Avanity investment is one in which making money isn't the primary motive or, sometimes, even a motive at all. It's a bit like the vanity press, which caters to authors who are willing to pay the full cost of publishing and promoting their own books, just to see their names in print. For these authors, the goal is to have books in their hands to give to friends or customers. Bookstore sales are unimportant.
You can occasionally make money with a vanity investment, although it's rare to make big money. Take, for example, my experience with a show-stopping vanity investment.
Ever since I came to New York, I have wanted to invest in a Broadway show. Now that's a vanity investment if there ever was one. I know perfectly well that the odds of a Broadway “angel” making money are slim. Fewer than one out of four shows recoup their investments. But I'm an inveterate theatergoer, and I really wanted to be a part of the Broadway scene. Knowing the odds, though, I was never prepared to commit any large sum to satisfy this longing.
Suddenly, an opportunity opened up for me. I found a producer who would accept small investments and pool them, like limited partnerships in real estate or oil and gas drilling. The minimum investment was usually $10,000. I passed on the first show they offered me, the Producers. Big mistake; it became a huge hit.
But they next offered an investment in Hairspray