a lack of talent is causing VC to turn their backs on music ventures

Jean Bourcereau, Ventech

MIDEM is organising sessions called ‘Meet the Speakers‘, providing you a 10 minute one-to-one meeting with panelists you’re interested in. So they do with the speakers of their ‘Looking for Funding’ Panel, where venture capitalists and consultants will discuss potential benefits to the music industry in soliciting financing from such investors. Among the speakkers are Jean Bourcereau, General Partner at Ventech, David Goldberg, CEO Survey Monkey and Nenad Marovac, Managing Partner, DN Capital.

David Pakman

This might be an interesting panel to see, as David Pakman a partner at VC firm Venrock and a music industry veteran said in his blog:

“It’s (the music industry and related start-ups) not very fertile ground for VC investing. You want healthy margins, high growth and various business models that can be successful. I’ve seen no interesting commerce or advertising models. It’s hard to build a business that can build some big cash flow.”

Pakman should know, after founding and leading a number of online music start-ups. Before Venrock, Pakman was the chief executive of digital music retailer eMusic. He also co-founded Myplay Inc., which introduced the “digital music locker” and later sold to Bertelsmann, and was the co-creator of Apple Computer’s music group.
Bottom line is, that Pakman believes the lack of talent is causing investors to turn their backs on music ventures. “You’re going to see most of the funding for digital music go away,” Pakman said. Digital music start-ups have identified two basic revenue streams – sale of digital goods and advertising. But companies selling music face incredible competition from major download sites like Apple’s iTunes, while advertising revenues are not strong enough to keep up with the cost of licensing music. That’s made it hard for investors like Dennis Miller, a general partner at Spark Capital, to find a meaningful barrier to entry, he said.

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