A platform for artists to raise money by having people invest in their music.
The same reason businesses have people investing in them. When artists give investors a percentage of their earning, an incentive is created for people to fund and promote the project. Like the business world, the more money artists earn, the more investors earn. It’s a win-win for everyone.
Artists first set up a campaign for their project, deciding on the amount of money needed to be raised and the percentage they plan on giving to their investors. Once the campaign goes live, people can buy shares in the project. As the project gets fully funded and the artist releases their music, investors get a percentage return from the revenue generated by streams and downloads. The amount that investors earn is based on the amount of shares they purchased.
Artists are welcomed to sign up and start using PerDiem here. It is important to read over all of the resources before applying, in order to better understand how it all works.
Artists need to figure out exactly how much they need to raise for their project. This means discussing all costs with band members, producer(s), manager, studio...etc. It is important to keep in mind that unknown costs may come up unexpectedly. This can include mixing and mastering, extra recording time at the studio...etc. We also recommend talking with a music attorney first to make sure that all proper tax guidelines that go along with creating and selling music are being followed by the artist. The breakdown of costs for the amount being raised must be submitted to PerDiem, in order for investors to understand how their money is being spent.
The percentage that is set to be given back to investors can be determined by several factors: how big of an artist you are, how much you are trying to raise, and how engaged of an audience you have. If you are a smaller artist with a small fan base, you may want to raise a smaller amount and give back a higher percentage. However, if you are a larger artist with a very engaged fan base, you can raise more and give back less.
Return on investment is one of the most important parts of a campaign. A great way to determine the potential return on investment (or "ROI") is to figure out the project’s valuation. Valuation is the break-even point for your project (the amount your music needs to earn for everyone to make their money back). You can calculate the valuation by dividing the amount being raised by the percentage given back to investors (total raising / % given back). If your valuation is too high, you can either raise less money or give a bigger percentage back. We recommend your valuation to be as low as possible to incentivize investors to buy more shares in your project.
Artists can decide their own campaign deadline. If artists are unable to raise the set amount for their project in that timeframe, all investments will be credited back to the investors account. We have found that shorter 30-60 day timelines have the most success.
When playing in a band or working with producers, there can be situations where multiple people get different percentages of the project’s total revenue. If earnings are to be split among band members and other people involved in the project (manager, attorney, producers, engineers...etc), the percentage split needs to be figured out before recording the music project to ensure fair distribution. Adding someone on at any point during the project is permitted but must be communicated to PerDiem. Since their split of the revenue will be coming out of the artist’s total percentage, the percentage split will also need to be figured out early on to avoid complications down the road.
Distribution of project revenue is done via PayPal, so every member of the project that have yet to setup a PayPal account are required to do so. It is highly recommended that the e-mail used to setup PayPal is the same e-mail that is associated with your PerDiem profile.
Once PerDiem verifies an artist application, the artist profile will appear on PerDiem’s platform. As an artist, setting up a profile is important because the majority of investors want to get an idea of your visions and sound before investing. Adding a bio, a picture, social media links, streaming websites (Soundcloud/Spotify)...etc., will attract investors and can potentially make or break a campaign.
It is important to post updates and to keep your investors engaged in your campaign. This can be done as easily as inserting a photo and posting a quick update with your project’s progress. These small updates can go a long way for building an engaged and passionate fanbase. The more you update them, the more they will want to support you and share your music.
People are compelled to momentum. If there are many investors engaged in your campaign, others are more likely to follow. In other words, a strong foundation paves a path for your campaign’s success. A great way to launch a campaign is by letting your friends and family be the first to know about your campaign and encouraging them to invest in your music. This gives them an exclusive opportunity to be a part of your project and builds momentum for your profile.
A great way to drive people to your campaign is by sharing the direct link with them through social media. Your profile page is public so anyone can see it. It is important to share why you are giving your fans a chance to invest in your next music project. Be sure to keep the messaging personal and from your own voice.
Media and blogs are huge resources for attracting investors to your campaign and gaining new fans. An effective way to approach this is to find a publicist or to work with a PR company that can promote your project.
If your campaign doesn’t hit its goal in the time that you set, all money invested will be credited back to the investors. We cannot guarantee that every project will be successful, but a new campaign can always be launched after evaluating the previous one. From what we have seen, a few reasons why campaigns end up being unsuccessful include:
Once your campaign reaches its goal, all of the money raised will be sent directly to your PayPal. Artists (or managers) have the responsibility to make sure that the fund is being spent in accordance to the breakdown of costs. Maintaining this trust and accountability with fans is essential for your music’s long-term success.
Finally, you get to hit the studio and record your music. Remember, everyone is investing in your vision and this project is your expression of art. We encourage you to make music that your fans are going to enjoy based on the vision that you have set out to create when you first launched your campaign. The best way to generate revenue is by creating music that people are going to love and want to support.
It is essential for artists to have clearance for all rights to their music. We are not responsible for any copyright infringement by artists. If your music gets flagged, it may get removed and you will be liable for repaying all of the revenue generated from your music to the copyright holder. When working with samples and producers, it is important to make sure that everything has been cleared prior to the release.
In order to protect investors and to make sure that all licensing and registration is done correctly, all music will be distributed internally through PerDiem. This is an important aspect of the platform because it is how we can accurately track and distribute funds generated from the project. We take care of all the complicated parts of managing, tracking, and distributing funds for artists, and we believe that transparency, trust, and integrity are all essential for creating a better world for music.
In order to distribute music properly, we need a good amount of information about your music and its contributors. To obtain this information, we will send out a form that includes everything needed for artists to fill out.
Artists will be able to see the links to all music channels (iTunes, Spotify, Google Play, etc..) on their project page, under the Music tab. In addition, both artists and investors can check the progress of how much the project is earning on the artist profile page.
Investors are likely to be your most loyal fans and can play a significant role in the success of your career. Thus, it is strongly encouraged to keep investors engaged throughout the life of your project. If you keep them up to date with everything that is happening in your career, they will be more willing to share and promote your music.
Artists can raise additional funds for their project by starting a new campaign and issuing more shares to investors. This means raising additional funds to promote your record by going on tour, recording a music video, or working with PR companies. Note that any additional funds raised through PerDiem will be taken from the artist percentage so that no shares from previous investors are diluted.
Artists can raise money for multiple projects, as long as they are not simultaneous. Once one campaign is completed and the music is released, artists can start an entirely new project and launch a new campaign. It is recommended to leave at least a 3-month gap between projects, as it is crucial to promote your first project as much as you can while it is still fresh, before moving on to the next.