The overwhelmingly positive response generated fast talk within the theater community.

"In the workshop, everyone flipped out," said Vogel, who did not invest in the musical. "But you never know that it will turn out the same way on Broadway.

"It's all hand-crafted," he explained. "The same thing you see in a workshop might not be the same thing you see on opening night. It's not like making widgets.

"That's why it's always a gamble," Vogel said. "But people who are going to invest -- most basically, and ultimately -- are going to do so based on the skills of the producer."

The buzz brought out other producers, but the money quest began in earnest in December 2001, Lion said. "That's when we got the commitments for the large money," she said.

Two "backers' auditions" for potential investors were held that month. They were led by Marc Shaiman, an Academy Award-nominated composer whom Lion immediately brought to the project, and his partner, Scott Wittman. By the end of the year, New Line had exercised its own option to become a major "Hairspray" producer -- and the Baruch Group came aboard after seeing just one act. "The idea for the show was fabulous," Steven Baruch said.

The investor group, which began investing in theater with the 1985 production of "Penn & Teller," brought in 230 investors. Each had to put up at least $10,000. "Nobody commits suicide if the show fails -- and you're not beholden to one large investor," he said.

Other backers coming aboard, each putting up at least $1 million, included SEL-GFO, a partnership that will produce an Australian "Hairspray" tour.

By late spring, "Hairspray" had 14 producers and more than 300 investors.

"It's pretty unique that they would have such a huge body of investors," said Robert Hofler, Variety's theater reporter. "Most producers would go to 30 different investors. A number of them are independently wealthy, so it may be all of their own money."

Seattle's 'calculated risk'

David Armstrong, producing artistic director of the 5th Avenue Theatre in Seattle, also attended one of the December readings. He immediately began talks with producers about "Hairspray" making its out-of-town debut in Seattle.

In a unique arrangement, the theater company agreed to put up $1.2 million for the musical's out-of-town tryout. Musicals easily can spend $500,000 on such a tryout.

"The $10.5 million they needed to spend and take it out of town, $1.2 million of it they didn't have to worry about," said Armstrong, who's been at 5th Avenue's helm for almost three years. "They didn't have to raise it."

While it was a risk-free deal for the "Hairspray" producers, it wasn't the case for 5th Avenue, Armstrong said.

"It had very little name recognition," he said. "It was based on a cult movie with a cult star [Divine] and a cult audience."

During the musical's first week in Seattle in May 2002, 5th Avenue's 2,100-seat theater played at 30 percent capacity, Armstrong said. But not for long.

The word got out. "By the fourth week, we were turning away people in droves," Armstrong said. "The audience built steadily each week."

The bet paid off for 5th Avenue, too. The company sold $1.4 million in tickets -- recouping its initial investment plus a profit -- and increased its subscription sales, which now stand at 26,500.

In addition, the company receives a weekly cut from "Hairspray" Broadway ticket sales, and it will get a return from any national tour. It also will receive a portion should the musical tour in London. "Hairspray" also will play 5th Avenue in the fall of 2005.