Music Investors! by Jerry W. Henry
I know two singer/songwriters types that have been together for 7 years now. They are good at what they do and had always seemed to be happy doing what they do. I last saw them about a year and a half ago. They had taken on a one-man- investor/manager/booker that had given them some money and was booking them on a cross-country tour. After the glitter worn off, they found themselves controlled by this one-man-investor/manager/booker. They now are in a situation where their percentage of what they make is not enough to pay back the loan he gave them.
They didn’t read the fine print. They knew that they were giving up a percentage of their business. They also realized they were also giving up some their autonomy. But they didn’t realize how much.
Before you get into a similar situation make sure you are clear on the following points before you sign.
To what extent will the investor be in your business decisions?
Do your business philosophies agree?
Is the money an investment or a loan?
My best advice would be to hire a music attorney.
Another consideration is experience in the music business. Dealing with a professional with a long history in the music business could be great for you. Working with an investor that only wants to invest and sit back and wait until you “make it” would be a Godsend. An investor that wants to be involved can be good or bad. Just make sure that you understand his involvement.
This is a new day in music. You are in control.