Sellaband = innovative business model whereby fans can invest in their favourite band

Status Report 2007

"Fans have invested over USD 1,000,000 in the bands they believe in. The first band to raise USD 50,000 was Nemesea, which did so in 83 days. Six other bands have also raised 50K. Three of them—Nemesea, Cubworld and Second Person—have produced and launched their first album, and the other four are hard at work in the recording studio. In total, 4,806 artists signed up to SellaBand.

As pointed out by SellaBand's Music Director, Dagmar Heijmans: "Twelve months ago we didn't know if it would work. Well, we've proven that. People are willing to pay USD 10 (or more) to be part of an artist's success." For the coming year, SellaBand aims to make it easier for anyone to operate like a record executive, by giving them the tools to scout talent, track the recording process and promote 'the heck out of the artist' once an album has been released." (http://www.springwise.com/entertainment/bands_funded_by_their_fans_upd_1/)

Discussion

From Johan Vosmeijer, Managing Director SellaBand:

1. The money Believers put into their artists of choice is kept on a so called escrow-account. In case you don’t know what that means, there is a legally binding rule that we, as owners of the escrow account, cannot touch that money until a band has raised $50.000. In other words, we cannot turn this account into an investment fund, nor can we buy fancy cars from it or book nice trips to the Bahama’s. Yes, the interest will go to us, but that money will go straight back into the development of the website and the creation of an artist incentive program (useful tools for bands on their way to 50k).

2. Almost no band will ever raise 50k? Barely one month after our launch, one band is already over 10.000 (September 26th) in budget an counting. The big publicity wave on SellaBand is yet to come, but already 2,000 people have registered as Believers, and close to 3,500 Parts have been sold. Based on these figures we are very optimistic that in the (near) future, quite a few artists will be able to raise the money that is required to record with us.

3. Bands have free choice of producers and studio’s, as long as it fits into the budget. The only person that is ‘mandatory’ is the A&R person. He or she will be assigned by us and will then guide the artist through the recording budget. All of the money will be used for production, manufacturing and distribution, bands have the option to see the bills if they want to.