This is a guest post by Darren Gallop, CEO of Marcato Musician.
Few musicians have the luxury of independent wealth or the backing of a record label with enough cash to cover the cost of recording. Most musicians have to work really hard to raise cash in order to head into the studio. This is especially the case if it is your first recording.
Before you start raising money, you should have a budget for your recording and know exactly how much you need to raise.
Here are some creative ways to raise money that have worked for me and they can all work for you too if you invest the time and energy to do them properly.
Fan Funding and Donations Sites
There are many services dedicated to fan funding and donations. Some like Kickstarter.com even allow to tie your fan funding into a pre-sale campaign for your music which helps you build relationships with your fans and reach your goals faster.
This is one of the best ways you can fund a recording because the money you raise is revenue (rather than a debt you need to pay back), you have some record sales you can count on release day, and there is a potential to promote your campaign and create awareness for your band and recording with social media.
Once you finish your recording, you can then go back to your fans with a similar campaign to raise money for the release or for tour support.
Here are four fan funding sites that can help you raise money for your recording project and other band expenses:
Government Funding and Grants
Many parts of the world have government funding programs for music and the arts. Canada and many European countries have programs where you can receive a low or no interest loan or even a non-rapayble grant to record and promote your music.
Unfortunately most of the states in the USA lack programs of this nature. That said, do your research. Contact other musicians, music and artist organizations, arts councils and your local government to see if there are any programs that may be of help. If you are lucky enough to find a program in your area, contact the organization that administrates the program and find out about the application process.
Business and Non-Profit donations
You may be able to find a local business and or non-profit organization that will donate to your band or sponsor your recording. This be a significant tax write off for the business or organization in many parts of the world. In addition you can offer, for example, signed pre-release copies of the recording, their name and or logo on the CD and release posters and mention of the sponsor in your newsletter and on your website.
Gig Your Ass Off
If you can book shows and make a few bucks from them, play everywhere you can within a short distance of where you live. This was how I used to do it before I knew how to write business plans and grants and pitch to investors. We played for every coffee shop, bar, private party, wedding… anyone or anywhere that would give us any money to play. We even learned cover songs and played them 2 nights a week for cash.
The good thing about this is that on top of raising money and not having debt, the band and everyone in it improves their musicianship and showmanship and you add a few fans to your fanbase along the way.
Work Your Ass Off
When I was in my early 20′s I used to head up to northwestern Canada and plant trees all summer to save money for touring with my band in the winter. The work was complete hell but at 12 cents a tree I was planting about 2000 trees a day on average with 6 day work weeks for 3 months of the summer. We lived in the forest in tents so there was nowhere to spend our earnings. I met a bunch of musicians one summer who were doing the same thing, only instead of touring they were all saving their money to make a recording and dedicate the winter to their music.
The good thing about this method is that you do not have to pay the money back. The bad thing is that you will not be working on your career that much while working these kinds of shifts, though, 3 months goes by quickly…
Investors – Friends, Family, Angel Investors
Don’t be afraid to ask people for help. If you have friends or family with some cash they may be in a position to help you. The same may be the case for some of your early fans and local investors. You never know if you don’t ask.
The best situation is to get people to donate or pre-order your new material, but if you are not hitting your goals with that exclusively then taking on investment is another option. I have raised a lot of money for bands this way.
The most effective way to do this is to structure your band as a business and develop a basic term sheet that describes the investment – how much money you need and what it is for, how and when they are getting their money back, and what they stand to make in profit, over and above getting back their investment.
Here is an example of how I have done this in the past:
- You, the investor, give me $5000
- I give you 10 signed pre-release versions of the record upon completion
- Your name (or company name and logo) appear on the CD, on our website and cd release posters
- The first $5500 in physical and digital sales go to you, the investor
It is best to have at least a short business plan and a budget to present to potential investors that indicates your expenses, anticipated sales, project strategies and timeline. You would be surprised how many accountants, doctors, lawyers etc. that will feel pretty cool about being part of this sort of deal, especially if they are a fan. Also, in many parts of the world, investing in a business has some decent tax savings for people that make big bucks and are in high tax brackets.
This method requires you to pay money back much like a loan, however in this case if you don’t succeed in selling records and growing your band then you are not necessarily required to pay the investors back like you would with a bank loan.
Loans from Financial Institutions
Banks traditionally do not consider emerging artists as businesses so getting a business loan for recording your project is fairly unlikely. That said, if you have assets, a job or other forms of security this may be an option. You’ll also want to check with your local Chamber of Commerce or any other local organizations that are focused on economic development in your area. You may find a program that can help you with some form of loan or grant.
You will likely need to develop a business plan to support your loan request but there are many resources online that can help you with this if you find a program that is a fit.
NOTE: Owing money sucks! So, if you can make one of the other options above work for you that is probably a better option.
Remember that once you finish your recording you will need to release it and tour to support it. These things will also have a price tag attached to them and you need to budget for these well before you need them to happen. All of the above creative ways to raise money apply for funding these important projects too.
If you have any questions or examples of the creative ways to raise money that have worked for you please leave them in the comments section!
Darren Gallop is the CEO of Marcato Musician, owns a record label and is an artist manager and an artist himself. He has been coming up with creative ways to raise money for his bands’ recording and touring projects for more than 20 years.