The Ultimate Guide for Music Startup Fundraising
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
Techstars Music Program in Los Angeles
MusicTech Fund in San Francisco
SXSW Music Startup Spotlight in Austin
Midemlab Accelerator in Cannes
Project Music in Nashville
Amplify Sweden in Stockholm
Abbey Road Red in London
Atom Factory’s SMASHD Labs in Los Angeles (defunct)
Collider in Brisbane, Australia
The Faktory in Belgium
Real Industry (Stanford University)
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.
1,016 results on AngelList if you filter market by “music”
21,685 “music” investors listed overall on AngelList
Seth Goldstein (Splice investor; Crossfader and Turntable.fm Founder)
Rob Wiesenthal (Splice investor; COO of Warner Music Group)
Robert Downey Jr (Masterclass)
Niko Alm (RecordBird, Superfi)
startup300 Angel Network (RecordBird)
Todd James (Gigmor)
Also, here’s a good read from the founder of RecordBird about his fundraising learnings.
VCs by Portfolio
Creandum (Spotify, Epidemic Sound, Soundtrack Your Brand)
Walden Venture Capital (Pandora, SoundHound, BandPage)
Balderton Capital (ROLI
Focused on Europe
Panache Ventures (dotblockchain, Amp Me, Audible Reality)*
Khosla Ventures (PopGun)
First Mark Capital (ROLI)
Index Ventures (ROLI, SongKick, SoundCloud)
Horizons Ventures (ROLI)
BGF Ventures (ROLI)
Focused only on UK and Ireland
True Ventures (Splice, BandCamp)
First Round Capital (Splice, FanBridge)
Lerer Hippeau Ventures (Splice)
SV Angel (Splice)
Flybridge Capital Partners (Splice)
GV (Kobalt, United Masters)
Atlantic Labs (SoundCloud)
Focused on Europe
Bain Capital (lala)
Founders Fund (FanBridge, Spotify)
Foundry Group (Next Big Sound, TopSpin)
Ignition Partners (lala)
Lowercase Capital (FanBridge)
Mangrove Capital Partners (Rdio)
Focused on Greater Europe
Menlo Ventures (MOG)
NYC Seed (SeatGeek, Ticketfly)
Focused on NYC only
SoftTech (SongKick, Next Big Sound, FanBridge, 8 Tracks)
Now called Uncork Capital
The Accelerator Group (SongKick)
Union Square Ventures (last.fm, SoundCloud)
Upfront Ventures (STEM, Rival)
Social Leverage (Ticketfly)
Primary Venture Partners (Ticketfly)
Focused on NYC only
Contour Ventures (Ticketfly)
*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
Brian Walsh at Floodgate (ex VP Product Apple Music)
David Dufresne at Panache Ventures (ex Bandcamp, Bandzoogle)
Larry Marcus of Walden Ventures (past musician)
Howie Diamond of Ranch VC (professional drummer)
Abie Katz of August Capital
Virginie Berger of LeanSquare
Toni Schneider of True Ventures (Bandcamp)
David Pakman at Venrock (previously founder of a music startup)
Josh Felser at Freestyle (previously founder of a music startup)
Machine Shop Ventures (Linkin Park’s fund)
Elevation Partners (Bono)
Queensbridge Ventures (Nas)
Atom Factory by Troy Carter (Songza)
Andy Lefkarites at Spectrum Equity
Matt Sandler at Techstars Music
Bob Moczydlowsky at Techstars Music (ex-Head of Twitter Music)
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)
Nas (Mass Appeal, SeatGeek, Genius)
Justin Bieber (Spotify)
Dr. Dre (Beats)
Jay Z (Tidal)
Nicki Minaj (Music Messenger)
DJ Jazzy Jeff
50 Cent (SMS Audio)
Pusha T (Mass Appeal)
Queen Latifa (Indaba)
Scooter Braun (Songza, Splice)
Steve Angello (Splice)
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.
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).
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.
MusicTech Summit in San Francisco
Wallifornia MusicTech in Liege, Belgium
Music Alley list of musictech events
Symposium / Brilliant Minds in Stockholm
Music Tech Fest in Sweden
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.
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.
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.
Tristan Pollock is an American entrepreneur, investor and artist. The first album he purchased was Aquarium by Aqua. Subsequently and with all credit due, he went on to build and sell two startups, invest in over 200 startup ventures via 500 Startups, and get named Forbes 30 under 30. He’s currently traveling around the world with his soul partner in life, Danyelle, and sharing their stories via WeDidThat. You can say hello to him on Twitter or view all his writing at TristanToday.com.