All the people I’m tightest with have been through numerous struggles. Very few of us have been “given” anything in life. We either had to earn or take or ______ for all that we have.
Having lived a life of “going to get” the things & lifestyle & career I wanted – I’m amazed at how certain people can look at a life-changing opportunity without appreciating it.
Recently, the FOURTH rapper I know lost a 6-figure investor for being unappreciative. This is the fourth artist in the last 6-9 months I’ve watched squander a prime opportunity to make their dream of being a professional entertainer come true. In every situation, the rapper agreed with the investor spending 100s of thousands of dollars to market and promote the music – but DIDN’T feel that they should fairly split the potential money earned.
I’ve watched artists who’ve never ever ever made a penny from music seriously expect a 6 figure investor to take 5-15% of the income generated from his investment, while allowing the artist to keep 85-95% of the money made. Yes, I’ve seen investors ready to back an amateur, unknown artist to the tune of $400,000+ – but the artist wants the investor to expect a nickel back off of every dollar earned from his investment. (REALLY!!) Time & time again I’ve watched investors walk away from these deals shaking their heads at the demands of selfish artists.
The idea that these millionaire investors just fall out the sky is WRONG!!! There are 9,630,000 millionaires in the United States. Most are working people who’ve saved and invested their money into low-risk ventures. The investors who invest in high-risk businesses expect high returns on investment. It’s called high-risk, high-yield. NO intelligent investor is gonna commit 100s of thousands of dollars to a project without the guarantee of owning a fair percentage of the business. Generally “fair” means HALF or more.
If you’re an aspiring artist seeking investors – try watching the tv show “The Profit” to help you understand how these businessmen think.
Also take the time to assess the different possibilities for yourself as an artist, for example:
1) As an artist/owner, you’ve got to be realistic with yourself and accept the fact that if your career isn’t making money & you can’t afford to invest in yourself, then you own 100% of NOTHING! Being the CEO of zero isn’t gonna pay your bills or further your career. What good is 100% ownership if the income of the company is $0? Think about it.
2) In the alternative, if you’re dream is to “sign a record deal”, then realize that as a major label artist you DON’T OWN your masters; and only receive 10-15% of your music sales revenue & 50-65% of ALL other income (shows, merch, YouTube, publishing, etc) – you give up ownership & a major percentage in exchange for the major label budget that’s placed behind you. It can be a fair trade, but more times than not it’s way less than fair.
3) Lastly, as an indie artist who has a significant investor, you’re able to retain ownership and receive a FAIR percentage of ALL the money you make in your career.
How much do you think is fair to give a person willing to take you from $0 in show income to $30,000 a month ($5,000 a show x 6 shows a month)?? Is it worth 50% to take you from nothing to something?? 40% 60%??? You have the possibility of making $1,000 to $25,000 a show AFTER this investment. You’re making $0 a show now. What’s it worth for the possibility of earning real money off of your music??? Before you give a selfish answer, compare 0 to tens of thousands.
How much would you be willing to pay someone who got you 500 album downloads a month (500 x $12 a cd) or $6,000 a month – how would you split the money if someone took that risk & invested in your dream and ability?? 50% 60%?? How about if they got you 5,000 downloads?? 15,000?? 150,000???? What would be a fair split to an investor who pays for the marketing & promotion that brings you from 0 sales to hundreds, thousands, possibly hundreds of thousands of sales (not to mention millions)??? You’d give YMCMB or Interscope or Epic 88% AND ownership.
A gigantic thing to think about when seeking investors is to understand that in most endeavors, the investor’s priority is making their money back with a little extra ( Return on Investment). They do want you to succeed also, or else they wouldn’t invest – but as the “talent” you have to accept the fact that with these “money men” they’re about their business.
Most investors who put large amounts of money behind artists really believe in that artist’s “star potential”. They have a personal belief beyond business that you can be successful. BUT that doesn’t mean you should be unappreciative or try to get over just because someone believes in you. It also doesn’t mean that they’re gonna let you squander away their investment for pennies on the dollar on the backend.
Let’s try this metaphor: Let’s say that you have the talent of a world-class chef. You can prepare some of the best meals in the world …..but you’re homeless & jobless. One day you’re able to convince someone to help u get yourself together. This investor agrees to buy a restaurant equipped with full kitchen, promote this business on tv, radio & internet, and pay all the bills until the restaurant starts making money. Ask yourself at this point – what would be a fair split of the business income IF it started making money??
Investors are very rare. You have to treat them fairly or they will close their wallets and walk away. Very few of you will ever have the chance to work with someone willing to put hundreds of thousands behind your dreams. For those of you who are blessed with such an opportunity – don’t blow it. Be respectful. Be considerate. Be appreciative. It’s a chance to live your dreams. Be thankful!!
Tony Guidry is Senior Marketing Manager for A Scratchy Throat. A Scratchy Throat – the brainchild of music industry mainstay Wendy Day – provides professional social media marketing specifically designed for today’s aspiring artists. Tony is also owner of Precise Music and exclusive booking contact for Trouble (Duct Tape Ent/2 Tru Ent) andO.Z. Mr. 28 Grams (Fratt Boi Muzic Group). For digital marketing services or booking inquiries email: OGTonyG@gmail.com or Tony@aScratchyThroat.com