This story is part of Billboard’s third annual package spotlighting the trends defining the independent music business.
Despite approximately 60,000 songs being uploaded to Spotify every day, unsigned and independent artists have recently found themselves with more options than ever before when it comes to financing their careers — and using that cash flow to help stand out in a crowded space.
Among this fast-changing landscape, companies like Indify, beatBread and Cash App’s Cash App Studios have materialized, offering funding and advances to independent artists without asking for any ownership of intellectual property in return. Unlike a label services provider or distributor, these companies do not provide a staff of devoted professionals dedicated to your project; instead, their monetary investments are left open-ended, so that what you do with your funding is (mostly) up to you.
“We think that bundling services with financing can create friction,” says beatBread co-founder/CEO Peter Sinclair. “If artists can keep those conversations separate, they are often better served.”
The most hands-on of the three funders, Indify, likens itself to an angel investing platform. “Indify is really purposeful with choosing investors that can bring mentorship or artist development on top of just capital for early-stage artist careers,” says co-founder/CEO Shav Garg. With investors like Reddit founder Alexis Ohanian, among others, each independent artist who works with the company will have Indify play matchmaker for the act.“It’s about helping artists achieve their full potential when they are having their first moment,” says Garg. “The right partner, the right time and the right amount of capital [are] crucial.”
In an ideal scenario, investments will be recouped (and then some), with investors earning a percentage of the artist’s streaming royalties. Though not every independent artist will qualify for funding, the startup uses data-driven insights to find artists gaining traction organically, but could use an extra monetary push.
So far, according to Connor Lawrence, co-founder and chief marketing officer at Indify, the “majority of deals are profitable.” Each agreement varies, but Indify has a few requirements: Artists keep their ownership of masters, investors cannot earn over 50% of the artist’s streaming profits post-recoupment and the artist must retain creative control.
That last point is paramount for beatBread, an advanced funding-only option for unsigned talent. “We want you to have the freedom to choose your own team,” says Sinclair. A more open platform than Indify, beatBread is typically willing to fund artists with over 10,000 monthly listeners on Spotify, and artists design their own deals based on parameters like term length, capital needed and share of the catalog and/or future release royalties from streaming. Then, the proposed deal — which can range from $1,000 to $1 million — is reviewed by the beatBread team and verified.“We have 100% success in wiring money into artists’ accounts, and whatever you do with that money is your business,” says Sinclair. But in their experience, most artists put the advance toward paying fees for collaborators, creating music videos and funding digital marketing campaigns.
Cash App, the popular finance app, is a rarity in this space: With its new initiative Cash App Studios, the company gives out monetary gifts to artists in music, fashion and entertainment without asking for anything in return. According to Victoria Monét, an independent artist and songwriter for Ariana Grande, receiving funding from the company has been the “most noninvasive, pro-creative and supportive partner I’ve ever worked with.” Unlike the other startups, Cash App Studios has the advantage of ceding money freely as a form of goodwill — and good PR — to musicians.
And while these companies see themselves as a viable new option for independent artists, the ultimate goal is to empower DIY acts to make their own choices when the time is right. “We don’t see ourselves as replacing labels,” says Matthew Tilley, head of artist and industry relations for beatBread. “We are just giving them options.”