The following is an email I sent to a former acting student of mine who asked about forming a theatre company in Los Angeles. The show she mentioned was eventually mounted in Hollywood and she told me that my email had an impact in how they went forward. I reread the email and decided the advice was worth sharing.
______!
It's so great to hear from you. I love that you've started a theatre company!! Yes yes yes, this is a great thing to do. ____________ sounds like a wonderful idea and that fact that you're focusing on a female driven story is just the best.
Your question about obtaining financing is the million dollar question. As long as [your] Theatre is in operation you'll be addressing and struggling with this question, so my advice is to cozy up to it and get used to asking, looking, searching.
It sounds like ___________ is helping foot some of the bills, which is a great start (a better start than we had at IAMA). And I think that your goals for wanting to pay everyone involved are really great to have though they do come at a high cost. I do have some experience with Grants though I have to say that they are time consuming and it's probably best to think about Grants for the long term existence of [your] Theatre rather than to fund a single play, especially the first play. A grant can often take months to apply for and even more months to hear back about. And also, once you've had some work and some successes it will probably be easier to obtain some of those grants.
Here's my thought on approaching producing when starting out: Beg, Borrow, Steal. "Begging" will get you to improve your relationships with people and build your negotiating skills. "Borrowing" will gain you valuable partners. "Stealing" will get you creative in how you make things. And all of these things will get you things that you'd otherwise have to use money for all while increasing your producing skill set.
Of course you'll still need more money (that problem never goes away). There is always Kickstarter and Indiegogo, which can be very useful in bridging a financial gap. But here's my humble opinion about Kickstarter: you can only use it once in the life of your organization. It can be a useful marketing campaign to get people excited on Social Media, find goodies to give away to folks who can cough up $20 or $100. But you can't count on this as a continual source of funding, so if you decide to use it, use it wisely, and probably only use it once. Asking an audience for help every year or so doesn't look good. But, if you only need a few thousand to bridge a gap, it could be your answer to start your company. Then if you make your goal, you have funding. When you re-coop some box office, hopefully you break even or do just a little worse than even. That money then can go towards your next project.
When we started IAMA we really just had a couple thousand bucks (mostly chipped in from company members) and a mattress, and a couple chairs. From that, over a decade, we built a small business. You can do this too.
It depends how much money you're really asking for. If it's just a few thousand you may consider Kickstarter, or asking around for parents who have money and want to help. Getting under an umbrella like the Pasadena Arts Council can be helpful in offering tax deductible incentives for donors, but PAC does take a percentage for that ability. If you need more than just a few thousand, if you're talking about tens of thousands, it may take a little more time to build that kind of capital. Unless you have a single donor at the ready, it may be hard.
My personal advice: don't wait for all the funding if you can help it. Get to the making, get to the craft, make the art. Once it is out in the world people will come out of the woodwork, a graphic designer, a lighting designer, a writer, an actor. These things will help. If you wait until you have 25K to drop on your first production, you may be waiting for a long time.
I hope some of this is helpful. Mostly, I'm just thrilled that you're making this step.
And you better invite me to ___________!
Love
Christian