Should You Look for an Investor?
Monday August 25, 2008
If you've got a music related business, I'm willing to bet you've devoted some time to daydreaming about a benevolent investor strolling up to you one day, cash in hand, ready to fund all of your ideas. Believe me, I get that, but investors are not always all they're cracked up to be in the light of day - or at the very least, they're not for everyone, at every stage.
An investor is not like a bank. They're willing to take a high risk gamble on your business, but they want to feel pretty sure that they're not going to lose and that they're going to have the power to guide the business to make that happen. That can have some pretty serious ramifications for you, especially in a creative industry. Now, keep in mind that the deals people make with investors can take all sorts of different forms, but if you're not careful when you're looking for music business investors, you could end up facing the prospect of putting out music you hate because your investor thinks it will sell a lot (or even releasing the albums of your investor's marginally talented child/spouse/sibling/BFF - I've heard that one more than once). The perfect marriage of cash and creative "vision," for lack of a better word, is not always easy to find, and a divorce from an investor could get pretty ugly. There are great investors out there who can help you achieve a lot, but you need to proceed with caution - learn what to consider before you look for an investor.
An investor is not like a bank. They're willing to take a high risk gamble on your business, but they want to feel pretty sure that they're not going to lose and that they're going to have the power to guide the business to make that happen. That can have some pretty serious ramifications for you, especially in a creative industry. Now, keep in mind that the deals people make with investors can take all sorts of different forms, but if you're not careful when you're looking for music business investors, you could end up facing the prospect of putting out music you hate because your investor thinks it will sell a lot (or even releasing the albums of your investor's marginally talented child/spouse/sibling/BFF - I've heard that one more than once). The perfect marriage of cash and creative "vision," for lack of a better word, is not always easy to find, and a divorce from an investor could get pretty ugly. There are great investors out there who can help you achieve a lot, but you need to proceed with caution - learn what to consider before you look for an investor.
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