"Choosing a program requires more research and assessment than knowing your startup is likely to get a feature on TechCrunch as a benefit of being a Y-Combinator startup. What’s more, founders of music tech startups face hurdles and limitations unique to our space."
Guest Post by Dae Bogan on Music Industry Insider For The Indie Artist
It is no new news that the world of business accelerators and incubators is booming. The Top 15 incubators attract thousands of applicants for each cohort submission period. With over 50% of startups raising over $1 million each in additional financing after graduating a top program, many eager young entrepreneurs flock to these opportunities hoping to breakthrough.
Choosing a program requires more research and assessment than knowing your startup is likely to get a feature on TechCrunch as a benefit of being a Y-Combinator startup. What’s more, founders of music tech startups face hurdles and limitations unique to our space.
As a music tech entrepreneur, consultant, and startup advisor, here are the questions I recommend to ask when I help music tech founders evaluate options (typically, after they’ve received an offer):
- Does the accelerator/incubator make a seed investment? If so, how much and in what format (priced, convertible note, etc.)?
- Do they offer physical space to work out of? If so, how often, for how big of a team, and what’s included (supplies, equipment, accommodations, parking, utilities)?
- Do they host guest speakers? If so, on what topics, how frequently, and from what industries?
- Do they offer mentorship? If so, by whom (backgrounds and expertise), how frequently, and in what arrangement (one-on-one or group sessions with other startup teams)?
- Do they make introductions? If so, do they have a relevant network specific to your industry (i.e. music industry)? If so, how large is the network and at what levels (Director, V-suite, C-suite?) are those contacts?
- Do they help seek funding upon completion of the accelerator program? If so, in what format (demo day, VC outreach, angel networks, all of the above)
- Does the managing directors have expertise (and pass success) in your industry/vertical? If so, in what capacity (founder, advisor, investor)? Did those companies have a successful exit?
- What is their investment thesis? In what industries do they tend to accept and support startups?
- Has past cohorts turned out successful startups in your space? How is that success defined?
- Does all of the above substantiate the equity that you will give up?
It should be noted that universities are becoming bigger players in the startup space as well. Through entrepreneurship courses, corporate partnerships, and university-funded programs, more and more college students have access to resources and mentorship to build products and develop companies. As a provisional advisor to Sonabos, a startup out of the Martin Trust Center for MIT Entrepreneurship, I’ve had the pleasure of offering guidance and advice to three talented MIT students who’ve also received mentorship from amazing faculty.
My final word of advice to music tech startup founders is if you do decide to join an accelerator that does not specialize in digital media and have little to no history supporting music tech startups, leverage industry experts as potential advisors. Where your program may lack in industry knowledge and relationships, they may be strong in other areas, such as growth, financing, marketing, product development, and management mentorship.
Advisors, such as myself, who are music industry insiders may be able to help you understand the music industry components of your business, such as intellectual property implications (i.e. DMCA compliance, licensing, license administration, royalty processing, etc.) and technological development or integrations (i.e. automated copyright recognition technology, usage reporting, etc.).
Be mindful. Don’t let the idea of the glitz, glam, and indulgence of the startup world overshadow smart decision-making. This isn’t HBO’s “Silicon Valley”.