EC accelerator is wired globally
to pickup vital biz-tech ideas.
Updated: 21 Oct. 2014 - The Music accelerator, now dubbed Project Music, indeed has a Seed investors at the ready, the EC announced today: The founding investors are Creative Artists Agency, Vector Management, Ryman Hospitality Properties, Universal Music Group, Spalding Entertainment, DevDigital, Red Light Management and Galante Entertainment. Six to eight startups will be chosen per cohort, each will get at least $20K in exchange for some equity, and the investor group is prepared to consider further funding. Our Sept. 11, 2014, story follows.-Ed.
THE NEW MUSIC BUSINESS accelerator at the Nashville Entrepreneur Center will take the stage in January with potential Seed investors lined-up in the wings, VNC has learned.
Announcement of the new program came Sept. 9, with the EC's unveiling of its "title" sponsorship by the Country Music Association (CMA). EC-CMA said the program is the "first ever" of its type.
Asked about progress in preliminary discussions with the investment community, EC Entrepreneur in Residence Joe Galante told VNC on Tuesday that he "feels good" about the initial responses he's received from those who might become investors in the companies that will come through the program.
Galante said operating details of the program are still being sorted-out, and noted that the initiative is meant to encompass tech-driven opportunities in Music and thus, directly or indirectly, throughout "the entire Entertainment sphere." Its creators are "deliberately casting a wide net," in order to capture "the best ideas from everywhere we can possibly get them," he said.
Galante, who is a CMA board member and former chairman of SONY Music Nashville, also told VNC he was particularly pleased by the very enthusiastic response by the CMA board of directors, when he presented the sponsorship idea to them.
Galante said that he, EC CEO Michael Burcham and others had been considering the idea for at least a year, and the move was in no way triggered by any sense of competition arising from other cities.
Asked about the role of the investors who will be recruited, Burcham told VNC, "The investor group organizing is very similar to Jumpstart, Healthbox, and most other accelerators in the country.
"It's technically 'seed capital'," said Burcham. He explained the group is being organized to "provide each of the entrepreneurs whose concepts [are] accepted into this program with $20K [each] to help them get their concept prototyped. Most of these young ideas will need help with modeling, MVP [minimum viable product] development, some coding, etc.," Burcham said.
"These seed investors get a very small amount of equity in exchange for providing the initial money to help turn a 'PowerPoint' idea into something an investor might be interested in," said Burcham. He added that the "Angel Process" begins with the new program's first Demo Day
, in the April-May 2015 timeframe.
VNC in 2011 reported on a related concept then being pursued by the EC with the then-fledgling Music City Music Council. The MCMC is led by Randy Goodman and has evolved into behind-the-scenes role as a resource for more traditional economic development. The EC's Healthcare programming gained HCA sponsorship in April, having previously been sponsored by Galen Partners.
Asked whether CMA's sponsorship was financial or in-kind, Galante said CMA provided a cash sponsorship, in line with those garnered by other EC verticals. Terms of those EC sponsorships are not announced.
The new accelerator program's staff director, Robbie Goldsmith of the EC, told VNC that a formal announcement regarding the investor group aligned with the new accelerator program is likely to occur by about Sept. 20.
Goldsmith also said the application deadline to compete for six to eight seats in the accelerator is likely to fall in early November, with details about the "global" competitive process to be announced by roughly Oct. 1.
"Nashville is the logical place to launch this program," Burcham said in the group's release Monday, in which he added "Music City is also the Entrepreneurial City and the 'It' city, where dreams become reality."
CMA CEO Sarah Trahern was quoted in the same release saying, "CMA was created to advance country music and provide a forum for new ideas that support our business interests across every segment of the industry. This is an investment in the future of our business community and city."
Galante said in the release, "Nashville is the place where the best possible mentors for music and technology intersect. Any of our future startups will have a dream team to help them realize their vision."
With apparent reference to disruptive technologies and related economic upheaval in the sector, the EC-CMA release also stated, with no attribution to a specific executive: "The traditional music business model and the newer digital access model are both in transition. Most stakeholders agree that the current state of affairs in the music industry does not benefit its constituents, which leaves innovation as the key to the future of the industry."
Also according to the release, "The accelerator will support the development of new business models for the music industry, seeking to help programmers, technology engineers, and music business entrepreneurs create a sustainable future for the industry."
Applications to the Accelerator will be invited worldwide, according to the release. Thus far this year, Tennessee accelerators have accepted into their cohorts or pitch contests companies from Hungary, Mexico, China (Hong Kong) and elsewhere, in addition to the United States. And, SrPago, a Mexico City-based company, won this year's LaunchTN Southland competition.
Burcham and Vic Gatto, a Solidus Partner and chairman of Jumpstart Foundry, recently collaborated to form the Selous Venture Society, an Angel investor group.
In 2012, then-CMA CEO Steve Moore told VNC that as a nonprofit 501c6 organization, CMA could not consider unilaterally creating its own captive Music incubator or fund, which would be inherently risky and disallowed.
VNC research into music-industry disruption regularly turns-up interesting commentary. Here's one example. VNC