Invest in a Band Online

By Steve Gillman

If you have ever wanted to invest in a band, now is the time. It is easier than ever to do so thanks to the new websites that help raise money for musicians. Now for the bad news; While there are success stories from the perspective of the bands which use these platforms to raise the money they need to produce an album, there don't seem to be many about the investors making a good return.

In fact, many of the websites which do this make it clear that you should not expect to get rich investing in a band through them. The bands often offer only t-shirts, tickets to concerts, or other souvenirs as payment. Kickstarter, one of the largest creative funding websites (they help artists of all sorts, not just musicians), explicitly says on their site, "Kickstarter is a new form of commerce and patronage, not a place for investment or lending." Those using it to raise money are told, "You'll never give up ownership or pay back any funds raised on Kickstarter."

The way these platforms typically work, is that a band posts the details of a project, and a goal they need to meet to fund it. The project is most often getting an album produced, although it could be to buy new equipment or any related necessities. The funding goal is often under $10,000, but can be much higher. Supporters pledge from $25 on up to whatever amount they want to contribute. If the pledges add up to the goal by the deadline, the money is collected and the project is funded. If the goal is not met in time the project is canceled and no money changes hands. This is meant to prevent underfunding, which is likely to lead to a waste of money if a project can't be completed.

The websites based in Europe seem to be more about making money. Some make it clear that you will be making something for every album sold if you support a band. One of these sites (see the resources below) lays out the profit sharing as 10% to the seller of the album, 10% to the website owners, 40% to band, and 40% to the supporters (that's you, if you have at least $25 to invest).

Now, you will not likely make any money directly from these kinds of investments, so consider this a way to support bands you like or to encourage new artists. But who knows? It might be a way to meet people and eventually create your own project. Also, the site mentioned above has a unique feature which allows you to set up your own music store, so you can sell the albums you helped to support.

How Much Can You Make?

Most of the time nothing but a nice email from the band and maybe tickets to a show.

Ways to Make More | Related Opportunities | Tips

Use this as a learning experience if you want to be involved in the music industry.

Qualifications / Requirements

$25 or more to invest.

First Steps

Review the resources below and invest in a band.

Resources

https://www.sellaband.com - Free downloads, t-shirts, and free lunches are some of the goodies offered, and the site says, "artists might even let you get a cut of their revenues."

http://www.kickstarter.com - This platform is for supporting, but not investing in bands.

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