Do you think a film investor would know what a drop shot was? Filmmakers understand – but an investor wants to know about IRRn and MOIC.
and filmmakers are going ‘wha…?” Every filmmaker should understand IRR and MOIC when talking to investors.
Why?
Because this is how investors decide whether your film is a good investment or not.
Let me explain
MOIC stands for Multiple on Invested Capital. In simple terms, it measures how much money comes back compared to what went in.
ie: If an investor puts in £100,000 and gets £100,000 back, the MOIC is 1.0. Nobody lost money, but nobody made money either.
If that same £100,000 returns £200,000, the MOIC is 2.0. The investor doubled their money.
Simple enough.
But there is another metric investors care about just as much, sometimes more: IRR.
IRR stands for Internal Rate of Return. What it really means is this:
How long does it take to get the money back?
- A week?
- A year?
- A decade?
Investors think in timelines. The faster money returns, the faster it can be reinvested into the next project.
I asked Dean Goldberg how he explains IRR and MOIC to people who struggle with financial jargon. His answer was brilliant.
“Most people don’t get it. I’ve tried for years to explain it.
So forget the abbreviations and think about it the way your grandfather on that amish mennonite farm would have understood it.”
IRR and MOIC Explained Like a Farmer
It’s true. I grew up on a Mennonite farm outside Toronto. so, let me try and explain investment like farming.
MOIC is the total harvest.
IRR is how quickly the crop grows and how many times you can plant and harvest in the same period.
TRUTH: A fast-growing crop with a smaller harvest can often be more valuable than a giant crop that takes years to mature.
MOIC = Total Yield
A farmer asks:
“How many sacks of grain did I get from the seeds I planted?”
That is MOIC.
It does not care how long the crop took to grow. It only cares about the final pile of grain.
IRR = Speed of the Crop Cycle
Now the farmer asks:
“How quickly did the crop grow, and how many times can I replant during the year?”
That is IRR.
A crop that grows in three months may allow four harvests a year.
Another crop might take two years to mature.
Even if the slow crop produces more grain overall, the faster crop may be the better business.
Three Farmer Examples
1. Fast Crop vs Slow Crop
- Crop A grows in three months and produces 2 tonnes.
- Crop B grows in two years and produces 4 tonnes.
- Crop B has the larger total yield.
- Crop A produces more yield per year.
Many farmers would choose Crop A because it keeps the farm moving and generates cash flow faster.
2. Potatoes vs Walnut Trees
Potatoes produce a decent harvest every season.
Walnut trees may eventually produce enormous value, but you could wait ten years before seeing meaningful returns.
Same land. Same effort. Different speed of return.
3. Renting Out a Field
A farmer rents a field for £1,000.
Option A pays back next month.
Option B pays back over three years.
Same amount of money.
But the faster payment allows the farmer to reinvest sooner.
That is IRR.
One Sentence Summary for Farmers
- MOIC is how big the harvest is.
- IRR is how quickly you can harvest and replant.
Investors care about both, but speed often matters more.
Now let’s translate this into filmmaking.
MOIC = Total Revenue
This is the total amount your film eventually earns.
Imagine you make a microbudget feature for £100,000.
Option A
The film earns £300,000 over ten years.
Option B
The film earns £200,000 in six months.
Option A has the bigger total return.
Option B is often the better investment because the money comes back quickly, allowing you to finance your next film.
That is the key difference.
IRR = How Fast You Recoup
Independent filmmakers live and die by recoupment speed.
Fast recoupment means:
- investors get paid back
- you can raise money for the next film
- momentum continues
- your career keeps moving
Slow recoupment can stall your career for years, even if the final number looks impressive on paper.
Three Filmmaker Examples
1. Festival Sale vs Slow Drip
Your film premieres at Raindance Film Festival.`A streamer offers £150,000 immediately.
Another distributor offers the same amount spread over eight years.
Same total revenue.
Very different outcome.
The fast sale allows you to make the next film immediately.
2. Crowdfunding vs Backend Points
You raise £20,000 through crowdfunding in two weeks and begin shooting immediately.
Or someone promises £20,000 in backend points that may or may not arrive years later.
Same theoretical value
Completely different practical value.
3. MG Upfront vs Long Recoup Waterfall
A sales agent offers a £50,000 minimum guarantee on signing.
Another offers £50,000 only after marketing costs, expenses, overhead, and recoupment.
Same number on paper.
One arrives now.
The other may arrive when your hair has turned grey.
How Studios Think
Major studios do not think film by film.
They think in slates, franchises, and cash flow cycles.
For studios:
- fast returns are gold
- slow returns slow down the entire slate
- money must come back quickly to finance the next project
Studios care about velocity, not just total revenue.
Independent filmmakers often focus only on how much money a film eventually earns.
But if indie filmmakers start thinking a little more like investors, they negotiate smarter, structure deals better, and protect their careers.
The Real Lesson
A film is not just art. It is also a financial engine.
The question is not only:
“How much money will this film make?”
The better question is:
“How quickly will the money come back?”
Because speed keeps careers alive.
One Sentence Summary for Filmmakers
MOIC is the total return.
IRR is how quickly the return arrives.
And in independent filmmaking, speed often matters more than size
Consider Raindance
Come and see the amazing independently produced at the 34th annual Raindance Film Festival June 17-23
Most attendees choose the Festival Pass
Photo Credit: Bertie Watson
I founded Raindance Film Festival in 1993 because the British film industry was closed, polite, and congratulating itself while shutting new filmmakers out.
I co-founded the British Independent Film Awards in 1998 because British indie film deserved more than a shrug, a pat on the head, and a Tuesday night screening.
Raindance didn’t start as a brand.It started as a rebellion — film training without gatekeepers, a festival without permission, and a community built by filmmakers who weren’t waiting to be invited in.
Later, we took it global — Toronto, Vancouver, New York, LA, Berlin, Brussels — because independent film doesn’t belong to one city, one class, or one accent.
I’ve produced 700+ short films and seven features, including Deadly Virtues (2014) and ALICE, which won the SXSW Grand Jury Prize (2019) not because someone “discovered” us, but because the work earned its place.
I’ve written three books used by filmmakers worldwide because too many courses taught compliance instead of survival.
In 2009, I was awarded a PhD for services to film education, ironic, given that most of my career has been about tearing down the rules that education insisted you follow.
I don’t believe in waiting for permission.I believe in making work, building systems, and forcing the industry to catch up.
Specialties: Independent Film (the real kind) · Producing · Writing · Film Education · Festivals · Breaking Broken Systems
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