Starting your own band can be quite a challenge. It will require a lot of money in order for good promotions and equipment. Money will be needed to pay for services that can help you and your band. But the question is where to get the money to sustain your band. Here are a few sources of funds that can help you to deal with that problem.
The first source of funds you can tap is your own. Investing your own money in your music can show potential investors that you’re serious in the industry. Like any other type of business, you need to put you own money on the line, too.
There aren’t a lot of people in the music that can easily secure debt finance from banks and other debt financers. The reason behind this is that there is no certainty when it comes to the growth and success of an artist or band. Although it can happen, not many of these banks would easily provide debt financing, especially when a band is just starting.
You can get funds from family and friends, too. You can find people you know on a personal level to finance your band. Although informal, these people may provide finance without the desire to hold equity in the business. They can be very useful for new bands, but the challenge can be in the form of convincing your family and friends that you are a good investment.
When you start out, it is easiest to borrow small and get money for new instruments, outfits and basic promotions. Many people turn to personal loans to obtain these small amounts $200 – $1000. source:
Internal capital networks are groups that are willing to help other people who share the same culture. There are new bands that have been financed well enough to make their albums. These groups would also provide funds as long as the group or the community would benefit from the album.
Funds can also come from angel financers. These are individuals with a high net worth who are interested in helping entrepreneurs. They usually will take an interest on how your band is run and will require a level of equity of the business for their efforts and contributions. An example of an angel financer is a record company. Angel financers generally expect a return of investment usually 3-5 times greater within 2-5 years. They can be very hard to find and will require a lot of convincing before they can fund a new band.
Like any other type of business, you will need to put out a lot of money to survive. If you don’t have it, then you can seek assistance from other parties. You will need to convince them that you are a good bet, a good investment, before they provide you with the necessary funds you need.
Insurance. It might sound funny. But even musicians need insurance for general risks and bumps and bruises. Rather than go on about it here I found some interesting articles on a few of these products types