How a Web3 musician just raised $1 million
+ 7 news stories this week
Gm music fans,
Web3 artist Daniel Allan just raised $1 million in a first-of-its kind ‘Web360’ deal.
Rather than the tradition record label route, Daniel is taking investor capital in exchange for 10% equity in the entire Daniel Allan brand.
It’s the startup model … for artists. And it values his career at ~$10 million.
An alternative to record labels?
The deal offers artists a new way to accelerate their career without signing suffocating label deals or chasing viral TikTok hits.
Importantly, it gives Daniel the creative freedom to build his career without giving up any rights to his music too early.
This sounds like a dream on paper, but obviously it comes with tradeoffs.
Although the terms of a traditional record deal are suffocating, it does come with the firepower of global distribution, marketing campaigns and a track record of success.
In contrast, the Web360 deal are more ‘artist friendly’, but the execution falls on Daniel and his team. And there is still pressure to perform.
The deal structure won’t work for every artist but it’s a viable alternative for fiercely entrepreneurial artists that already think of themselves as a CEO.
Jay Z, Rihanna and other icons aren’t just musicians, they’re business moguls. Why shouldn’t new artists position themselves as ‘startups’ in the same way?
How does the deal work?
The deal was led by Coop Records — a $10 million fund set up by Cooper Turley. His vision is to invest in artists at a broader scale, rather than the traditional model which focuses exclusively on music ‘catalog.’
“It’s taking all the income from all the places an artist touches: streaming, touring, NFT sales, merch, sync, publishing. Instead of it going directly to the labels pocket, we’re putting it in the LLC. They’re selling equity in small portions to investors.”
It doesn’t stop Daniel from signing a record deal in the future. Does it make major label negotiations more complicated? Probably. On the flip side, the deal (and ongoing NFT sales) might give him more leverage in those negotiations.
What’s the exit strategy?
Unlike a label deal, the money is not-recoupable so investors don’t get a return until they can ‘exit’ at a higher valuation in the future.
This is the crux of the deal for me … and the biggest unknown.
Not only are the investors betting on Daniel’s success, they’re also betting that there will be a market to exit into. There’s no artist stock market to ‘go public’ and little precedent for companies buying equity in an artist.
The door is perhaps open for the first ever artist token launch at scale.
6 more tories in Web3 Music this week
Artist grants 💸 - List3n DAO is launching a monthly series of artist grants. Holders will vote on which artist to support with a 1 ETH monthly grant. Mint pass launches on April 5th (444 at 0.08 ETH)
Own the Sound 🎧 - One of the biggest music collectors Brokeinvestr just launched Own the Sound: a new curation community to highlight the best music in Web3. Get the pass here.
HedsTAPE voting opens 🗳️ - HedsTape is one of the coolest Web3 music experiments. One producer curates a sample, then others can submit a track built around it. The community votes anonymously on their favourites and the top tracks get minted onchain as a mixtape. Voting for HedsTape 12 is open now.
Wes Ghost storms the Sound.xyz charts - The debut single from Wes Ghost racked up almost 2,400 mints this week, sending it straight to the 4th spot on Sound’s all-time mints chart. The campaign was powered by engaging with several other NFT communities.
A music visualizer 😮 - Wojciech Dobry built an insane music visualizer on the Sound.xyz API.
Seed Club $25 million venture DAO 🤝 - Seed Club has already incubated Web3 music projects like Songcamp, Glass, Bonfire, Metalabel. Now it’s launching an official $25 million venture arm.
Builders keep building 🚢
Sound.xyz shipped a new mobile navigation
OohLaLa launched a collector leaderboard - see the biggest music whales across Sound, Catalog, Lens, Zora and more.
Bonfire integrates Decent - Drag and drop website builder Bonfire can now host contracts from Decent.
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Disclaimers: we own several Daniel Allan NFTs.