For independent hip hop artists, one of the constant pains of your career will be getting consistent cash flow. You’re not a major label artist so you won’t have the benefits of having a corporation backing you with their money and resources.
Getting money to invest in your craft is vital to a successful recording career, but that’s the tough part. How do you get enough money to invest in your music as well as support yourself?
For artist who are still living with their parents, that’s one thing, but for the ones who are also trying to support a family, it’s become a whole other thing. Most up-and-coming independent rappers won’t be making enough money from their music sales or touring to support themselves, especially early in their career.
You could get a job on the side, but that would take time away from your music, and you want to be dedicating as much time as possible to your craft as possible to launch your career.
Outside of getting a job, borrowing money off friends and family or getting crowdfunding for your music, you have the option of getting investors to finance your recording career.
The investment process
An investment in your music can definitely be helpful in paying for the multitude of things you need as an independent artist: studio time, graphic design, promoting and marketing your music, hiring a team, and plenty more.
The main downside is that you would effectively be in debt for the investment amount – it’s not a charity, investors expect to get a return on their money.
Of course, the investment process for an independent artist is like getting investment for any other business. So long as you can convince the person with the money you are worth the risk, they’ll invest – it’s that simple.
The best way to understand investment for an independent artist, though, is knowing what kind of funding you will need. You typically have three forms of investment to look out for:
- Private Equity – Private Equity, or PE, is usually made by private firms of people. The money is then used to fund your project at an agreed upon repayment rate and date.
- Venture Capital – Venture Capital, or VC, offers a different form of PE. This is usually designed for those with high potential for growth in the future, and usually is not one we would consider for musicians, especially independent artist.
- Angel Investment – Angel Investments, or AI, is the ideal selections. They are highly successful investors who seek returns through your hard work and success. They provide the financing you need in smaller volumes to the above, and usually it comes with less pressure and stress.
The decision, then, is what route to go down. Most choose to go down the final option, as it reduces the risk and the scale of investment. You’ll be working with someone, then, who actively believes in your project and your talents. In return, they are providing all the funding.
You just have to make sure that you can live up to your end of the bargain and produce the goods. Where, though, can you go to find the type of investment that you are looking/hoping for? Where will you be able to start finding investment in independent hip hop artists?
Where to find investors
The easiest step towards finding investors to fund your recording career is to look into local business communities. The likes of Small Business Development Centers can be an effective place to start to find investors in the music industry.
Look around for local business angels, too. They are usually more into communities like music and are less likely to see you as asking for a rigid business ideas. Going to a SBDC is likely to get you lots of investors who don’t know what you are offering or requesting.
Therefore, your investor has to be someone with ambition, with vision. Most people want to lend you money so they can make it back ASAP. With an angel you can usually find they see what you are aiming to do a little clearer than your average investor. This is also why working with angels can be so useful – they let you be creative, not rigid.
The only problem is that finding the investment more depends on where you live. It’s always best to start asking around the local music scene; it’s best to work with someone you can meet in a face-to-face encounter instead of having to try meet someone the other side of the planet from you.
Local investment is more likely to take off, too, as they can ask around. Now a business professional can ask around other artists and promoters to see if you are worth the investment in the first place. This obviously makes it much easier to get that investment.
However, investing in you is still a risk – what else can come into the mind of the investor?
Things to consider:
- Always make sure that before you ever meet with any investor, that you do your research both on them and your pitch.
- Looking around at your competition, the local scene, facts and figures of how effective your music can be and general stats on hip-hop in the local area should be vital for helping to swing that message.
- You will need to really work on your sales pitch, too. You are basically asking someone to give you money so you can make music, so you have to make it sound right.
- Work with a business planner or a mentor before you go and meet any investor or angel. It helps to know that what you are saying is going to sound good to an investor, not just yourself or other artists.
- You might be turning up with music and not a business proposal, but always have a plan. Look at competition and people you rate yourself on a level with, locally. Find out how they are doing and use success stories from around the local area as your main sticking point.
This will help you make it much clearer to any investor you aren’t chasing a pipe dream but actually pursuing a viable and sustainable recording career.