Jeff Ponchick Founder Of Repost Network, Sold To SoundCloud, How The Music Rights Industry Works Online

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…went to Amplifi La Great, people said, La Venice, beach based accelerator, incubator, and you know, they I saw with them and they’re like this is great, like you have a demand curve, like you’ve no idea how many people come to us. It’s just a person with a pitch deck, you know, like you have a business here, and I’m like yeah, totally, I just need a couple hundred thousand bucks to get this engineer full time and, you know, like build this out, and they thankfully did it. And then, yeah, I think with repost we ended up raising in our first year maybe five hundred k something like that total, maybe a little less, and then we always focus. But I think culturally for us, you know, the focus was very much like, you know, we’re here to make artists money and if we can’t make money ourselves, we shouldn’t exist, right. And there’s like me, the ton of competitors would just raise like United Masters had raise like seventy million dollars in google standard raised like fifteen million dollars from like beings, every manager in the music industry, and we were just these like little little guys. But we were like no, we don’t want to go that route, we don’t want to go into a series a, we want to like make money for artists. And so, you know, I would say after year one we were profitable and it was probably maybe a team of like for people full time. And I want to say when I say profitable, I mean like ramen profitable, you know. But yeah, it was. It was a little rough that first like year and a half, to be okay completely honest. Yeah, so, if we wish for it all the way to the point we’re actually being acquired by soundcloud more than Ram and profitable at that point. So what made you consider getting acquired, making the sale? And, you know, did you even see that as an endpoint prior to soundcloud? Maybe, I don’t know. WHO approached to there. But was your vision actually to take it yourself to a hundreds of millions a year in revenue? Or is the case you’re happy because you get to work with a company and then they came along at the right time? Yeah, look, soundcloud was always like a very natural fit right and soundcloud had had a change in leadership. So Carrie trainer and Mike Weisman came in about three, three and a half years ago recapitalize the business. The original founders stepped down. They’re very much change management, and so soundcloud was heading in like, from my opinion, like a really good direction, as being like a growing, sustainable, like raw rago go creator Type Company. So to me that was kind of like in the back of my head always the dream. But Yeah, look, the reason to sell? We don’t want to sell, we’d like to me and Joey like we loved it, we did it was it. You know, we’re changing artist lives. Is incredibly fulfilling. But when ended up happening is, I think in summer of two thousand and eighteen, the distribution space got hot. Our space got hot. So spotify did a big private AC reveal with distro kid apple acquire another one of our competitors, platoon, and so my phone just started ringing off the hook right from people in private equity and music platforms, and name it. Some of the biggest companies in the world own music platforms, by the way. So you know, when Amazon calls you, it’s like Whoa you know, and then you know also like major rights soldiers and record labels, and so, you know, we had to make a business decision which was, you know, either we go out and we run a process to raise some capital or cell or we stand the risk of being the last person of the dance without a day and all of our competition is way more as a bigger war chest than us. And the other part two is, you know, we’re not we’re not stupid or naive. You know, if they’re talking to us, they’re also talking to our competitors, right, because the space is hot. So we ran a formal process and it was it wasn’t initially to sell, but very quickly all the conversations went right to that. And so yeah, so you know, we ran a process to see what we could get, and soundclub came to the table and it wasn’t our only option, but you know, we felt that, you know, for the team we built, for what we feel like we need to have to feel fulfilled in our work, that sound club was the best cultural fit because, you know, they are tech company in music, right. I think you go to a major label, you know they might not respect the Techt aves much. But you know, maybe that’s not the case. I don’t know, but that was my assumption. And you know, if you look at all the music platforms that are out there, maybe excluding youtube, you know it, and Youtube is in very music. POCO use. Music’s a big focus for youtube. Excusing, but it’s not like the focus. It’s kind of like the number one platform for independent creators and our mission of helping artists make a living through their audiences online could really be amplified through the scale and the data and information that exists on the soundclub platform. And so it was kind of just like, once you kind of got to no carry and Mike, we were really impressed with them too as leaders and we felt like also we can learn a lot from them. Personally in the team could learn a lot. It was a good culture fit and it felt like it was a one plus one equals five investment thesis. And so, you know, two years later, I’m very happy with the decision. You know, we’re helping more readers in or before and I’m learning a lot and it’s interesting. You go from like I want to learn to be a start a pounder.

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