Before You Work with a Music Industry Investor

Posted: July 29, 2013 in Artist Corner

By , Guide

When you’re struggling to pay the bills at your music related business, the idea of a music business angel or other investor swooping in with arms full of cash sounds like a dream come true. That dream could turn into a nightmare really quickly if you don’t proceed with caution, however. Learn how to make sure your music business angel investor stays an angel and how to make the deal beneficial to you both.

Know What You Need

The best and worst thing the music biz has going for it is that it often operates in a more relaxed way than other industries. The bad part of that is that many people who enter the music industry sort of glide through making it up as they go along, and when you’re trying to get investment, that just won’t fly. If you think your business needs money, then make sure you know why, how much, and how much you think you can make. Not only will thinking in this way help you focus your thoughts and show an investor you’re serious, it also sends the message that you’re prepared to stay in control of your business.

Understand Investors and Music Business Angels

A bank may be willing to make you a loan in return for some modest rate of interest. An investor/music business angel wants more. They’re making a high risk investment in your business with hope that the gamble will pay off, and they’ll want to do everything possible to make sure they don’t lose their money. That means they may want a controlling stake in your business, and they may want to be involved your business decisions. A music business angel may be more likely to “get it” since they have industry experience, other investors, well, your creative vision is not their priority. They want to make money.

Your Vision versus Their Money – How Will You Compromise?

The idea of giving up some control in your music business may send shivers up your spine, and rightly so. But – the right investor may actually bring some valuable business know-how to the table – that is especially the case if your investor made their money in the music industry. The best way to walk this line is to be very clear from the outset about the compromises you’re willing to make versus the amount of input your investor wants to have. Know up front who holds the reigns creatively, lest you find yourself working with music you don’t like (or releasing your investor’s daughter’s album).

Exhaust Other Funding Sources

Sometimes, the perfect music industry investor, who can provide you with both capital and good advice about achieving your goals comes along – someone who you mesh with well creatively who can give you the tools to accomplish what you set out to do. If you find it – grab it. But in most cases, it is almost always preferable to seek out other sources of funding first.

Of course, that doesn’t mean you seek other funding because an investor will want you to spend your money wisely – you should never take money from any source without a clear idea of what you need it for, and how you will pay it back, if applicable.


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