considered it, he didn’t like the risky nature of it.

So Bradley, a venture capitalist turned entrepreneur, has come up with what he believes is a way to limit the downside and risk of trying to capitalize on the burgeoning independent film production market. He’s built an online community or matchmaking service for high net worth investors and independent filmmakers.

The company is called IndieVest Corp., and the concept brings investors including several private equity firms from all over the country together with the producers of independent films that are in development.

The would-be moguls and financiers can choose among the projects from an elaborate, subscription-only online database. Bradley teamed up with Mark Burton, the Academy Award-nominated producer of the Hindi-language film “Water,” to launch the venture, which started its national rollout this summer. So far there are about 100 members and more than 12 filmmakers’ projects in the works. The company has reviewed about 500 potential projects since December.

“I always had a passion for film, loved the marketplace and the possibilities for return on investment, but I couldn’t get comfortable with the level of risk in the independent marketplace so I tried to build a solution,” Bradley said.

IndieVest Corp. is comprised of IndieVest Pictures film division and IndieVest Securities, a NASD Inc. broker/dealer, both of which are wholly owned subsidiaries. The two have set up shop in Charlie Chaplin’s old studios on the Jim Henson Co. lot on La Brea Avenue near Sunset Boulevard.

“A lot of people from all walks of life want to get into the entertainment world, but they’re not enjoying the benefit of financial gain and that’s the problem we saw,” Bradley said.

Sounds great in theory; how it will pan out in practice remains to be seen, since there are a number of variables at play. Most significantly are the numbers. Are there enough people who want to invest? And is there enough viable material to pique potential investors’ interest?

Bradley thinks so, and said that he expects the company to bring in revenue of approximately $7 million in 2008.

Bradley wouldn’t discuss eventual membership targets, saying only that the company had exceeded its goals to date, but that the figures are “definitely not MySpace or Google numbers.”

“I don’t want to start telling the market how many people really are interested,” Bradley said. “It is a significant market space, one that’s been overlooked and underutilized.”

The subscribers who will pony up the cash to get the movies made is limited to individuals or firms that earn more than $200,000 a year or have more than $1 million in assets. The minimum investment is $50,000.

Bradley sees the company making money through four primary channels. The first is memberships, which are available to filmmakers and investors on two levels, premiere for $2,950 a year and all access for $4,950 a year.

Then there are gross box office receipts, of which a film’s investors get a 15 percent payment off the top after they recoup their initial investment in production and advertising. “After that (investor payout) drops to net profits,” Bradley said. The investors will typically get 50 percent to 60 percent of the lifetime total revenues from the film (including library sales), based on a formula negotiated at the time the financing is set up. Indievest takes 10 percent and the remainder goes to actors, writers, directors and filmmakers.

Long-term, the company hopes to cash in on its library. Indievest retains the rights to all of the films it arranges financing for. Finally, the company plans to host four conferences or panels each year.

Finding screen time

Arranging distribution, or spots in theaters for the films to play and draw viewers, will be crucial going forward. Bradley said the firm has no formal agreements in place with any exhibitors, but is counting on changing that with the addition of an unnamed studio executive, who Bradley said will join IndieVest’s ranks by September and brings “more than 30 years of experience” in studio-level distribution.

Conventional wisdom has it that putting up a specified level of P & A; dollars will guarantee distribution, and the company could rent theaters out through a box office split with theater owners or a straight payment. But there are few guarantees in show business.

“They really need someone in their camp who has experience in booking theaters,” said Stacey Parks, who runs the Web site FilmSpecific.com, which is designed to educate filmmakers about the distribution process. “If they don’t have any theater signing off right now it’s not technically guaranteed, and they’ll need to secure those deals. But they know enough to know that if they throw enough money at it, it could happen.”

Indievest is starting its first production this fall. The company will make three to six films in its first year then six to eight the next year, Burton said, and will focus on movies in the $3 million to $10 million range.

Burton and Bradley are hoping the upstart will lure top-tier material despite competition from a bevy of existing indie production arms in town by focusing on smaller pictures. Burton said he’s looked at 500 projects since December.

“Typically (studio) specialty divisions are making and acquiring larger films in a wider range,” Burton said. “This size of film is a forgotten corner of the indie space.”

Positioning the company as a smaller, “alternative” operation lets Bradley and Burton try to capitalize on an element of ‘anti-corporate’ spin that could play well in the indie market.

“People know that the model and things are changing; even very experienced filmmakers are looking for a different way to work,” Bradley said.

Back to basics

That’s not to say that IndieVest will be an anything-goes sort of operation.

“Like any vehicle in feature film we absolutely have oversight, from cost reports to what’s happening on the set. We will definitely be monitoring and making sure everything’s in line, and a rep would be on set for each project,” Bradley said.

IndieVest is not interested in acquisitions; for the time being the company is focused solely on scripts, including those with a director or key cast members attached and is focusing on projects based in the U.S.

Project selection is in the hands of a three-person development team that includes Burton; if a script meets their approval then it gets passed on the through the system for evaluation of the project’s cost, business and creative elements before being opened up to the membership community for investment.

Providing a detailed analysis of each project for potential investors is a new idea.

“It’s like a risk analysis where you plug in these factors and get x amount of dollars back. It’s an attempt to apply sophisticated financial formulas to the movie industry,” Parks said. “There is uncertainty there. You can have all those elements in place but if film looks like crap then nobody will go see it. All of this is untested, and there are an awful lot of unknowns, like human behavior.”