This post is a response to this very helpful and clear Linkedin post from Rob McDonald on the subject of pitfalls in choosing investors. This is my experience with finding I needed investors and the reality of talking with them, as well as how that has impacted business decisions in the industry I’m serving.
Why are millions more people around the world making more music product than ever, yet making less money?
I will tell you: Lack of a controlling industry standard for the intake and validation of the ownership chain of evidence before a song is released, and the sharing of that evidence chain between owners and their customers. In the music business, too many foxes are minding the hen house.
This picture below of performing rights organization SESAC’s royalty disclaimer (ASCAP and BMI have similar statements) points out how widespread the problem is. If even the very organizations that accurately service the owners of songs — that is the songwriters and publishers — cannot keep accurate records because there are “too many variables”, then the picture at the top of this post makes perfect sense, though it is sad.
In any case, after studying the situation as someone new to the industry, I came up with a solution to that problem. Of course, I saw the solution was bigger than my wallet could fund, so what did I do?
Why, I went looking for investors. Doesn’t everyone?
Thank goodness I was not in a hurry to get my picture on the front of Inc. andFast Company because otherwise I could have fallen for way too many sketchy offers for funding.
As an inventor with a solution that will benefit an entire worldwide industry, I am passionate about the audience I serve and won’t tell them I’ll help them only to sell out to an investor who boils everything down to a perfunctory quarterly earnings goal.
Songwriters are financially beaten up every day. And now that songwriters are also serving as their own label and publisher — and even as the artist, their opportunities for being stolen from have increased exponentially.
So, when I went looking for funding for my third-party intake and validation system, I filtered every discussion through the prism of:
Will this investor help solve this problem for the songwriter?
More often than not my reply is, “Thank you, Potential Investor, but…NEXT!”
I ended up spending my own money to build something that brought to market the key solution piece to the entire industry. Yes, I said it, and I shall not apologize or minimize that statement:
The. Key. Piece.
But my solution is bigger than my wallet can roll out. I know I need investors.(You can see what I’ve started here.)
Still, thanks to articles such as Rob McDonald’s, I have confirmation that the questions I ask and the proof I require of investors is not off the mark at all. And that it is absolutely the right thing to do to weigh my desire to protect long-term earning potential and the integrity of the solution against a short-term benefit. Therefore, my investor will:
Be unafraid of powerful interests.
Have a strong backbone.
Laugh in the face of naysayers.
Have strong personal integrity.
Desire to change the world for the better by protecting the masses with less power and resources.
Understand quantum physics theory: The Force of Nothing is strong.