Francis and the Lights form LLC, get 1 million dollar valuation
Now this is interesting.
NEW YORK, Nov. 3. — Francis Farewell Starlite, frontman of independent band Francis and the Lights, today announced the incorporation of Francis and the Lights, LLC. The move includes a $100,000 investment from The Normative Music Company, giving the new entity a valuation of precisely one million dollars. Via: The Normatist
What does that mean? That means that Normative is attempting to turn the music industry on it's head. The gates have opened! For some quick background info -- Normative is a record label / music company started by Jakob Lodwick, who previously created Vimeo, worked with College Humor and a number of other projects.
A New Type of Deal
For this deal, it seems that Normative invested the $100,000 for a 10% equity stake in the band's LLC, generating a $1,000,000 valuation. That style of deal is wildly popular in the web startup / tech community, where VCs invest a portion of money for an equity stake in the company -- hoping that their investment will generate high returns.
That is also, however, atypical of the music industry. Groundbreaking, even.
What can be learned from this?
Although forming an LLC for your band is not a new idea, having a label or venture invest in your LLC is. If you're pulling in a fair amount of money from touring or merch sales, I would definitely suggest that you form an LLC in your home state. It is easy, inexpensive, and provides you with a liability shield.
My real takeaway would be this: If you do something interesting, talk about it!
Spread the word via your myspace page, your personal or music blog (if you don't have these, set em up!), your website's news section, local music / news publications, and anyone you come into contact with.
What Normative / Francis and the Lights, LLC did so well here was leverage the PR machine they have set up. As a case in point, the reason I am now posting about this story, is because a) it is interesting and relevant, and b) it showed up all over the place in my Google Reader. If they had not spoken up and shared the news with the world, I couldn't talk about it.
So that's it for the strategy. Check out the music!
MP3: Francis and the Lights - Night Watchman
Note: The mp3s posted on this blog are for educational purposes only and are availible for a limited amount of time. If you would like this taken down, please contact us and we will do so immediately.
