In the last few months, there’s been more public discussion than ever about fairness, transparency, and opportunity in the music business.
If you’re willing to read on for a couple of minutes — and trust that this middle-aged white guy awkwardly quoting 2020 protest songs is worth listening to — I’m going to make a commitment to invest in that improved music business. A commitment with real dollar bills attached to do it.
“It can’t change overnight, but we gotta start somewhere.”
First, some background: I’m not a VC. I’m a talent scout. As the managing director of Techstars Music — an accelerator program for startups building the future of music with technology — it’s my job to find teams of incredible people solving global, scalable tech problems in and around music and live events.
During each of the past four years, my team — Jen Hall, Emily Coleman, Samantha Russo, Kara Kennedy and Matt Sandler — and I have scoured the planet to find the best batch of 10 startups for our program. We’ve invested $120,000 in each selected company, moved them into our office in LA, and gone to work with the founders to help grow their businesses as quickly as possible.
We do this with the help of our member companies — Warner Music Group, Bill Silva Entertainment, Sony, Concord, Royalty Exchange, AVEX Inc., Peloton, Entertainment One and Amazon Music — companies who are both investors in our fund and our partners in selecting each year’s class and running the program.
It works: The startups in our portfolio have raised more than $100 million in follow-on capital after leaving the 13-week residence in our office. Seven of them combined have a market cap in excess of $400 million. Three have already been acquired. Techstars Music is the best and most reputable accelerator program for music-related startups in the world.
And yet, across those 40 investments, just one team was led by a black American. Only five had female CEOs. While this level of diversity far exceeds the averages for representation in venture capital as a whole, it’s plainly and obviously not good enough. Not one CEO identifies as LatinX. We’ve never funded a black woman.
This year will be different.
“Not a single thing has ever been mended / by you standing there and saying you’re offended…”
The global music business is facing both unprecedented challenge and opportunity. Now, more than ever, we need to do our part to support entrepreneurs regardless of their cultural background, economic status or physical location.
As investors, we think this is a once-in-a-generation opportunity to build a gigantic business in music and live events. We also think it is our moral obligation to do our part (however small and specific our role may be) to start building a more equitable and diverse music business.
As a result, we’re making the following commitments:
1. Techstars Music 2021 will run entirely remote — We no longer require startups to relocate to Los Angeles upon acceptance. No travel or in-person meetings required. Techstars Music 2021 will start February 16th and end with our annual Demo Day on May 13th, 2021. Applications to be considered for the program are open to the public, and can be made right here. (Be sure to create an F6S account prior to clicking that link!)
2. Techstars Music is committed to 50% of our program CEOs being diverse — with a particular focus on black, LGBTQ+ and female founders. Black and LGBTQ+ culture are undeniable drivers of global music culture, and we believe startups led by individuals who identify with these cultures are best-positioned to shape the future of the business. Our program will use this benchmark of 50% diverse CEOs going forward. ‘Diverse CEOs’ includes people of color, women, LGBTQ+, people with disabilities, historically marginalized communities, indigenous people, and military veterans.
But these first two small and specific changes alone are not enough. If we commit to investing in founders from underrepresented communities, we must make sure we supply enough capital for these founders to truly succeed, and we also need to diversify the voices on our selection committee to help us make better decisions and challenge our habits and biases.
Let’s deal with the money first: Underrepresented tech founders are at the biggest fundraising disadvantage at the early stages, with the first initial $1 million being by far the hardest to raise. Small amounts of early funding, especially when it comes from specific investors who can help validate a company, are often the difference between life and death for startups.
We’re thrilled to announce our member companies have created a program to provide an additional $60,000 in matching investment for all startups accepted into the 2021 Techstars Music Accelerator that meet our ‘Diverse CEOs’ criteria. Member companies in the matching program will also make an additional follow-on investment of up to $100,000 each into those same startups’ post-Techstars round of fundraising, provided the startups match their strategic goals and priorities.
These additional funds, currently $180,000 upon acceptance and as much as $200,000 in post-program funding, will provide startups led by diverse CEOs with up to three times the normal Techstars accelerator capital — more than enough to cover an additional early employee salary and six to nine months’ worth of operating runway.
“Might as well go ahead and start here…”
Thank you, Concord, for including us in the $10 million Concord Impact Investing Initiative, and thank you to the rest of the membership for committing to make a material difference for these startups. I suspect we’ll see some incredible teams in our 2021 program as a result.
We are also actively working to diversify our recruiting efforts, our global mentor pool (comprising 300+ mentors from tech, venture, music and live events) and the membership itself. Which brings us to our final action — a move to diversify the Techstars Music membership and investment selection committee:
We are excited to welcome Right Hand Music Group to Techstars Music. Founded by Courtney Stewart, Right Hand represents global superstar Khalid. Courtney and his team will join our investment committee effective immediately. This is our first member company owned by a person of color, and it will not be our last. When the committee forms in early December to make our final evaluations of startups, we will be in a much better position to ensure people of all communities are represented on both sides of the table.
“Do you hear that thunder? That’s the sound of strength in numbers.”
Of course, none of these actions are enough to solve the problem of diversity and inclusion in music tech. Listen, I get it. It’s hard. This editorial took me almost three weeks to finish. I’ve deleted ten times more words than appear on this page.
Who am I to deserve this space in the most famous music magazine on Earth? How do I know the way we’re making these commitments isn’t offensive to someone we need to do business with soon?
The answer is, I don’t. But we can’t let the size of the problem prevent us from starting at all. We have to figure out a way to seize the incredible opportunity on the table in 2021. If we all challenge ourselves to do something small and specific — even if it gets a little awkward — I know we will make incredible progress.
So, if you’re a founder tackling a global, technical problem in music, culture or live events, please get in touch. If you’re a music exec or an investor or an artist who wants to help build the future of music, we want to meet you too. Let’s invest in the future of music together.
Bob Moczydlowsky is the Managing Director for Techstars Music, a global startup accelerator that invests $1.2 million each year into 10 of the best music-related software startups from around the world. Prior to creating Techstars Music, Bob served as the Head of Music at Twitter and as SVP Product & Marketing at Topspin Media (acquired by Beats Music in 2014). He loves Lil Baby and IDLES equally.