2023-05-27 22:19:05
Marillion must be one of the few great musical bands that will not set foot in Spain in the 2023 concert season. Progressive rock led by Steve Hogarth it will be heard live in the UK, Germany and the Netherlands. Aside from their music, Marillion will go down in history by another very different element: the finances.
In 1997 they could have decided to stay in their period of musical depression or to revive. They decided the latter. For that it was necessary to return to the United States, where they had a spirited group of fans. They only needed $65,000 to be able to jump over the pond and organize the tour. They didn’t have them. To achieve them, they created the first collective financing system that was later baptized as crowdfunding. They were convinced by one of their staunchest fans, Jeffrey Pelletier, against the initial skepticism of the musicians. In that modern crowdfunding, they asked their fans to finance their tour through the web. In return they were given a special signed record.
even the most unusual
Since then, crowdfunding has become one of the most used modern tools to finance even the most unusual. In return, the investor, whether small or medium, may not receive anything, shares, debt commitment or be paid in kind. The crowdfunding platforms are multiple and the freedom of choice is total. An example is Kickstarter. Announces that through it they have already financed 239,000 projects worth $7.3 billion. From artistic projects to NGOs.
If you have an idea that you consider great and you need money to carry it out, today you have many and varied formulas. In the past, before the birth of modern capitalism, the financing of projects could come from a patron -from a monarch to the Church-, sometimes altruistically; of the banks, which began to offer loans in different modalities; of families and friends, who could give capital in exchange for being shareholders or lending money. Trusting only friends and family had a risk if the project failed: the enmity forever with someone very close. There is a young American businessman who got this system right in 1903: Henry Ford. Thanks to the money that allowed him to increase capital from 11 friends / acquaintances, he managed to promote the manufacture of the first popular car.
It was after World War II that the French-American Georges Doriot led the creation of the first venture capital firm in history, American Research and Development, in Boston. Its objective was to found a financing system other than banking, which had shown its weaknesses in the stock market crash of 1929. Newly created companies would have the opportunity to request private money in the form of capital or debt from individuals grouped through a fund . He officially started the fund raising business.
Large companies and entrepreneurs lead the financing of new initiatives by contributing money and advice
Funds that invest in companies of all kinds and with very different formulas have become part of the business landscape. From incubators to finance the most promising start-ups to accelerators, business finance terminology has spawned all sorts of tribes. Even financial institutions decided to create their own venture funds as a complement to their loans. Large companies and businessmen, from Telefónica with Wind until Juan Roig with Lanzadera, they have their specific funds. Private business schools, public universities, chambers of commerce, business circles, employers… have been creating fund groups looking for investors in the world of business angels, family offices and patrons of all colors.
two functions
the entrepreneur must decide two functions. The first: what is the financial structure that best suits your needs. Betting on expanding the social base with shareholders is not the same as deciding to borrow the money, generally ensuring high returns due to the greater risk. The second: what is the level of involvement in the management of the partner or provider. Should you be very active or be a simple observer and occasional opinionator?
Trust and information transparency is key to determining the degree of relationship. Having a thousand fans give you 60 euros each to carry out a crowdfunding project is not the same as passing the monthly duties to a venture fund or a business angel who may end up being more of a demon than an angel if the numbers do not come out .
Is there capacity to innovate in the world of financing? For sure yes. If not, ask Marillion and the doors they opened.
#day #rock #band #crowdfunded