Angel Investor? What’s that?

Posted: August 3, 2013 in Artist Corner

If you need $50,000 + for your music project then the two best options you have in finding it are:

1) You can use fan-funded sites like SliceThePie, Pledge Music, Kickstarter etc or;

2) You can find a music loving  individual or two with bags of cash to invest in your project.

This post is going to look at option two, the wealthy individual, better known as an Angel Investor. In my opinion, these are the best people to back your project but they aren’t easy to find. They’re a less complicated funding option than venture capital because it’s just the individial as an investor who decides what and who he/she wants to invest in.  They are probably a better bet than a fan-funded site if you need to arrange the funding quickly. It can take a band months to raise the target sum on a crowdfunding platform like Pledge Music (many don’t get there at all). If you find an investor – particularly one in the music/film & entertainment arena – who digs your music then getting the investment could be a relatively easy and quick process. And don’t think that angel investors are just old men in grey suits. There are many hundreds in the internet space alone, under 30 years of age who would make terrific investors for music projects.

So what qualifies someone to be an angel investor? Well, they have to be what’s termed a “High-Net-Worth-Individual”  which means they must have  large personal financial holdings. Traditionally the term used was millionaire  but in recent years the term high net worth individual has become the descriptor of choice. A high net worth individual has financial assets worth more than US$1 million.

High net worth is used to describe financial assets, discounting real-estate. This makes a large difference in the number of people who may be classed as high net worth individuals: in 2003 there were nearly 2.2 million people in the United States who would be classified as having high net worth, while over 7.9 million people had assets including real estate worth in excess of a million dollars. In addition to the category of high net worth individuals (HNWIs), there is a second category, called ultra-high net worth individuals (UHNWIs), comprised of people with financial assets in excess of US$30 million. In the global population, this second category makes up approximately 1% of the total high net worth population.

Find an angel investor who digs your music and it could be the single most important discovery you’ll ever make in your career.

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