Charles McEnerney, Musicians for Music 2.0 Venture Fund : A fund for music startups

6th Mar 2011
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The ideas behind the Musicians for Music 2.0 Venture Fund started with Charles McEnerney, a music fan who has worked in entertainment marketing for more than twenty years.

Starting out as a music fan when he was 6, then as a musician, and ultimately as a marketer who has worked in the entertainment and media industries for more than 20 years, (including HBO, Fast Company and MovieMaker magazines, Seattle International Film Festival, WGBH Boston, ArtsBoston, and OurStage.com).

Charles spoke to us about his unique fund for music startups.

How can people use music 2.0?

The Musicians for Music 2.0 Venture Fund would be less transparent for the average music fan, but would ultimately be behind the scenes helping out music discovery web sites and benefiting musicians who gain exposure through these sites.

It will benefit music fans, though, by having the best ideas for future music discovery sites have a chance to survive and thrive.

What was the idea behind this?

As an avid music fan and producing Well-Rounded Radio, I was following the power shift from the major labels and mainstream media outlets to independent artists and web-based outlets and technologies that were distributing new music and becoming tastemakers.

I was going to a lot of start-up events in Boston, Massachusetts and learning more about how they receive funding. In the software, clean tech, or biotech worlds, there are a variety of funds that are available to help new ideas get off the ground or grow.

I had also been watching how the news industry was changing in the U.S. and I was sort of surprised that there were so few organizations that were funding new, web or mobile news organizations. We have The Knight Foundation ( http://www.knightfoundation.org ), but there are not many places that news-gathering organizations can go to for funding if they were starting up a local, regional, or national news web site, which is clearly the future. I thought, 'With all the people in the news business in the US who have made millions of dollars from TV or print journalism, are there really none that will step up and help figure out the future of news gathering as part of their legacy, philanthropic or otherwise?'

If you look back at certain periods of US history, there were investments made by the wealthy that benefited many others. People like Andrew Carnegie, Henry Ford, The Rockefellers, and J. Paul Getty made investments that changed the way we now live in America. It feels like we need investments of a more digital kind now."

Of course, as a passionate music fan, I recognized that there is also no place for music discovery start-ups to go for funding. I know others who produce podcasts, plus dozens of people who write blogs or manage mp3 blogs, developers working on recommendation engines or mobile apps, and a myriad of other amazing ideas. These are all great new ideas for others to discover music, but they fall between the cracks of traditional funding channels: their financial needs are too small for venture capitalists or most angel investors. They might be for-profit, so are not relevant to foundations or many federal funds.

Essentially, there is no place for them to turn to, but they are all creating and producing editorial and technology that will help music fans to discover music. Many of these are replacing the taste makers of the past, be it record store clerks, radio DJs, and print music critics. With very low overhead, they could easily turn their "labors of love" into jobs, if they had the time to focus on it and benefit from being part of a larger organization.

Your business model

The Musicians for Music 2.0 Venture Fund is looking for small investments from a dozen music stars who would help create a fund for these kinds of music start ups.

It is, in a nutshell, seed money from musicians who have been successful from the last fifty years and help foster a better ecosystem so that musicians can make a living for the next fifty years. The fund would seek a new group of investors each year and would help 8-10 new projects launch, as well as serve as a business strategizing, an incubator, and an advertising network where they would receive the revenue.

The music discovery projects that are funded would see revenue from advertising running on their site or mobile app, could seek donations from their community, and sell merchandise. In the pre-web days, any media outlet would be a multi-million dollar venture, but nowadays, it can be done with a laptop and an Internet connection, so one of our investments with a one-person organization might only need to make 80-100K per year in order to be profitable.

Future plans?

The Musicians for Music 2.0 Venture Fund would be self-sustaining, but I recognize that we need seed capital at first.

Our hope is that from investments of 100K from each successful musician, we'll fill a need in the funding spectrum and help ideas that might not make progress otherwise.

Among the first group of artists we have asked to participate include David Bowie, T-Bone Burnett, David Byrne, Bob Dylan, Phillip Glass, Jay-Z, Madonna, Bob Marley's Estate, Wynton Marsalis, Yo Yo Ma, Dave Mathews, Jessye Norman, Pearl Jam, Tom Petty, Robert Plant and Jimmy Page, Prince, Bonnie Raitt, R.E.M., Rick Rubin, Russell Simmons, Sonic Youth, Bruce Springsteen, Sting, U2, Paul Van Dyk, Wilco, Brian Wilson, Neil Young, and John Williams."

Each year we would secure a new group of investors and invest money in a new group of music discovery projects, growing the community of businesses and helping each other to become profitable businesses. For the musicians who invest, it's a simple way for them to give back to the art form that has given them so much—and to the musicians of the future. It's also a terrific public relations opportunity, where each year this group of stars would be identified as generous investors who are partnering with their peers to make a real difference.

Ultimately, this is an idea that can change the way new music businesses launch and grow. There will be a place for great ideas to find funding, instead of languishing in obscurity or trying to find funding through channels that are not open to them.

Our first, and perhaps biggest challenge, is securing that first generous investor who understand how much of a difference this can make now and long into the future.

For more information, visit http://musiciansformusic2.com , like on Facebook ( http://www.facebook.com/musiciansformusic2 ) or follow on Twitter ( http://twitter.com/musicians4music ).

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