Jotown... Investors or Sponsors for writers/artists

[LiveMusic]

I had a previous thread entitled something like... "Anyone know ANYthing about sponsors/investors for writers/artists?" Thanks to the legitimate responses. Jotown said... [quote]I have had to find sposors/investors for every project I have ever done, and that includes record labels. It is just like any other business. You have to be able to convey your enthusiasm to potential helpers. Don't lie to them. Tell them it's a crap shoot, but if you can communicate your passion and belief to the right person, anything can happen. You could also sell stock. A dollar a share in 100 ($100.00) bundles. It's easier to get 100 people to give you a hundred bucks, than it is to get one person to give you ten grand. As a friend of mine, renowned jazz trumpeter Marcus Belgrave always told me: " It's the music business, and business is the bigger word." [/quote]This is very close to what I am talking about. Private "investors." Anyone have any idea how this would be drawn up? I mean, what do they get in return? Say you're gonna raise $10,000 or whatever to do some demos. What should the investors get? Thanks for any help.

[Jotown]

Find an attorney whose specialty is setting up corporations. It's just like any other business investment. Some folks are content with a dividend on their stock. Others expect to be paid back in full with interest. I think the main thing is you have to get them excited about what you are doing. I once had a guy give me 30k in a shoebox, as an investment in my production company. I told him, and his father that it was a gamble at best. They believed in me, and my music, and they wanted to help me realize my dreams. I once had an owner of a car dealership get me a low interest loan from their financing company which went towards my first ADAT's. Again, be honest and passionate. Whether silicone valley start-up company, or financing your dream, people can feel enthusiasm. And more often than not, your passion will be the deciding factor. For them, and you. Good luck.

[LiveMusic]

I don't have a problem finding enthusiasm. I've done a LOT of oil/gas exploration deals years ago (that's what I used to do) but I am clueless as to how to do anything with music. If it's like oil/gas, it's whatever you can dream up and pull off. Except there are some industry "standard" provisions. Thanks.

[Jotown]

[quote]If it's like oil/gas, it's whatever you can dream up and pull off. Except there are some industry "standard" provisions. [/quote]It's exaclty like that, except in the music biz, there are no standards, just listen to the radio. :D

[Brittanylips]

This is a great question. Adding to my response in the other thread: Investors would either be active or passive. A producer, record label, or entertainment lawyer has an interest in your product, would take an active roll in its development, and could be paid for their work (from future earnings). For passive investors, however, their expectation of profit would need to be tempered by an expectation of loss. This is why: If you can determine how much money you need, and how much you might reasonably make, you can divide the result by a certain number of “shares” and issue stock. However, the statistical chance of failure is extremely high. Indeed, labels use the rate of overall failure to justify harsh contracts with individual artists – when an artist does succeed, their profits offset the cost of all the others who failed (which is why a successful artist doesn’t get their “fair share”). As a single person, there is no hedging of bets. Your investors are putting all their eggs in one basket, with overwhelming odds that all the eggs will break. Therefore, you would be compelled to offer an astronomical rate of return given the astronomical risk, which would make it impossible for you to enjoy potential success, should you actually succeed. You would therefore need to ask potential investors to cushion their risk with love, and understand that their investment is part charitable contribution. Speaking of charitable contribution, I wouldn’t be so quick to dismiss philanthropy from foundations, corporations and individuals. This may be less messy, and easier to obtain than you think. Finally, I would underscore what Jotown said. Most people are happy to support talent and passion when they see it, often in unpredictable ways, and sometimes with cold, hard, cash. -Peace, Love, and Brittanylips