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The Ultimate Guide for Music Startup Fundraising

Tristan Pollock

It’s a no-brainer that the music scene changes rapidly, sounds and musicians come and go like the winds of trendification. But what about the technology driving them?

T-Pain’s autotune came and left the production process. Electronic dance music hit the scene hard and created a new cash cow genre. Now AI is making it’s own endless beautiful music for Google. Even some are saying Blockchain may be the new regulatory body for artists.

A lot has been slow to change in music, but inevitably it will all change. Take the music streaming revenue growth in 2017 indicating that the music industry as a whole is becoming profitable again. Just like streaming, most of the change will be coming from the bottom up, new ideas from entrepreneurs will be created and adopted. So who’s funding these next ideas beyond generalized programs or funds? Let’s take a look.

Accelerators and Incubators

Bonus: Accelerators for Musicians

Of course, most of the thousands of accelerators or incubators in the world would accept a strong musical technology idea or team or full-fledged business if it made sense, so looking at where you fit is important beyond just “musictech.” I’d suggest looking at your local market. For example, Detroit venture firms and programs which like to invest in Detroit companies.

You can also look at your own uniqueness. Maybe a company you used to work for or your alma mater invests or runs a program to support their people. Check it out. You might even have a demographic advantage. Consider all avenues, because, as you already know, raising startup funding, especially in musictech, is hard.

Angel Investors

Also, here’s a good read from the founder of RecordBird about his fundraising learnings.

VCs by Portfolio

*Panache has a Canada focus, which is great for Canadians or founders operating in Canada.

As you fundraise, you’ll find some geographic-focused firms that could help you get a leg up if you are in their geo or related to their geo.

VCs by Investor Background

Although common sense may ring that an investor with a music background may be a great fit to invest, you must also consider that they have seen the complexity of the industry and are more skeptical than someone who likes music but doesn’t know the industry. This happens in all industries. I ran a marketplace business and now I am much harder on marketplace founders if they aren’t considering the difficulties I’ve seen.

Musicians investing in Startups

  • Jerry Harrison of Talking Heads (Garageband)

  • Gareth Emery (Choon)

  • Tristan Gartner

  • Usher

  • David Guetta

  • Will.i.am

  • Nas (Mass Appeal, SeatGeek, Genius)

  • Justin Bieber (Spotify)

  • Beyoncé

  • Elton John

  • Snoop Dogg

  • Dr. Dre (Beats)

  • Jay Z (Tidal)

  • Will Smith

  • Nicki Minaj (Music Messenger)

  • DJ Jazzy Jeff

  • 50 Cent (SMS Audio)

  • Pusha T (Mass Appeal)

  • Russell Simmons

  • Ludacris

  • Chamillionaire

  • Diddy

  • M.C. Hammer

  • T.I.

  • Drake

  • Queen Latifa (Indaba)

  • Bono (Sonos)

  • Justin Timberlake

  • Scooter Braun (Songza, Splice)

  • Tiesto (Splice)

  • Steve Angello (Splice)

  • Jared Leto

  • Arabian Prince of NWA

There are also other instances of artists taking interest in accelerator type platforms, such as Linkin Park with Machine Shop, whom I mentioned above.

Crowdfunding for Equity

There are many other platforms here and I’d love to hear success stories in the comments.

Traditional Crowdfunding

Strategics

  • Live Nation

  • Universal Music Group

    • The UMG Accelerator Network is currently partnered with the Axel Springer/Porsche Accelerator Berlin), NYC MediaLab (New York), Sparklabs (Seoul and Taipei), LeanSquare (Belgium), and China Accelerator (Shanghai).

  • Citi

  • Microsoft

  • Sony

  • Evolution Media

  • Ableton

  • Native

  • Crush Management

Strategics, often times corporations looking to get a leg up with external innovation, will make an investment as a means to give themselves a strategic advantage. That means the company they are investing in is closely related to something the strategic is trying to accomplish. Sometimes this starts out as a partnership and turns into an investment later on.

Events

Obviously, just like accelerator programs, musictech events alone aren’t the only events you want to be at. Here’s a good list from MusicTech Germany of music and general startup industry events for 2018. You could also look at Startup Calendar.

Networks

That’s it. Now it’s time to get out there and do it. I want to continue seeing weird and awesome innovation in the industry. There are big opportunities in a few categories of musictech, including in the licensing, rights and royalties management, direct to consumer channels from the artist, and payment models. Let’s make some noise.

*Billboard 2017

Thank you to Shawn Dailey, Brett Goldstein, Clark Dinnison, David Baird, Brad Dollar, Ryan Walsh, Jonas Norberg, David Dufresne, Abie Katz, Brian Canty, Mawuli Ladzekpo, Martin Willers, Alex Nordenson, and everyone else who inspired this article.