Source: old yuppie
Spending money for idols is just the beginning. After idols become superstars, they can give back to fans who joined in the early days. Is there still money to be made by chasing stars? Such a good thing? This article brings you an original analysis of Exceed, a platform for investing, earning, interacting, influencing and celebrating talent. Recommended reading.
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Have you chased the stars?
Have you ever spent money on idols?
In other words, which big star/artist/creator are you optimistic about, do you want to invest money in this person?
Today I would like to introduce you to Exceed, a creator investment platform that has just raised $8 million in seed funding. This startup aims to help fans and investors enter the highly confidential talent investment field. Artists can use their greatest resources to conduct IPOs. A real stock offering.
What is Exceed?
The Exceed platform is a marketplace that allows fans to invest in the talent they love.
Expanding on, Exceed has developed a marketplace that allows fans and retail investors to participate in the success of top talent, aiming to bring creators, investors, and fans together through a platform that allows any artist or talent to pass the U.S. stock exchange compliant Commission IPOs work with their audience.
Exceed aims to help fans and investors enter the highly gated world of talent investing, while entertainers can use their greatest resources to conduct a true stock offering through an IPO. The shares, known as TalentShares, will make it possible for fans to earn dividends by buying, holding, selling and trading on the Exceed marketplace. In addition to TalentShares, Exceed will offer collectibles, exclusive experiences and perks to further deepen fan engagement with the Exceed platform.
Exceed has invested $5.3 million in pre-market talent, allowing those talents to retain control of their work while raising the necessary funds to grow their careers and connect with their fans. The round was led by private investment firm BRM Group, with participation from global online venture capital platform OurCrowd and others.
Following the new funding, Exceed also announced today that music industry veteran Anthony Martini has been named president. Anthony has managed and developed multi-platinum labels such as Tyga, Killer Mike, Lil Dicky and IDK, and as CEO of Royalty Exchange, he pioneered the world’s first music royalty NFT.
But unlike royalty-sharing platforms, Exceed seeks to provide fans with a wide range of investment opportunities from music artists, influencers, creators, athletes and other talents who impact our lives. Exceed enables fans to benefit beyond royalty-related revenue and extends it to live performances, in-kind sales, merchandise, advertising and sponsorships, and various other sources of talent revenue.
What is “talent asset”
What does “talent” as an asset class mean here?
Unlike simply spending money on idols you like, idols are regarded as a “potential stock”, and idols generate a lot of income. Music artists, creators and athletes will generate more than $500 billion in revenue in 2021, a 14% increase over 2020. (Data sources: Based on 2021 U.S. Bureau of Labor Statistics 2021 International Report, 2021 State of Creators Report, and 2021 Deloitte Sports Earnings Report.)
The chart below shows that despite volatility in traditional asset class indices, we are seeing relatively stable talent-related income. This may be due to our consumption of entertainment only increasing.
▵ Source: Bloomberg Financial Services Index data, Equities = DJIA; Commodities = Goldman Sachs Commodity Index; Real Estate: CEIC Data Report 2021; Bonds: Bloomberg Historical Treasury Yields
Investing in talent has traditionally been reserved for a select few, such as media companies, private equity firms, institutional investors and high-net-worth individuals. For the average fan and investor, there are few practical ways to invest in the talent they love or their signature work. Fans are just a bystander, spending money to buy some happiness, and they cannot get the report of spending money on idols. Exceed, however, changed that by letting fans invest in talent. Types of individuals (music and entertainment, sports, online creators, etc.) that Exceed sees as part of a potential target asset.
Investing is just the beginning. The relationship between talent and their fans is a powerful motivator. Exceed’s in-app fan engagement tool allows fans to be a part of their idol’s success, not only through financial benefits, but also through special and exclusive rewards.
There are many talent markets in the blooming entertainment industry, each offering different ways and levels of engagement for fans and investors. Exceed chose to take a strict regulatory approach to the creation of its talent investment platform and ultimately its exchange. The securities it offers are subject to the requirements of the U.S. Securities and Exchange Commission (SEC),
Based on commercial arrangements with the artist, Exceed packages a percentage of the negotiated source TRI into a contract with the artist and provides the investment and potential financial return to fans/investors. This is called a TRIA (talent related income agreement). This TRIA may, for example, be limited to streaming revenue related to a single song by a music artist, or it may be more comprehensive and include all revenue streams an artist earns from a single song or set of albums.
How do I make money from my TalentShares?
Fans can financially benefit from their TalentShares in two ways.
The first is transactions.
It is possible to make money (or lose money) by buying or selling TalentShares on the market at a different price than when the user bought it.
The second is to collect dividends (POPs).
Similar to stock dividends, POPs offer holders of TalentShares the possibility of financial distributions based on TalentShares’ performance. POPs, and any form of income or capital distribution are not guaranteed, and it is possible that the TalentShares you own will not distribute any funds at all.
Dividends are paid quarterly, and in theory, TalentShares can be traded immediately after purchase. There is no mandatory holding period and you can sell your TalentShares privately as soon as you get them. However, transactions in TalentShares can only be conducted on alternative trading platforms that are properly licensed. Exceed intends to offer this functionality through its app in the near future, but please note that the platform does not guarantee that any such trading platform will be available to TalentShare holders, nor does it guarantee liquidity.
How do my investments support the talent I’m looking for?
It depends on the type of investment offered. The current platform investment scope includes investment before talent projects are completed (new projects), as well as talent creations (historical IP) that may have been completed a few years ago.
If fans invest in a talent’s new project, the funds are usually used by the talent to complete the project and bring it to market. In this case, the funds go directly to helping the talent advance their career. Once a fan has invested, they can promote that talent through Exceed’s fan engagement app and be part of the future of the project they’ve invested in.
If fans invest in a completed project (historical IP), the proceeds may go to talent to create new projects based on the investment they have received from historical projects. In this case, fans can also use our fan engagement app to promote talent and be a part of their ongoing journey.
Would it be a good investment option?
In addition to our cliché that the timing of any return on investment is highly uncertain, the financial and operational risk to talent venture companies is enormous. While the target return should reflect the perceived level of risk in any investment situation, this return may never be realized and may not be sufficient to compensate investors for the risk assumed. The loss of an investor’s entire investment is possible and can easily occur.
The talent venture capital market is highly competitive, with a small percentage of companies surviving and thriving. Talent VCs often encounter unexpected problems in areas such as product development, manufacturing, marketing, financing, and general management that often go unsolved. Talent VCs can require significant financing that may not be available through institutional private placements, public markets, or otherwise. So I think for individual users, this platform still needs to be cautious at this stage.