Gigmor, A New Music Tech Startup, Tests The Waters Of Equity Crowdfunding
Gigmor is a music tech startup that works to connect musicians with each other and, in the near future, venues. They are currently in the process of a crowdfunding campaign similar to Kickstarter, but which, instead of rewards, offers donors equity in the company.
Guest Post by Clyde Smith on Crowdfunding For Musicians
Gigmor is a music tech startup based in Santa Monica that’s been connecting musicians with each other for the last couple of years and now wants to connect them with venues for gigs. They’re currently in the early stages of an equity crowdfunding campaign to fund this next step.
Equity crowdfunding is a new form of funding a business. It’s similar to Kickstarter-style fundraising but instead of rewards participants buy actual shares in the company. I recently spoke with Gigmor CEO David Baird about what the company is up to with crowdfunding and gig booking.
Gigmor Began By Matching Musicians
Though there are earlier references to Gigmor, David Baird explained that they got going in earnest about two years ago. Since then they’ve been focused on developing a musician matching engine based on the information shared by musicians who’ve joined their business-oriented social network.
They’re happy with progress to date and currently have 45,000 members. But the long-term plan is much bigger than simply connecting musicians. Gigmor wants to be able to combine internal data shared by musicians with external data, such as social media popularity, to create what they call “GigScore.”
GigScore Will Be Their Special Sauce
GigScore is an algorithm that, for example, would allow talent buyers, popularly known as booking agents, to determine if an act is a good fit for a spot at a particular venue from opening act to headliner. But the opportunity goes beyond traditional music venues to include such events as weddings, college/corporate gigs and festivals.
Creating such an algorithm and growing their platform is a much more complicated challenge. It also opens up the possibility for Gigmor to create a more complete transaction on the site from connecting to booking to payments to establishing a gig history for band and venue.
Equity Crowdfunding on StartEngine
To this point Gigmor has been self-funded with a small team that has given up salaries for the chance to build what they believe could one day be a worldwide musician matching and booking platform. As they note in a blog post, to take this next step they’ll need additional funding in order to develop GigScore and the associated “virtual booking engine,” to create a mobile app and to hire new employees while paying the current team.
To raise that money Gigmor launched a campaign on StartEngine, an equity crowdfunding platform based in Los Angeles. Baird says StartEngine reached out to Gigmor about the possibilities. They decided to pursue this new approach in order to move beyond tech investors who tend to have sharply-focused interests. They can now include those who have been traditionally shut out of such investing, particularly folks in their extended music community and beyond who might see the appeal of helping build a company involved with live music.
What Is Equity Crowdfunding?
Equity crowdfunding first emerged with platforms such as AngelList but remained limited to accredited investors with relatively high income levels. The JOBS Act opened up multiple possibilities for non-accredited investors to get into the action while reducing paperwork requirements.
StartEngine is currently supporting Tier 2 offerings under the Regulation A+ exemption that allows one to attract non-accredited investors nationwide without having to file in each state. In the case of Gigmor, investors can participate for as little as $100.
Gigmor Tests The Waters
The first stage of Gigmor’s campaign launched this summer and is drawing to a close this month. This phase is called “Testing the Waters” and allows Gigmor to publicize the offering and get initial nonbinding statements of interest in purchasing shares. If all goes well, a public offering will soon be announced.
While the first stage has been in progress, Gigmor has continued to develop the groundwork for their gig matching service. In particular, they announced a partnership with Music Box San Diego last month to put their prototype to work.
Music Box’s talent buyer happens to be Joe Rinaldi who’s also an advisor for Gigmor. He’s been helping them identify the pain points on the buyer’s side in order to make sure that Gigmor is well-designed for those booking acts.
This early version will rely on Gigmor’s internal data, both that provided by artists and by social activity on the site, and will help guide future development.
For more about the offering please see StartEngine.