Funding Your Recording Projects Or Your Music Career

recording_studio© 2010 Vinny Ribas

As an independent musician, you may struggle with coming up with all of the money to produce your next recording project or event or launch your career properly. Here are some traditional as well as not-so-well-known ideas.

Please note – I am not an attorney and nothing in this article is meant to be taken as legal advice. Please consult your attorney before entering into any financial agreements.

  • Fans – Fan funding has become a very popular way to raise money for recording projects. There are online sites such as that facilitate this. Basically, you’re asking your fans to purchase your recording up front (or something else of value, such as a house concert, depending on how much they are willing to spend.
  • Friends And Family – Friends and family can fall into the exact same category as fans, except that you may not need to go through an online service to connect with them and facilitate the transaction. Friends, family and fans can also get involved in any of the other forms of funding mentioned below.
  • Personal Loan – This is a loan that you receive with full expectation that it will be paid back with interest. It most often comes from someone you know who believes in you. Personal loans can be secured using a simple promissory note, and may or may not involve putting up collateral. Please check with your attorney before signing anything to make sure you’re not getting locked into something that is not to your advantage.
  • Personal Bank Loan – Obviously this is a simple loan that you get from a bank and make payments on. Your ability to get this kind of loan is usually based on your personal credit scores, your income and your credit history.
  • Loan Against Royalties – If you have a predictable amount of royalties that are due you (e.g. a major label cut with an established artist), banks with music industry divisions who will often loan you money against them.
  • Business Loan / Small Business Loan – This is a bank loan that you take out in the name of your business. In many cases it will still be contingent on your personal credit history unless the business has been established for quite a while and has its own credit history.
  • Barter – You can barter your skills, expertise, services etc for many of the things you might normally pay for, such as studio time, musicians, graphic design etc. Keep in mind that you don’t necessarily need to be trading music-related services. For example, maybe you could do some bookkeeping or painting for a studio in exchange for your sessions.
  • Donation – You can take donations from people who believe in you and want to help. Keep in mind that your donors cannot take a tax deduction for their donation unless you are a registered nonprofit organization.
  • Pre-Sales – You can pre-sell your CD at your live shows. This works best if you offer a ‘bonus’ for fans who pre-order, such as a t-shirt or extra free downloads. Be sure to keep great records of who orders.
  • Grants – Depending on the nature of your act, you may be eligible to receive grants from any number of sources. There are foundations that fund artists whose work is of cultural significance. Your local and state arts commissions may offer grants to perform in schools. The possibilities are endless. Do your homework!
  • Profit Share – If you know you are going to sell a decent amount of your CD, you may find someone to front you the money and then take a few dollars off of each CD sold. This arrangement can end when the lender has been paid back with a specific amount of interest, or can go on indefinitely as a long-term investment.
  • Joint Venture – You may choose to form a company with one or more financial partners. You may want to secure the right to buy out your partners at some point down the road, assuming your career goes as planned. Always use an attorney when entering into financial contracts or setting up any kind of corporate entity.
  • Working Partner – You may find a partner who brings both money and a skill set to the table. For example, the owner of the studio may give you the studio time for free in exchange for partial ownership in the project. Another form of working partner would be someone who brings both money and distribution capabilities.
  • Sponsorships/Endorsements – If you are popular enough, you may get sponsors to pay for some of your career expenses. Examples would be having a company pay for your tour bus in exchange for promotion and sponsorship recognition. Musical instrument companies often sponsor artists by supplying them with products. You can get endorsements from non-music companies as well, such as beverages, clothing, jewelry, makeup etc.
  • Sell Nonprofit Sponsorships – Some organizations, such as Compassion International and World Vision, pay you to recruit sponsors from your fanbase. Both of these organizations help children in underprivileged countries. You are asked to do a presentation at your shows to get people to sponsor a child for a year. You get paid per sponsorship enrollment. There are other organizations that do this as well for other causes.
  • Merchandise – Of course you can sell merchandise from your website and at shows. However, if you design something that can stand on its own (e.g. a coffee table book of photos from your tours, or a unique t-shirt), you might find other distribution outlets for it.
  • Nonprofit Alignments – If your music has a specific message to it, you may find a nonprofit organization that will help sponsor you. Or, you may find a large nonprofit that will hire you to play fundraising concerts in the cities where they have a presence.
  • Corporate Gigs – You may find a company that holds conferences or other special events and is willing to fly you to perform at each of them. They might even pay for you to record a CD specifically to sell at their events. This happens most often when you write and perform songs directly related to their company or industry.
  • Benefactor – You may find someone who believes in you enough to give you money to fund a project with no strings attached.
  • Form A Nonprofit – You can form your own nonprofit and take donations. This happens often with artists in ministries, but can also apply to artists with a popular mission (such as bringing awareness to ecological challenges).
  • Take Donations Using A ‘Fiscal Agent’ – A fiscal agent can be any nonprofit organization that is willing to accept donations on your behalf. They should set up a separate bank account so you have access to the funds. Often they will ask for a percentage of the funds as an administrative fee. This is acceptable if the fee is reasonable, but some organizations go overboard. Do your due diligence.
  • Credit Card – You can fund your recording project with a credit card. Be sure that you have every reason to believe that you will sell enough CDs each month to make the monthly payments.
  • Retirement – Some artists dip into their retirement savings to fund a project or their careers. Be certain that the end result will be more than the risk you are taking. Also keep in mind that you may owe tax penalties for withdrawing funds before your retirement age. Check with your accountant.
  • Affinity Group – You may be able to align yourself with an affinity group (e.g. Harley riders) that would either fund your project or book you on an ongoing basis.
  • Church – Many churches support their worship team in various ways. Some have recording studios that the members can use. Others will allow you to perform concerts bring in revenues.
  • Live-Stream Concerts – Of course, much of your income will come from playing shows. But building your fanbase to the point where you can attract enough people to not only come to your concerts but also pay to see your concert online will put you in a different income bracket.
  • Sell bite-sized pieces – You can sell individual tracks as you record them, using the money from the first ones to pay for the next recording. The same concept applies toward selling an EP to raise funds to complete a CD.
  • Pre-licensing – You may be able to get a music supervisor or ad agency to license your masters for use in a film, TV or commercial before the entire project is done.
  • Project Writing – You may be able to get paid to write one or more songs for a commercial, film etc.
  • Indie Label – There are no rules these days when it comes to the relationship between an artist and an Indie label. Some have very favorable terms. Some simply become your marketing partner and still allow you to keep ownership of your master recordings and publishing. They just make money off of the CD sales.
  • Co-op – You can co-op with other artists on studio time, musicians etc. For example, you can book an entire day in the studio to get the reduced ‘day rate’, but split the time with another artist.
  • Investment Capital – Depending on how much you need, you may want to seek investment capital. Investors become part or even majority owners in your company or venture, so be very careful about pursuing this avenue. There are securities laws that need to be adhered to, so you will want to hire an experienced securities attorney. In some cases, the paperwork required to raise investment capital can, in itself, be very expensive. Also, keep in mind that there are several kinds of investors. The two most common are:
    1. Venture capital – This is funding from an investment firm and usually begins at no less than $2M – $5M. This kind of funding might be applicable to starting a serious, competitive record label. They will most often want to be majority owners of your venture.
    2. Angel investors – These are people who invest relatively small amounts of capital compared to the venture capital firms. Often this money is used to start a business (or your career) and get it established. Larger investors can be brought in later if you should need them.

This is a partial list of ways to fund your recordings or your career. The truth is that there are no limits to how creative you can be as long as it is fair, equitable and legal. It is very important to know that there are laws regarding many financial transactions, even between individuals. In addition, if you are not familiar with and OK with all of the terms, conditions and language presented to you in any financial agreement, consult an attorney!

About The Author

Vinny Ribas

Vinny Ribas is the founder and CEO of Indie Connect, an artist management, consulting and training company. The company also hosts networking and educational events and has published an app that connects people to the Nashville Music Industry. During his 40+ year career, Vinny has been a full time musician, artist manager, booking agent, songwriter, studio owner, producer and the Entertainment Director for the NV State Fair. He has also coached over 1000 artists and songwriters. He is a sought after speaker and has authored over 400 music industry articles. Vinny is also the CEO of Top 4M Entertainment, an independent film and television production company.