Memphis-based Connect Music Group, a distribution and publishing administration services startup, has launched a $10 million fund for independent artists.
The startup, founded by CEO George Monger, says that its new fund, backed by investment firm Preserver Partners, will see selected indie artists receive financial support as well a being assigned “a team, infrastructure, and resources comparable to major labels while maintaining ownership of their music”.
Preserver, also based in Memphis, is headed by President and Chief Investment Officer Floyd Tyler, and has nearly $230 million in assets under management.
Connect Music says that its new fund is designed “to foster economic empowerment through ownership of intellectual property rights in visual, musical, and sound recording copyrights”.
Founder and CEO George Monger has also confirmed that the company plans to increase the value of the fund in future.
“Our fund with Preserver has significant scale,” he told MBW. “We have also been approached by larger funds who have interest in the space. We are committed to Preserver as a long-term partner that will be instrumental in our growth.”
Headquartered in a $2.5 million downtown property in Memphis, Connect Music Group was founded by Monger in August 2020.
Here, George Monger tells MBW why Connect Music Group launched the $10 million fund, how the firm plans to select participating artists, and what his predictions are for the future of the indie artist sector…
Why did you decide to establish this fund at this time?
Black creatives have been at the epicenter of American music, but many artists have struggled to receive the significant income from ownership.
Larger multinational music rights organizations are starting to realize this and are trying to right the wrongs that have disproportionately affected Black creators. Black Music accounts for nearly 1/3 of all streaming consumption.
Tell us about your partner Preserver Partner firm. How did you start working together?
We are thrilled about the collaboration with Preserver Partners. Through our efforts we have seen that sound investment and industry expertise around a music product – especially in hip-hop and R&B provides endless opportunities for creators and the independent music sector.
Floyd Tyler, the Founder and Chief Investment Officer of Preserver Partners team and his team approached us in December 2020 about creating a fund.
“The creative music class is emerging as a significant economic force in the southeastern economy.”
As a Black-owned asset management firm that has nearly $230 million under their management, Floyd and the Preserver Partners team have a strong command of building sustainable models for investment.
Over 18 months, we worked very closely with the Preserver Partners team to launch our funding model. During this time, we were able to engage Michelman and Robinson, [one] of the largest firms at the intersection of music and finance to solidify the fund.
The creative music class is emerging as a significant economic force in the southeastern economy. Independent Hip-Hop and R&B artists from the southeast are at the top of the industry, dominating music and culture across the county and beyond. We (Connect Music ) help artists recognize their vision.
How will you select which artists to work with?
Connect Music relies on hundreds of data points in our modeling that includes a three-phase approach to each deal. Team, Talent, and Total consumption are critical to our process. Our modeling is dynamic and captures specific data beyond streaming metrics.
Will you pay artists’ advances?
The fund is designed to ensure artists/rights holders have capital to maximize the execution of their marketing and branding strategies. This means taking a narrow view on advances. We believe the exchange of dollars today for the loss of music rights ownership isn’t the best interest of the clients that we serve.
“The artist receives a team, infrastructure, and resources comparable to major labels” – Could you elaborate on this?
Connect Music has a vast network of partners that can help artists expand their musical product. We do extensive evaluation of an artist’s music, their team, and the resources around them. From there, we determine what an artist needs to strengthen their infrastructure and fully leverage their brand.
For example, we have some clients who have a large audience following but don’t have the foundation around them to support project rollout and cultivate active community engagement relationships and sponsorships. We can provide those resources. Additionally, we have active and effective partnerships with streaming services to identify brand alignment through updates and future integrations that benefit our clients products.
What will you get in return for investing in artists, for example do you take equity in the artists’ masters?
Absolutely not. We don’t take ownership in IP rights. Our deals are structured to achieve return on investment and a longer-term licensure in exchange for our investment. There is a fixed revenue share up to 70% that goes directly to our clients.
If there was one thing you could change about the music business, what would it be and why?
For music creators to be able effectively manage full execution of their musical product to monetarily maximize their brands to their utmost capacity.
Despite the strides that have been made in the industry, many independent artists still don’t have the ability to fully recognize all facets of the music business and lose out on opportunities to do so.
There are still too many talented creators in the music industry that do not have the ability to leverage their craft through their music rights and intellectual property.
What are your long-term predictions for the independent artist sector?
I believe in the next five years we will see significant, double digit growth in the independent music sector. I also believe we will see companies divesting their catalogs to migrate into the service sector as the sources of monetization with Web3 grow and independent music expands.Music Business Worldwide