A new company will give podcasters up to $50,000 to help them grow

The podcast industry is growing, but independent creators may still struggle to make money. Now, they have a new option to enter some initial cash: a company called Podfund, which launches today, will begin to make unique investments in podcasts in exchange for a portion of their income. The Podfund team has raised $ 2.3 million in its seed round, which will go towards investing in creators who believe they have the skills to build a successful podcasting business. The company defines its potential investments as "emerging media companies led by creators with podcasts as a core strategy and audience engine, brand and revenue".

The launch represents a new type of financing model. While some new platforms, such as Luminary, are paying creators to make exclusive content that is only available through certain applications, Podfund says creators are free to take their program wherever they want. If you want to sign an exclusive agreement, you can do it, but you will have to share that income with Podfund. If they want to go on tour, obtain a license from their IP, sell merchandising or operate a subscription model through Patreon or Substack, they can also do so, but Podfund will suffer a cut. A platform is only as good as the content that is in it, but Podfund is not selecting a winning platform or network. Instead, the team is looking for talent in the programs and creators who believe they have a potential for generating income.

a new company will give podcasters up to 50000 to help them grow

Image: Podfund

At the launch, the company says it has already invested in the podcast studio of Malcolm Gladwell, Pushkin Industries, which makes shows. as Revisionist History, as well as smaller creators, such as Erica Mandy and her show theNewsWorthy . Podfund wants the creators to invest in whatever they need: an editor, a producer or a team, for example. In addition to cash, Podfund also gives them access to a mentoring team across the industry, including Max Linksy, co-founder of Pineapple Street Media; Dave Ambrose, CEO of Steadfast Venture Capital; Andrew Golis, content director at WNYC; and Karo Chakhlasyan, director of operations at Chartable. Podcasters can call whoever they need to help them increase their audience, create advertising offers or consult more generally.

Podfund is run by Jake Shapiro, who is also co-founder of the RadioPublic podcast listening platform, as well as the PRX audio and technology distribution company. Shapiro began developing Podfund seriously last fall and finalized funding and structure earlier this year.

He says that in the three years that RadioPublic has existed, the team has witnessed an "evolution of the industry", in which the creators created shows. But I needed more money to grow. "[We saw a] artisanal industry of podcast creators who build small businesses," says The Verge and these creators come from all backgrounds. "We realized that, beyond equipping them on the tool side, there was a need and an opportunity to have a part of what would be capital, investment and financing resources".

The terms of the company summarize how much cash Podfund anticipates distributing, along with how much you want in return. The company says it will typically invest between $ 25,000 and $ 50,000 in a creator and, in return, the company will receive between 7 and 15 percent of the revenues of a program between three and five years. Creators can exit their revenue sharing contract at any time, which requires returning it at an increasing premium. The creators must pay 1.5 times their initial funding if they finish their contract within the first year of work with Podfund, but for the fourth year, they must pay four times the financing.

Podfund general manager Nicola Korzenko says that the investment is not a loan, and that the team will not come for a creator's house if they do not make money, but she plans to do their due diligence before committing to a loan. investment "We are going to do everything in our power to help these podcast companies succeed, and we hope they will do the same," she says. "But we understand that not all podcasts end up being a big business, so there is a quantity of that that should be taken into account in the structure of the agreement, that we know that not all will end with a happy ending, although we hope that everyone will do it. … "

Podfund looks for three main factors in a program before investing: if it is" prepared for growth ", it has" evidence of traction "and if there is some "initial." "Basically, the company wants to see some existing success, which is the way the Podfund program varies from the search for creators from other companies. Spotify previously hosted a training camp that culminated in a launch session for new creators of women of color, and Google has its own creator program that requires a "fresh and compelling" idea, but not an existing program.

Shapiro does not see other initiatives as competitors, but as part of the same ecosystem to grow the nascent industry. "The industry as a whole is still very early and is creating an infrastructure around training and professional development in different pockets of what you need as a traditional creator, so I do not worry about a competitive overlap," he says. "If anything, I think there is a much greater need." (The Google program is run by PRX, which Shapiro was one of the founders).

The big question is whether independent companies Podcasters can earn enough money not only to support themselves, but also to be a worthwhile investment. Shapiro cites Marshall Williams, the CEO of Ad Results Media, a podcasting advertising agency, as evidence that independent podcasting can support a venture company. Williams says that there are between 500 and 600 programs that receive at least 50,000 downloads per month or between 60 and 75 minutes of listening per week, with four advertising spaces included. Those programs can generate around $ 170,000 a year, he says.

To take that figure as an example, a program that makes $ 170,000 and gives Podfund 15 percent of its income would be delivering $ 25,500 a year. Given that Podfund says it will normally invest up to $ 50,000, the company will recover its cash in two years and will have the remainder of the contract term to make a profit. That could be a compelling offer for Podfund's own investors, which include Bloomberg Beta, Zelkova Ventures and TechNexus. If a podcast or network becomes a sensation and is acquired, Podfund will receive 1 percent of the total purchase price.

But Shapiro says the company is not requiring podcasters to have a high level of success when they apply. "That's not a threshold for Podfund," he says. "We are open to podcasters well below those numbers [Marshall-provided] but with the trajectory, the temperament and the right goals."

wants to see signs of success, but also wants to get in early enough so that their investment and mentoring network still weighs . Like any talent search mission, the hope is that most programs will generate enough money to keep Podfund afloat and continue investing in other programs, but also that the team will detect the diamond in the rough and possibly get a great return.

However, beyond the effort to make money, Korzenko says he expects Podfund to create a portfolio of creators who can talk to each other and navigate the industry as a kind of collective.

"I also had this dream that each of the creators we know". The bottom of the pod has complementary superpowers, "she says." And so, every member of the Podfund community has something to offer others. "

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