OVER THE PAST SEVERAL YEARS, MORE ENTREPRENEURS AND CELEBRITIES ARE TRYING NEW WAYS TO RAISE FUNDS. FROM GOFUNDME, ETC. HERE ARE WAYS THAT MANY FAMILIAR FACES ARE TRYING TO ATTRACT ATTENTION TO THEIR PROJECTS.
With individuals and small companies fighting for their share of the pie, today’s entrepreneurs are relying on sources other than traditional lending institutions or private investors to make their financial dreams come true. While there are more opportunities to apply for funds, there are several sources that have reached prominence through individual or highly publicized media campaigns.
Blende Magazine spoke with Rocky Bucano, the executive director of the Universal Hip Hop Museum, which is set to open in 2022 in the Bronx Borough of New York City. Bucano, who has been an executive at such labels as Strong City, LaFace and Rowdy Records, is an independent broker affiliated with several broker dealers in New York. He provides insight on the new trend in raising funds and describes the climate for burgeoning wealth builders.
Q: Over the past several years, there have been various ways in which fundraising campaigns have been initiated. What would you say are the differences in such initiatives as Crowdfunding. Kickstarter and GoFundMe and what are the advantages/disadvantages?
A: The age of crowdfunding began slightly more than six years ago to help entrepreneurs grow their business through rewards and equity participation. Now crowdfunding is used to fund everything and anything. Kickstarter has become the most adopted trusted crowdfunding platform for entrepreneurs, and donors because funding only gets disbursed when a project has reached its funding goal. If a project falls short of reaching its goal, the funds are returned back to the donor and the organization who setup up the crowdfunding campaign gets none of the funds. GoFundMe has more of a social cause service for its platform then does Kickstarter or any of the other large crowdfunding services. We have been testing a new micro crowdfunding platform called Spot Fund, which allows donors to make small donations as low as $1. We have setup a custom page just for the museum Spot.Fund/HipHop and are now asking the biggest names in Hop Hop for their support.
Q: You have been on an aggressive campaign to raise monies to build the Universal Hip Hop Museum. What are the challenges? What impact has social media had on the success so far?
A: When we first launched the campaign for the museum, most people were skeptical because there have been several previous attempts to create a museum for Hip Hop that didn’t make it very far. So needless to say their failure has made it a little difficult to get the skeptics to believe in the project. But over the years we have been able to stitch together some very unique events with companies such as Microsoft, Netflix and MSNBC to demonstrate the museum’s ability to produce quality curated Hip Hop events. Each successful event has helped the museum break through some of the skepticism and has brought on more funding support. We have several online fundraising campaigns going and are doing fairly well, but are still fighting to reach the right people who believe that Hip Hop needs to have its own museum to document, preserve and celebrate its history by the actual people who lived it and not by others who have only heard about it from other people. As more information comes out about the museum’s future plan for the Bronx Point location, then I am sure more people will be willing to give their financial support.
A: The best way to get funding is to demonstrate proof of concept before seeking investment. Investors want to see that you have the ability to manage your company and get it beyond the start up phase before they jump on board. Then there are some folks who are able to leverage their career successes to sell ventures that they will run and bring on investors early on in the baby stage of the venture. Most people are not fortunate like that and will have to be very innovative to find the right funding sources to back their dream.
Q: As the middle and lower classes struggle with day to day financial stability, what advice would you offer to people, particularly the millennial generation that may make sense? Some still live with their parents so that they can have the ability to have extra money for entertainment, transportation, etc., but it's never too early to invest in your future. Can you provide a couple of pieces of advice?
A: For all young people, especially the ones who are working but still living with their parents, should do their best to keep their expenses down and take 10% of their available disposable income and invest it in index funds which allows them to have a nice mix of industries and companies in their investment portfolio. They should also look at the rising cryptocurrency market, which has some clear opportunities that are providing a high return on investment. Because there is so much uncertainty in this market, all investors should proceed with caution. Do your homework before buying anything.
Q: There have been many famous celebrities who have attempted to use GoFundMe as a way to get the money to fund a project. Do you feel that more and more people are going to attempt these grassroots methods as opposed to going the traditional route which would be going to a financial lending institution?
A: Crowdfunding is certainly a good way to engage a large group of fans, or supporters, so yes, I do think that celebrities will continue to use crowdfunding platforms to seed their project with capital.
Q: The UHHM is a 501(c)(3). As a result, there was a campaign where on Giving Tuesday, funds were matched. Do you see a trend toward corporations matching funds or giving a percentage (i.e.. Amazon)?
A: Yes, it’s an easy way for large companies to show social responsibility without having to cut massive checks for non-profit organizations, they basically use other people’s money to support their philanthropic mission. We are building relationships with numerous corporations who offer similar charitable offerings. Amazon is great because they are the biggest online retailer in the world and if we are able to show people who their shopping is supporting the museum’s mission then I think we will begin to see a nice revenue stream from Amazon to support the museum’s programming.
Q: As a person who has been in the record business for two decades, would you say that these days more people are turning toward entrepreneurship?
A: Yes, there is not much of a record business anymore. With digital distribution available to all artists at a very low entry point and the cost to produce music very low there are more people willing to produce, distribute and market their own music. Chance The Rapper is the prime example of what can happen when you are able to control your own destiny. The UHHM has just released its first compilation album 16 Bars 4 Hip Hop featuring 26 songs with Hip Hop icons and fresh new Hip Hop talent from around the world. The feedback has been phenomenal. We are so glad that the museum is involved in original content production. We want to create a publishing and distribution platform to help Hip Hop pioneers find new ways to monetize their creative talent and also give fresh new artists a global stage to be seen and heard.
Q: If someone is interested in donating to the UHHM building fund, what are the ways in which they can give even if they don't have much money?
A: The best way to give to the museum’s building fund, is to write a check directly to the Universal Hip Hop Museum and send it to PO Box 6001 Bronx NY 10461. Facebook now allows friends of the UHHM to setup their own personal fundraising page that allows them to recruit their friends and family members to support their personal fundraiser for the museum. People can also go directly to the www.uhhm.org and make a donation from our website.
ROCKY BUCANO IS THE EXECUTIVE DIRECTOR OF THE UNIVERSAL HIP HOP MUSEUM, SLATED TO OPEN IN 2022. THE FUNDRAISING CAMPAIGN THAT THE UNIVERSAL HIP HOP MUSEUM IS UTILIZING IS AN EXAMPLE OF WAYS ENTREPRENEURS CAN FUND THEIR OWN PROJECTS