So do you have any tips on how to overcome those venues and reach a higher level? I mean, there's the obvious "if they don't pay, don't play," but how can we get our band names out there if we're not playing out? Obviously $200/small cut of sales isn't nearly what my 11-piece funk band
should be getting paid, but we're new, so no one knows our name and doesn't know that we can keep people at the venue dancing and buying drinks.
How do I get my name on the same bill as Nate Watts and Doug Johns?

lol
5sg.
One is don't play your self short. Always remember there is always room for negotiations. When dealing with getting paid there should be 4 levels of target.
1.
Your primary asking price
2.
your ok I'll come down a little price
3.
This is the lowest I'll go but still within the realm of your sincerest integrity.
4.
Just free and hope something good comes out of it.(with a strong emphasis on hope).
And don't let being the new band on the block an excuse to allow yourself to be taken advantage of.
You would come out better playing festivals and definitely funk fests, the crowds are much larger than some small club and work on being the opening act for more established bands.
Remember festivals have a atmosphere that puts a different focus on the band. If you're playing a funk fest even though you may be the new guys on the block, people that are there will take the time to check out how you're bringing the funk.
And if you have a realistic idea of what you think your band is worth resort back to the 4 levels of target above.
Remember in these economical hard times and lack of respect for artist an 11 piece band is a tough one, especially when you're trying to establish a name.
Ever though about just turning the band into a trio or a quartet? It would get you a little farther sooner and you could then bring in the full band later.
And getting on the same bill as Nate and Doug, well that comes with time. Remember we all have to crawl before we can walk.