Your music career is a business and businesses need sustainable funding to grow. Choosing how you approach your fundraising can be just as important as picking what producer you work with or what publicist you hire. Those who know us are aware that we are very strong advocates for structuring your fundraising campaign as an offer to invest in you rather than a plea for a donation. But if the concept of “investment” may seem big, scary, and complicated, read on as we demystify it and provide a brief primer on raising funds. And since everyone loves lists, we’ll do it all in lists!
4 Basics to Remember
- You own several assets that someone could theoretically invest in: your recorded music, your publishing rights, and the rights to your live performance income. Each has its own nuances for how a 3rd party could invest in it, but none of them is rocket science to understand (and if you work with us, we’ll take care of all the paperwork).
- Your music income today, or maybe lack thereof, is not at all reflective of your commercial potential over the next 5 years
- An investment is not a loan – if things don’t work out, nobody is going to take your house. But it’s also not a donation – if you make money from the product that someone else helped you bring to life, they should make money too
- Investors - whether in stocks or gold - love interesting, unusual investments that aren’t widely available to the rest of the world
Top 5 reasons to look for investors vs. donors
- You’re properly aligning incentives and therefore creating true long-term backers rather than one-time supporters. If you win, they win - thus it’s natural for investors to want to support you beyond your first project.
- Potential for larger checks: put yourself in the shoes of your potential backers – would you offer more money to own 1 CD (that’s going to become available on Spotify anyway) or to own a stake in all income that CD may generate?
- Appearances - Professional vs. amateur. Serious industry people like dealing with serious musicians or their managers. A record label or publishing deal you may otherwise covet is nothing more than a large investment with a pre-baked team that will spend that money for you. By talking in terms of investments, you demonstrate that you see commercial potential in your work and have a strategy. Speaking of which:
- Forces you to define your “story” and a defensible plan of action. Best and quickest outcomes come out of having a solid brand, plan and strategy in place. This is an exercise every artist should be going through anyway, but presenting a cohesive story to investors is a great reason to get going.
- Makes you think about what your music is worth and why. Do you give up 20% for $10,000? 10%? 30%? Why? There’s no science to this question but it’s worth having an opinion even at an early stage. If you’re not sure how to approach this, let us know and we’d love to help think it through together.
Who can become your investors: 4 high probability suggestions
- Those who…invest! It may be your uncle who is a retirement adviser, your university professor who also happens to own 3 apartment buildings, or your buddy who lucked out investing in Uber early on.
- Brands. You may already be working with the likes of Jack Daniels or Urban Outfitters on one-off sponsorships of events. Offer them to invest that same money in your next project. $1,000 to one of those companies is a drop in the bucket, but the PR message of “We are long term-investors in indie music” can be priceless for them.
- Local businesses. The owner of the swanky cocktail lounge down the block would likely think even more highly of himself if he could tell his friends he’s backing a rock band. At the same time, your parents’ accountant could definitely earn some “street cred” by investing in a great act.
- Art collectors, fine wine connoisseurs, and anyone with a yacht.
5 Best Practices for Finding Investors
- Build a story. We’ve written on thinking about your career as a brand before, but it’s worth reiterating. It’s a competitive space and people have short attention spans. Condense your story to a one sentence pitch: e.g. “____ meets ____” is an easy one to get started with. Here are a few other examples of great artists who have been able to package themselves well, but definitely let us know if we can be helpful in crafting your story – it’s the best part of our job!
- Be proud of your objective to find investors. Present it as an opportunity you’re offering to your network and not as a favor you’re asking of them. Remember, if you take yourself seriously – others will too!
- Make it feel exclusive and available for a limited window of time. Not to be confused with the paranoia-inspiring nature of expiring donation-based campaigns, but it is important to emphasize that the funds you are seeking to raise are part of a bigger train that needs to keep on moving. And since you’re the one offering an investment, you’re in a position to make potential funders feel like the train will leave the station with or without them.
- Spin a little, bullshit never. The future is uncertain – people get that. There is nothing wrong with presenting your big vision for yourself (what’s the point of having unambitious goals?!). But there’s a fine line between painting a rosy future and misleading potential investors. If you are building your story on the back of artificially inflated social media numbers you bought for $25, the truth will catch up with you and damage your career in the longer term.
- Don’t assume your fundraising promotes itself. Not unlike your amazing video content, your live shows, or your latest EP – you can’t rely on ‘the internet’ to float great things to the top. Get out there and talk to people, send newsletters, post on social media, and incorporate the message into your live shows. Feel like you don’t have the right tools?
3 ways LIVAMP can help you get started right away:
- Building your investment story
- Building your newsletter messaging around your fundraise efforts
- Building your social media assets around your fundraise effort
4 ways we can take it even further
Feature you in our newsletter to a handpicked group of investors
Suggest your deal alongside those that are picking up steam (to be included in a “portfolio”, a tool we offer to investors
Help you find great partners (e.g. producers) for your project to make your story even more compelling
On occasion, co-invest
Makes sense? Ok, now go out and make it happen! And if we can help, we are just an click away. Visit livamp.com/funding to get going.