Paying for an EP. How do I stay protected?

Discussion in 'Band Management [BG]' started by father of fires, Feb 5, 2014.


  1. father of fires

    father of fires Supporting Member

    Joined:
    Nov 29, 2006
    Location:
    BALTIMORE CITY
    I am thinking about paying for my bands upcoming EP. Most of them have limited means and I am willing to put up the money just as long as I get repaid first from any sales and maybe any money the band makes, etc.

    What's the best way to stay protected?

    It's not that I think these guys will screw me over. We're all good friends. I just know that we are notoriously unorganized and you never know what can happen in the future.

    I'm only talking a couple of grand at most. I don't have the cash but I will be financing it through other means so I will be on a repayment schedule of some sort.

    I was thinking of having a lawyer draw up an agreement. But how is that paid for? How much would it cost?

    Maybe I need an accountant?

    Maybe we should officially turn it into a business?

    I read some stuff on line and I've read some stuff on here before but we're a small part-time metal band. We all have jobs and families and such and I'm not sure what applies to me or not.

    My main goal is that before I spend a penny I want a clear outline of what it will be used for. How quickly we'll move on things and how I will be repaid.

    Thoughts?
     
  2. sparkyfender2

    sparkyfender2

    Joined:
    Nov 25, 2013
    I would not borrow for the investment. You may not make any, or very little, of your money back.

    Are you willing to invest and know you may never be reimbursed? I would be leery.... Good luck!
     
  3. Joe Louvar

    Joe Louvar

    Joined:
    Jun 6, 2011
    Location:
    Santa Rosa, CA USA
    +100%

    Unless you're prepared to write the whole thing off as a loss - don't do it.
     
  4. Violen

    Violen Instructor in the Vance/Rabbath Method Supporting Member

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    Kansas City Metro Area
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    Endorsing Artist: Conklin Guitars (Basses)
    Unless your band is 100 percent amazing on the songs you are recording do not do it.

    At the end of the day, if all you get out of its an EP, is it going to be something you can stand listening to if you never get a penny back? It better be off the chain, writing, recording and performance wise. Otherwise it will really put a bad taste in your mouth.

    Also, if it's good, you get all the proceeds from Sales.

    When i did this, my band was amazing. The recording came out great and it worked for us. Would have not been the same feeling if we had done it with our first demo/material.
     
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  6. father of fires

    father of fires Supporting Member

    Joined:
    Nov 29, 2006
    Location:
    BALTIMORE CITY
    Don't mind losing the money. But only if it comes to it.

    I just want a good plan in place.
     
  7. father of fires

    father of fires Supporting Member

    Joined:
    Nov 29, 2006
    Location:
    BALTIMORE CITY
    This is not our first recording. I'm just looking to pay for the current one.

    They asked me if I want something drawn up so I'm looking into it.
     
  8. aggrokragg

    aggrokragg

    Joined:
    Dec 18, 2013
    Location:
    CT
    Rocketlawyer.com to set up a free contract.

    If you have a solid following maybe do a Kickstarter to try and front part of it so you're not 100% on the hook to cover it.

    It just lets your fans pay for the EP up front. That said, make the highest quality product you can!
     
  9. Slough Feg Bass

    Slough Feg Bass

    Joined:
    Sep 28, 2007
    Location:
    San Francisco
    just take all the sales from everything until you get paid back?
    like when you play a gig, just take all the money.
    any CD's or downloads, keep the money.
    put it all in an envelope or account and do not touch it until it reaches the payback amount.

    Then all is good.

    I just a keep a monthly P&L spreadsheet and it helps a lot to keep track. We have a once monthly short business meeting where I tell them how much we made, where it went, and how much the band still owes me, with interest of course.
     
  10. Joe Louvar

    Joe Louvar

    Joined:
    Jun 6, 2011
    Location:
    Santa Rosa, CA USA
    Well, if the songs and band are hot (you're really digging it) and the money really doesn't matter - record now while its still fresh and hot for yourself - for your own personal collection - and if you can sell a few copies too, way cool, and if not - no big deal.
     
  11. Ender_rpm

    Ender_rpm

    Joined:
    Apr 18, 2004
    Location:
    St. Louis MO
    We used the Square App and reader to take payments at shows. Went into a "band" account, but was easily broken out into CDs vs Tshirts etc. Cash sales were "redeemed" by me using the App as an ATM (ie I swipe my debit card for the amount of the sales, while I pocket the cash. Money still end sup in the account, just no ATM run).
     
  12. Slough Feg Bass

    Slough Feg Bass

    Joined:
    Sep 28, 2007
    Location:
    San Francisco
    yes, I use square all the time. Love it.

    at busy shows, gf does the swipe & I do the cash deals. works out great!
     
  13. Lownote38

    Lownote38

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    Aug 8, 2013
    Location:
    Nashville, TN
    If you pay for it, you'll own the masters. If anything crazy happens and you don't get your money back, you don't have to give up those masters for any reason. They would have to re-record them.
     
  14. bassgod0dmw

    bassgod0dmw Supporting Member

    Joined:
    Mar 1, 2007
    Location:
    White Plains
    I would just say don't take out a loan to pay for it. The likelihood that an original band is going to pull in money on a steady basis to pay it off is somewhat slim.

    As for an accountant or a lawyer? I wouldn't bother with an accountant and a lawyer very well may cost more than the recording does in the first place. As for how they are paid? With money...
     
  15. Mushroo

    Mushroo

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    Apr 2, 2007
    Location:
    Massachusetts, USA
    Personally I would make the best quality EP/demo I could make using the equipment I already had available to me at no charge. Even a cellphone video can get millions of hits these days. Consumers are looking for interesting/entertaining content, not quality/fidelity.
     
  16. 62Jazzbass

    62Jazzbass

    Joined:
    Jan 31, 2009
    Location:
    Northern Virginia
    Sounds like you are of limited means as well. You are borrowing money, but they can't? Why do that?

    Are you a husband and or father? How's the retirement fund? College funds? Rainy day funds? Any home and/or auto repairs you have been putting off?

    I'd make sure those things are squared away first before spending money on a band, particularly if you are BORROWING it, with little to no possibility of pay back or return on the investment.

    "Our bands CD was a million seller..........we got a million of 'em.......in the cellar."

    Sounds like the lawyer would be paid by you, and he's gonna want him money when services are rendered. He won't take a % of the "profits" as payment.

    I wouldn't bother with that. First, a legal agreement is only as good as your desire to make them perform to the terms. You willing to take them to court for repayment if they don't do so willingly? If not, all you got is a useless piece of paper.

    My band doesn't spend a dime if it ain't cash and it's not divided equally. Period.
     
  17. karl_em_all

    karl_em_all

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    Jul 11, 2013
    Location:
    St. John's, Newfoundland CAN
    I wouldn't front the money if I were in your shoes. Maybe try looking for a cheaper alternative that the band as a unit can handle financially. Find someone who can record your band competently at a lower rate and work with that budget (networking!!). Have the songs ironed out and as tight as possible before recording. Don't look for a perfect recording. You just need one that sounds cool for the people who are going to (hopefully) buy it.

    Someone mentioned Kickstarter. I know of bands that used this and they set it up so that the money sent towards the band bought the fan an advance copy of the music. Pretty cool. It gave them the money to record and make copies (CD/vinyl/digital whatever).
    Personally I'll sink money into my gear and whatnot but as a rule any band I'm in (I only do original) has to pay it's own way, through gigs, merch, ect. Band money is used to pay for band stuff.
     
  18. derrico1

    derrico1 Supporting Member

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    Apr 12, 2005
    Location:
    Charlottesville, VA
    There's a reason you don't see mutual funds specializing in bands' local and regional releases.

    It's high-risk and low-yield. Don't do it as an investment. Do it because you love the music and you can afford to lose the money.
     
  19. Jeff Elkins

    Jeff Elkins Supporting Member

    Joined:
    Sep 13, 2007
    Location:
    East Tennessee
    TL;DR paragraph:
    If you have a good rationale for even making the EP, I'd make it. It's a thrill, and with the right group you'll be proud of it forever.
    1. I would NOT borrow money for it (although I had credit cards with balances at the time we made our CD, so one could say that, technically, I did).
    2. Decide up front how to handle any situation involving the EP.
    3. Make a portion of EVERY gig come back to you until you're paid off--NOT just from CD sales.
    4. The band needs to pony up a portion of the investment, and if they can't up front, they MUST on the back end, so everyone works to sell them.
    5. Only a limited number get used for promotion (which you decide) at first. At some point, when a significant portion of your investment gets paid back from sales and gig-cut, you can loosen the limits, perhaps.

    +++

    I think you need to identify, for yourself AND the rest of the band, exactly what the EP is for. Relationships go down hill fast when money is involved without clear understanding.
    I want to share a few things that some fairly smart guys never thought about when we put together our CD; hopefully it helps. Three out of the four of us could afford to invest, and the three REALLY WANTED the CD to happen, so we pooled resources and paid for it. We wanted the CD as a record of a point in time (ego), to put into a press kit for bookings, to send to radio stations, to have at gigs (because "pro bands have a CD available at gigs" we figured) and to sell. Also, it was motivating to get into the studio and have a product. Made us more of a real band. We also had some originals that came alive with this lineup, and we wanted to capture them for posterity (and possible later songwriter-marketing).
    As far as $$, we figured we'd make our money back and pay for the give-aways (booking/family), and that's all we really wanted.
    But once we had the product, we had to hash through these things:
    a) Does the non-investor have to spend time at the cd table? It's part marketing for future gigs as well as cd sales...
    b) Who can decide to send the cd out to radio or for bookings, and how many? What if they're crap or unpaid bookings? What's the value of the gig, and is it even worth the price of the EP? Is it a tall, leggy blonde that pulled the guitarist aside and said she knew someone who knew someone?
    c) How many does each investor get to give away for family or ego? Do non-investors get anything? Will they recognize their studio time as "work product" or will they expect to be compensated in EPs for that time investment? Will there be originals? Is the songwriter/singer going to want copies?
    d) Maybe not applicable for you, but what if the band breaks up? What if one member wants to keep/reuse the name, and the "old lineup CD" is still valuable for marketing? What if an investor gets fired or quits?
    e) What's the band price? We did it "at cost." We sold more at cost in the first month to each other than we did in regular sales in the first 4 months.

    If you're the only investor, it's your product, but you'll either have to make it clear how the EP is to be used up front, or deal with each situation as it comes (or both), and, in my experience, that can make you crazy. Furious. Disappointed. Broke.

    Even with a lot decided up front, it was problematic for us. Our first CD was (is) amazing, but we have a limited audience in an obscure genre, and after a year one investor left and got bought out (an early decision we put on paper with criteria that he met), and now two of us are are now sitting on half of the run, and the band doesn't play out much. We needed to sell 2/3 to make our money back--there were definitely marketing steps we could have taken (more unpaid gigs, for example) that would have improved sales. But we finally had to just accept the loss. We're proud of the CD. It's a record of a point in time. C'est la vie.
    Sorry for the novel.
     
  20. vbchaos

    vbchaos

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    Write the conditions down, let all band members sign it - period! Costs you 30 minutes and a piece of paper.
    All friendship stops when it comes to money! Don't let money break up your band. I share your idea of funding this project on your own. We paid the parts of our drummer, too (poor student). But he did not get any cents of the income until the production costs were back in. We discussed that very friendly, put it on paper and no bad blood has flown.
     
  21. fhm555

    fhm555 So FOS my eyes are brown Supporting Member

    Joined:
    Feb 16, 2011
    Why not finance this EP it with the profits from the previous recordings?

    Oh wait...
     

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