When it comes to building up the recording budget, some bands sell plasma, some bands launch fan-funding campaigns, and some bands seek venture capital investment. Wait, what?
Yep– the talented young guys in garage-rock outfit Cab 20, along with their manager Tom Callahan, went on ABC’s show “Shark Tank” to pitch their project to potential investors. Watch the clip above for the drama; read the interview with Tom Callahan below for details.
Can you talk a little bit about the history of the band leading up to the point where you decided you wanted to seek VC investment?
I have been developing the band for about a year, recording, and getting the lineup correct, etc. Bert Hoover, the leader singer/writer/guitarist, is very proactive and has been very involved. The new bass player Jason is as well and handles most of the website stuff. I brought in grammy winner Krish Sharma (who I also manage) to produce.
How had you made money in the past?
Me personally? — As a record promoter, manager and consultant. For the band, they are not at the stage where they are making any significant money.
The band is still pretty young, but how have things changed over the years?
Bert has grown as a songwriter. I met him when he was 17. He is 19 now. He has developed confidence and vision for what he wants.
What was the economic situation of the band like right before the show?
The same as it is now, we turned the money down :).
Who thought of the idea of going on Shark Tank?
A mutual friend of the executive producer contacted me.
What was the process like of getting on the show?
We had recently shot a video and I submitted that and also had a phone conversation with Clay Newbill, the Executive producer. Then I had coffee with him. Done.
What were your expectations going into it?
My expectations were we would get an offer…whether we accepted or not was not the main issue. The bigger point was to have the band perform in front of 7 million viewers.
Did you have an internal band agreement about what you would settle for and what offers would not fly?
I sort of did with my attorney, and I shared that with the band. They trusted my judgement.
What was the experience like of actually pitching Cab 20?
Truthfully, that was nerve-racking! The entire pitch and negotiation was about 90 minutes, which of course they edited down. The band performed 2 full songs and they edited down to 40 second.
Why did you decide against the deal?
I know $200K is a lot of money, but it can go pretty fast. It would certainly have been useful, but the shark would have owend 50% of every revenue stream and every dollar made. I thought with the exposure alone I can raise that much for a lesser percentage. The exposure alone will have the desired effect….that money can’t even buy.
Having gone through the process, do you see this approach (perhaps not on TV… but venture capital in general) as a legitimate or fruitful funding avenue worth exploring for bands?
I don’t think the VC route to fund a band or entertainment venture is anything new…it was the process that was unique here.
What words of advice and warning would you give a young band out there who’s looking to make things happen, but might not have the money to support their ambitions?
There are other avenues to explore such as kickstarter that can help raise funds. Friends and family can also help get things going. Branding is another option but admittedly more difficult for an unknown band.
What are y’all up to now? How’s it going? Did your TV exposure lead to other opportunities?
Well it’s only been a week and so much is happening already. Record label meetings, agency interest, etc etc. We shot this last October. So since then we decided to finish the CD to take advantage of the TV exposure and also for obvious reasons of having a CD….