Bridging Creative Financing Gaps with Music Tech Europe Academy

We don't have enough music tech investors today. The problem is that we get 200 pitch tech per week and we get one on music tech every two months. And also because we get only 20 per year or 200 per year, I don't know, we cannot really have someone specialized in that. So in fact, he was saying we would like to do more in music because our experience was very good and we would like to do it again and use our contacts, etc. But we don't get many pitch tech. And because of that, we don't really have someone specialized. This episode is a partnership episode with Music Tech Group Academy.

They are opening their call for the Accelerator Program for Music. Today, I'm talking with Thierry. We're talking about investment in music startups. It's incredibly interesting to hear what he has to say with his 20-year experience in investing in music and the creative arts. Hi, guys, and welcome back to the Sound Connections podcast. Today, I'm very lucky. Thierry, welcome to the podcast. Hello, everybody. Thank you for inviting me. The first time I interviewed you, I also put your names.

I think it's difficult for me. But Thierry, you're here because we have a partnership episode with the Music Tech Group Academy, which is a really interesting Accelerator Program within Music Tech. And Thierry, we have talked before in a different episode. People go look at the podcast from the WISE conference. But Thierry, for people who don't know who you are and what this investor episode, partnership episode is about, who are you and what do you do? Thank you. Yes. Well, you know, I can say quite a lot about what I did, but I would say that I've been a kind of financing expert for the last 25 years.

And currently, I've been working for this acceleration program for Music Tech in charge of the financing, the funding, because I'm the managing director of a pan-European investment network called MediaDeals. We're based in Berlin, even though, as you can hear, I'm French, but based in Berlin for many years. And second hat I'm carrying is I'm also co-founder of a company called Spielfabrik that is basically doing something a bit similar, but in the video game section.

But my focus is really only about funding, investment, financing, all around that for startups in the creative sector. So that's basically my expertise. Yeah. And I think there's a lot of people interested in that expertise because music and the creative industries is a specific thing. And there's not a lot of investors that has the long experience with it. But how did you get into investing in this space? What's been your career path?

Okay. I mean, basically, I come from the film industry. I've been working for a long time in the film industry, but especially about film financing. In fact, I've never produced or do anything else. I've been always into financing of films. I work for quite big companies, Canal+, Vivendi, and different studios, Universal Studios in Los Angeles and Babelsberg Studios in Berlin. That's why I came to Berlin. So really about always how to get the best type of financing for creative projects.

So helping creative minds, creative producers, people who have something really interested to do, to develop, and helping them to get the right finance, I would say, and relevant financing, and also something that could work together. So most of the time in film finance, you need to put lots of pieces together to make it work. So that's what I did for many years. And now about 10, 15 years ago, I was very interested to look more into private funding because in the film industry, as some of you know, we're looking a lot at public funding.

And the question was always the same. Okay, great, we have public funding, et cetera, but we cannot finance everything like that. So we always looked at where can we find private finance. And that's how I started to look into private financing, private investors, to go into film first. And that's when I started, as I said, 15 years ago. But I did that and started to do that. In fact, quite a lot in Norway. Oh, really? And then after a while, I mean, it was quite difficult, as you can imagine.

And many of the investors had working with me or trying to work with me. Basically, at some point, they were saying to me, well, in fact, you know, we're not so interested in projects, but we are more interested in companies, in startups. And film is quite difficult. I'm not going to go into that because it's going to be too long story. And I'm not sure it's so interesting for our audience. But basically, we would like to look at other creative sectors. And so I had a little bit of past in music. And also, so I was very interested in that.

So I started to open basically my network to more investment companies in startups and open it, let's say, to audiovisual and music industry and slowly after that on gaming. So it's always about looking for alternative ways of financing creative startups that are, let's say, are different, specific, as you say. Also, there is a lot of competition from other sectors. And in the last 20 years, it's been a lot about technology and not less, but also not only about content, about, you know, stories, et cetera, which, of course, are still very important.

But technology is getting more and more important. And obviously, as well, the investors that, you know, were in the network or in the network or interested to join, most of the time, these people made money through technology, through work they did, you know, startup they sold or companies they sold, et cetera. So most of the time, and it's, of course, we're internet generation, et cetera. So most of the time, these people had a strong background in technology and, therefore, where most of them, I would say, are interested in content as well, but they base their investment decision or, you know, analysis a lot on technology.

So suddenly around, along these years, you know, this idea of content technology came together. And, yeah, and today, as you know, this is something very, very important, even on the content side. I mean, it's more and more, you know, companies who are doing content, they are also based on specific technology or develop their own technology. So coming from really film finance content, very strongly content focused, to something that is much more balanced now on technology investment with some content, with some nice stories, which is always nice to have.

It's interesting. And we'll dive much more into that and sort of what challenges you've met through it because I can imagine there have been many. Just, you know, I'm not that old myself and my career is still relatively fresh, but, like, I hear all the time how that's been a journey the last 20 years for, like, music tech investments, ups and downs, a lot of downs, a lot of disappointments. So we'll go into that. But let's talk about Music Tech Europe Academy because this is an incredibly interesting initiative that, to my knowledge, have existed for two years now. This is the second cohort that we go into.

Could you describe more about that acceleration program, that initiative? Yes, sure. I mean, this is a program that, in fact, I started to imagine a few years ago and I came to our main partner and a nice partner in Milan, the Music Innovation Hub. to develop that. I mean, basically, the idea is to professionalize startups from the music tech industry that needs support in getting investment, but also getting onto the market, getting their product ready, etc.

So it's really helping them to do that. So, I mean, the idea behind it was to say, okay, we have some very good, interesting ideas, concepts in Europe, but most of them, a lot of them are lacking this kind of business support to go to the next level and to be able to raise the money or to have the traction to be able to be interesting on the market. So that's what we decided to do with also different partners for this cohort.

So we have especially communication marketing partners that we have in Barcelona, but also in Athens that are helping us as well to better communicate and to reach more people. And also what we've decided to add this year, which is we think and we see that is very important, is a technology partner based in Luxembourg, which is a incubator and a cluster in Luxembourg, focusing on technology, really to help these music tech startups to also make sure that their technology is really up to date or access to new technology, etc.

So the idea is really helping them on all the different facets, I mean, go to market, how to develop traction, how to develop the right technology, how to develop the right financing strategy and communicate to the right people. But the reason why we created that and we were very happy to hear that the European Commission was very interested in the concept in helping this music startup to move along. And yeah, it's been financed partly financed by the European Commission and at the moment, we still have two years to go on that and hopefully we will continue after that.

So that's a little bit of a story behind the Music Tech Europe Academy. because, okay, so I know sort of the backstory quite deep and I know a lot of people involved and the people involved are amazing music people. But what is it that differentiates Music Tech Europe Academy as a music tech investor from, let's say, a normal acceleration program? Well, first, we are specific. I mean, we are really on this vertical about music tech and, of course, we see that many people joining us for the program, they are coming from more generalist, beta acceleration programs.

Obviously, we focus really on that and, of course, the mentors, etc. that we have are people coming from the industry and really focusing on the industry. So that's definitely one important point. The second one is that we are definitely pan-European. So we are getting people from everywhere in Europe because of the European Commission but also because we are very interested in getting different startups from different parts of Europe and it helps, I would say, also many startups for countries where maybe it's more difficult where for, you know, but the ecosystem is less developed or, you know, so either, let's say, smaller countries or especially in the south of Europe, sometimes it's quite difficult to access this kind of expertise.

I think in the north, you know, in Sweden, for example, you have a lot of experts in music but I don't know if you, I don't want to say something too bad for South but I don't know if you come from Greece, maybe it's a little bit more difficult to find the right expert. I'm saying that but our partner is from Greece and he's definitely there are lots of very nice experts there and very good experts so that's definitely not the right example. So, yeah, should have taken another country but that's the idea and that's what we wanted to do as well with this European project was to be able to bring this expertise and this support to people in different countries at different levels of support.

So, that's the second thing is that it's definitely very international and then obviously the third part is that it's a mentoring program but really focused on different points so as I say finance, communication, technology so people have mentors and they go really through details and they have their own mentors plus they can have access to other types of mentors but so it's very made to measure basically to make sure that it's adapted to their needs so at the beginning we do an important assessment of what they need what are they looking for I mean not just what they would like to but also what really is needed we think and then we help them to access the right mentors that we have in our group so we have let's say a first level of core mentors you know from different parts like me on the finance and then we start working with them and then based on that we can help them

to go to someone more specialized in a specific thing if someone wants more equity or someone wants more I don't know crowdfunding or you know public funding etc we can bring them to that so it's really adapted to their needs so it's not you know a rigid format where okay you go there and you have that and that's it so I think that's about that amazing and I think especially the comment of sort of this being supplemented to companies that might have gone through other general accelerators like I've felt in my the companies that we own in Amplitude like where we've had companies going through very amazing exploration programs but standing at the other end like well that was great training but like this is my thing this niche that I'm working on and none of the mentors that you can provide can give me a holistic overview of what I do like one of our companies work with sort of said the API integration and blockchain that has a cool backstory but like going into exploration programs like yeah we can get a blockchain guy fine

but he doesn't understand data tokenization for artists and sometimes if you're able to just play music guy he doesn't understand like the other technical aspects so having a place where you can go super niche like this is my specific product because also in my own commentary I believe a lot of the most interesting startups right now are incredibly niche in the music industry like it's these big ecosystem ideas can probably be a bit more difficult for founders to really get off the ground for many different specific reasons I have a lot of opinions on but having this specialized thing is important you're also filling a gap because these offerings are not really around that many places as far as I know as far as I've counted I've found like six or seven globally like relatively similar offerings with each different perspective but that's it like that's what I've been able to find yeah and also not so much in Europe I think in the US there are

more but in Europe but it I mean in a way it's logical I mean as we know Europe is very fragmented different you know different countries different languages different habits etc so that's also a strong point is that we will we want to work with different local incubators accelerators generalist are not generalist but normally quite a lot are generalist and you know that we say to them okay who in your cohort is more interested to go to go deeper of course but also going more international because obviously as I say it's pan-European so that means they meet mentors from all the other countries they meet other startups from other countries so it's also a very good way to understand what's happening in the other countries to understand markets I mean suddenly when they change you know they say okay I'm from Spain I can tell you your project could work or not work in Spain because of that and it's something that you don't have in a local incubator

that is by definition local and of course there are let's say points that are not so positive in what you know in such an acceleration because obviously we I would say the main point that I'm missing is that of course we are not very close to the startup because they are all over the place so we meet them regularly and we meet them a lot online even though we have also on-site meetings of course but we meeting them online and so of course it's not the same I mean if you have a local incubator and every morning you see them they tell you they tell you about the problem they had yesterday or what they have in mind and it's not always what we get we get more like you know not long term but mid term challenges and questions so it's a little bit different but I think we are very complementary and we should be complementary to the local accelerator and incubator I mean we cannot replace them because we don't know the people locally okay so locally these people should help

these people to grow to set up to set up their company to set up their structure and being ready to work and also to start having a feel about how ambitious they want to be because I think you know when we talk about startup I mean I see a lot of startup like you like ACI Cup you know very often one of the first questions is really what is your ambition with each project and you get very different answers I mean some from them their ambition is to do something quite successful for them but locally or yeah and some other people they want to do something big etc but to ask them the question which is the same thing as what is success for the creative companies you get really different approach and different answers to that and for me it's one of the points because of course as you know we invest mostly in people and how ambitious and what

how do they do they see their success and I think again nothing is wrong it's just it has to you know we're talking about identity that's something that I'm very interested always is to understand what is the raison d'etre you know what do you want to do what do you who are you so if you if you have this kind of ambition don't try to get the biggest ambition it's fine and you will be successful within this ambition but that needs to be clear and sometimes there are some discrepancies basically people are like that and think something else or heard about something else and that's where it doesn't work and then they really have trouble for example raise money because people who invest understand more that or have some experience in that and see the discrepancy and say okay the product is great but the people behind it don't understand exactly where I should go so that's there's a lot of layers to it but let's

let's get to the basics is music a good place to invest oh god that's an interesting question I think it's a sector that is interesting to invest yes but like any sector I would say you have some good things and some projects that are not so good I didn't mention that in the past I also did some work in music more in for example in content in IP in investment in IP for film music for example what I did and it was very interesting and definitely it was an interesting investment part on that it was very specific and I think that's also one of the points you need to be very specific I've moved to as I explained moved to more tech so music tech so moving from music to tech from content to more technology because I think on music this is very important

and I mean of course the music and the content is still the most important I would say but yeah the way you know all this sector is organized structured and how it works etc definitely it needs technology and it's been now developed for a while and we see some very interesting companies that have been very successful in the technology the platforms etc have changed many things so I still think that it's something very interesting to do the difficult question and every time we meet at Music Tech Europe Academy we are discussing a bit that is that there are a lot of gaps that need to be changed within the ecosystem and the value chain etc but quite small things that need to be better organized and better structured so that's

one thing or do we need really something very different and you know something that will change completely the way music is organized today and that's why every year I think it's exciting to see to have a little bit of the pulse of what startups are thinking about that so are they trying to solve some part of the value chain you know saying okay this is not working I've created a software I've created an app etc to solve this problem or do we have people who really want to change things which is not easy but who have a vision and ambition to change different things and I would say this year for example we have people more looking at smaller parts of the value chain to change but we are interested to see what will be the next cohort and in which direction it goes because I think

it's a lot about that I mean we know that people who disrupted sectors are often people who are not from the sector Uber and many cases people from outside who disrupted and today we are obviously many people who are I mean most of the people who apply to a program are coming from music so it would be I mean I would be very interested to see people outside the music or not so much a big background in music to apply and to see how they can do that what was interesting the first year we did was in fact during we're doing the COVID that was the first year and then we had a smaller break what was interesting is because of the COVID and everything was down on music on live etc the startups were really looking at trying more

to how to use this music technology in other sectors but were not so affected by the COVID and I thought that was interesting it was not easy and it was a big surprise at least for me but it was it was interesting to really think about that to say okay because music is everywhere so I mean not to all of you know that but it's everywhere and it's cross platform you know you have that in film you have in many things games etc and of course in life all the time so in fact it's everywhere but still today it's developed very segmented approach and I mean silo approach and I think I'm very interested in this idea of cross sector definitely in general because I think there are some new business models

or new ways to develop to get funding or to get revenues from this cross sector thing and I still think today it's not so it's not happening so fast no it's definitely I think for me it feels like it's a slow moving field there's definitely important things happening Music Tech Europe Academy is one of the pieces in that but it's also we come from I think a very complex incentive differentiation in music if I can give my own commentary on it because when you think about music as a traditional let's call it IP or it can be a promotional company it can be a management when you talk about investors or acquisition it comes from a sort of top line perspective that normally usually that's how I see it so there comes let's say a private equity company or someone under that say okay we want to invest in it's called live promotion or festivals they're looking at festivals that can become very quickly profitable and then whatever top line revenue they have there's a multiple associated to that so it's

basically as I see it's like can we acquire something with the purpose of bringing revenue and profits into what we do and then maybe sell it off later where tech in general is fundamentally different there's more of a there's more of a it's called a speculative approach to it like you know it's not we don't only invest in you know hugely profitable companies it's like it's the companies that have potential to scale to one point have value in whatever eyes of the beholder that is but then can be sold so there's like a multiple associated to it that's not directly related to how profitable and how successful the company is so those two worlds I believe can be incredibly confusing for people who's trying to get into music as an investment object because they're not that differentiated in how we communicate it but I know also music tech plays in the same environment as other tech which means it's on a level plumbing field with let's call it

more healthier ecosystem from an investment standpoint but it still has the branding of music yeah that's definitely one of the challenge I mean to come back to what you say I mean to be honest I don't think any venture capital will invest in festival or things like that no I mean and again I mean there are exceptions etc but most of the venture capital or private investors are interested not really in making money with a project but more like developing scale it and you know sell it or do a list or go to the series A or B or something like that so yes it's a big problem because we are in the same music field but we are completely different and for me it takes a lot of time to explain to people about what we're talking about and as you say we are more on the technology side than the music side that's why I was also mentioning this thing during the COVID is that at the end

the companies we had where most of me they were coming from music because we started the application before the COVID so people came and during the COVID people suddenly said okay we should do some I mean what we do is applicable to other sectors yeah but yes as you say the problem is as long as soon as you talk about technology you are in competition with many other sectors health tech deep tech et cetera that as you say are healthier or maybe more so I think it's a lot about it's complex but it's a lot about starting from a sector that everybody knows and then you close to it for example the health sector not everybody knows that or understand that but everybody is listening to music so everybody understands that or understand knows that and see that it's something that is could be pure but it's explaining that it can go beyond just music so that's

why the cross sector thing is very important I was talking this morning to a startup from game and I mean technology for game and basically at the end he said well you know we could apply this technology to music and to film and so I think that's really the idea is to start from music and there are lots to be done but yes in terms of scalability it's possible that at some point you need to move or you need to adapt it to other sectors but yes it's one of the complexity that you were saying is that on one side it's linked to content to music and as you say to music label to artists to festivals etc.

that are in fact very far it's still in music but very far from the type of investment or the type of how people invest and it's also close to technology where people have more habits or better understand in terms of investment but it's in a specific sector that they don't really understand that makes it quite complicated as I say I'm used to it because that's unfortunately what I've chosen to do for 25 years is always to work between things that are a bit content and people like film or game but at the same time touches other things at the same time I think that makes us different from the other typical tech company I mean every time we talk to investors either in film or music or game I mean at some

point you discover that they are music fans or it's really something interesting for them so I think this point is a very important point and to be honest today I don't think we know very well how to play with it I think film is better to play with it for example I mean you invite people at Cannes Berlinale and people are quite happy about that because you have this kind of music I think we could do more and in gaming it's definitely needs to be much more done it's not done yet but I must say I have to say this content touch is I think is playing a role you know I'm doing quite a lot of capacity building for investors that are not from music and at the end the people who are interested or want to look at is because they like music and they are interested to be part of it for different reasons they like it they want to be

involved in it they would like it to be improved but there is something about it when you go for other technology that are maybe not so related to personal questions people are doing that just on the mode side on the tech side I think in our sector which is what is nice is that this part last time we talked in person we were actually sharing theories about investment for hours in Berlin which was very fun and I won't get into those talks but I have a new theory for you that I would like to try with you and it might not be right but I've been trying to think okay so from an investor outside of that industry and we would say hey you need to invest in music tech and what would be the advantage for them to invest in music tech compared to other industries and this is my take on it there's a now scenario and then there's a future scenario and the

Now scenario as I see it from the most natural augmentation is one it's a diverse investment the same way they need to say that for example IP rights if that hypnosis or the longest exchange is a diverse asset class then music is a diverse investment in an industry that might be a small part of your portfolio that could be interesting and the second thing is that it has a cultural emotional historical impact as a product that's attractive I believe there's many more of these things to be explained but I think that's the narrative that's present right now that you easily can tell people and they can understand but there's a future and I have my own theories and I won't get into that now but do you also do you believe that's what people understand now or is that where we are when it comes to let's see general investors come into the market is that the advantage they see yeah no good question I'm not completely sure I mean of course it's

All about exceptions of course you will always find someone who will say to you yeah that's but for example this diversity thing I've been playing that for many years it's not working really well okay yeah I'm not completely sure because at the end even if it's a small investment I mean as you know people work in portfolios so each of the projects should be able to make some money and for everybody or for a big part I would say so even if it's diversity you know it means okay we are doing that but we know from being that it's not going to be big so I'm not sure it's about diversity what could help is that they co-invest with someone which is core investment expertise that I think could be good to say I mean could be something that work to say okay you know my 10th investment okay I'm doing it with someone who is really specialized in

This sector and okay is this diversification but it's not just myself on my own and things but it's good so I think that's that and the second thing about the content side sorry you wanted to say something no I'll get it's what is really interesting about that comment is when you say co-invest which I definitely agree on because like having domain expertise to do due diligence and sort make a evaluation based on that potential is important one of the advice I give to a lot of startups we work with is I say especially if it's on a pre-C level like from a statistical standpoint where you are right now music investors don't exist like they do but in your case they count them out because there's too few in C level it's a bit different so but the point you're saying with having a strong value proposition for investors to co-invest with a domain expertise investor absolutely true but because there's so few of them that's also a difficult environment to navigate in right yes but still they are I mean

Okay so that's another point that is very interesting there are investment in the music tech sector there are not as many as in other sectors that's for sure but there are some so the question is how to this investment that are done at the moment and that is there is no place today where we could see okay at the moment for this startup there are a couple of investors interested and understand that and they are still looking for something I mean you find that when you have people pitching and they say yeah we've raised already half and we for the rest so you can do that but it's like that it's not really automatized but so that's something that I think would be interesting to do and ways to access people who are not from the sectors and bring them and becoming more and more specialists on that and the

Second point about the content and etc I mean as I say I think it plays a role but I don't think we play it well at the moment I see for example with our court on one side yes it's music but of course what we're trying to say to them is not just about music it's about other sectors or other ways to use it and we try to play it not down but the difficulty with music as well is that it's another difficulty is that it's relatively quite a small sector compared to other sectors so the problem is to play it when we talk about market etc market size etc to people the music market is not very big I mean if you talk to a guy who is involved in other type of technology so again in

Health tech or something like that I mean the market is very small compared to it so it's not very attractive so you need to talk about it because you're coming from there but you have to show them that it can be with other sectors and it can be much bigger so it's very tricky to make it work but isn't also because in my opinion founders they try to compare themselves on the same metrics as other tech startups which I believe can be very difficult because one of the things that other tech startups especially from American perspective is this chase of being a unicorn right like not just about the unicorn but the idea of like insane multiples and insane like exits my fear is Tyrion and I've said a few times in a podcast and I might be wrong is that I believe that as things are right now as I analyze it is generally speaking music

Tech has lower valuations compared to where they are to other industry comparables they also have lower sales prices in acquisition but what they do have which is beneficial is that they have similar multiples and they have when it comes to low but and they also have relatively fast acquisitions like it's a space where if you're successful you can get acquired relatively fast which means from a specific portfolio strategy and if multiple plus speed is a factor that's interesting that could fit into that portfolio strategy so that's sort of what I see right now I think you're right and I think it's generally something for the creative industry which is you put that it's one of the benefits is that it can be quicker than other sectors definitely because the markets are changing very quickly so people say okay I need to buy this company I need to develop this product now

Because in one year something is going to be different so I mean definitely I think it's interesting and I agree with you I think valuation is lower but yeah there are some interesting things to be done and again it's back to what I said are you interconnected to what is available today in the value chain are you trying to fit into that or are you trying to change one big part or the whole part completely and try to do something different which is not easy but when you see other sectors it happened so but yes it's a sector that so yeah sorry I just wanted to come back to one point because we as you know I mean maybe not everybody know but inside the Music Tech Europe Academy what we do is we do closed meetings between investors where we discuss about the sector and but between ourselves between not with companies

Sometimes some are pitching one or two but we stay in a closed door online closed door to discuss a little bit of market etc and to understand what's the appetite for music tech investment and what they think etc and we most of the time we bring people from specialists and people who are not specialists with a couple so to understand a little bit that and also to create connection for people you last year we had something really interesting from people they said one of the venture capital which is quite a big venture capital and they did one investment in music in the past which has been very successful but they said yes we did just one and he said yeah that's a bit strange in a way and then we were discussing etc and he said the problem is that we get I don't remember 200 picture

Deck per week and we get one on music deck every two months so we don't see so many so obviously we don't invest in many and also because we get only maybe exaggerating but maybe because we get only 20 per year or 200 per year I don't know we cannot really have someone specialized in that because we don't get that so often so in fact he was saying we would like to do more in music because our experience was very good and we would like to do it again and use our contacts etc but we don't get many pitch tech and because of that we don't really have someone specialized so we don't really do it so that's also interesting you have a few people that are specialized but in fact the other ones and you would be very surprised how many of this venture capital are joining our

Group last time as well we had that says yeah we did one and it was good like you said multiple are good and it was good we'd like to do more but we don't really have access to these people and not enough to be able to create an expertise about it that's incredibly interesting that this is why it's so interesting to speak with investor with your background which again what I see you as really good at is sort of the network thing combined with the investor hat is understanding many there's a lot of VCs that don't understand other VCs like it's a relatively siloed environment but your role is having this sort of understanding could you elaborate on this is the first time I actually hear that precise please explain it a bit more it's really interesting well to be honest I don't know what's the next step on that I mean I think we I mean for example of course the acceleration program that we provide is to say to them okay we can

Provide you know this year we had 10 people or 9 or 10 startups this year so we can provide you people that are qualified I mean qualified and went through the acceleration program that has been selected out of I don't know how many people so that we can bring to you people with some expertise so that could be interesting but still the point is that they don't really have the expertise internally so it's really about I mean again it's really about the syndicate story I was talking before about where can we get a project that already co-funded or with someone who understand the sector or through an accelerator like that and then being able to jump on it with some expertise but having the expertise to re-over people but it's really about yeah it's creating this network this kind of access to this information and it's not so easy to

Do I mean we also we do that regularly I mean we do so I think three in the nine months we do three meetings with investors and for example it's really stupid but it's very difficult to get the same people every time I mean it's other people so we start from scratch you know it's very it's not very often that we have the same people or a few people coming so we that's something that I've for example have been creating in film or gaming and still haven't made it in music tech is to create like really a structured network so that we have people and then you know we can base on that and they can be they can exchange about projects etc and again it's for the same reason it's that they are not specialized in music tech so they don't really have time for that and when we ask them to join they say well yeah it's going to be a bit like last time you know we which is also

One of the not the issue but one of the question when we talk to investors in general and especially non-expert investors is that on one side they want to discuss with other people to get knowledge to understand better but they want to see pitches they want to see you know concrete concretely okay who are these people and what sort of project do we have etc so it's a mix of that and so that's fine but the problem is to find good projects find good projects who are ready for investment and it's not many and it takes time and so that's for example my job at the Music Tech Europe Academy you know at the end we took ten you know after six months discussion just a few very few are basically ready for investment I mean the and the problem of course they all

Think that they are ready for investment they all think they need investment and my role which is not nice always is to explain to them or try to explain to them that in fact equity investment is not a good idea for them either because they're not going to get it and so it's going to be a lot of effort etc because they don't have the right business model and the right ambition and all that or because they are cheaper way to finance their project in a different way and because of course it's expensive to access private equity or investor and it's difficult to understand for them because obviously they need money and they say well it doesn't matter how much it costs but there are different ways and people have difficulties to understand I mean last year we had someone for example who could have because he had already clients etc he could have a bank loan at a very good price

And I was trying to explain to him that it's much better to focus on his clients and maybe get a bit of bridge financing on the loan instead of having a private investor because it's not going to work and he was always saying yeah we break even we break even that's not interesting for investors nobody wants to have a company that breaks even already I mean that is difficult and that's my job I'll do it I'll try but people either don't listen so the problem of presenting good pitches there are some good but it's a problem as well we don't have so many at the end on that there's so many interesting layers to this one of the things that I hear because I speak about this all the time we're speaking together next week in Berlin right yeah that's right yeah we're in the same panel about music tech investment so this happens all the time and I hear a lot from the startup side which is very important

But what I don't hear as much because there's not a lot of in-depth knowledge like the one you bring right now is from the investor side so if I could just simplify a bit what you said before and have you confirm it to me is when you talk with investors in this space there is several cases or general consensus that music could be interested to invest in there's previous successful investments and the reason why those don't come again in circles is primarily based on the lack of competence or specialization to really understand the investment case and be sure that this is a good investment from our strategy like it is the specialization need it is the understanding need that generally speaking is lacking in order to make success stories come back around and feed into more investments yes of course you need the specialization but it is based on the kind of

Quantity threshold that you need if you also to be able to compare to understand what's happening in the market if you get I'm sure if you get 20 pitch deck per year on music deck there's a good chance that there are only two that could be interesting there's only two if you get 200 per week on health tech there's a good chance that there will be 20 interesting and you can start comparing and you can start understanding more the market where it goes etc so the threshold okay we're not going to suddenly create thousands of music tech startups but I think there is this and that's why one of the question I'm going much further than our discussion but is about why don't we talk more about not creative industry because nobody wants to invest

In creative industries but about digital technology for entertainment and things like that so that we can open up and again it's about cross-sectorial stories because today for example if you see for example last week it was at Gamescom in Cologne for the game I went to an investment circle with pitches etc I was a jury there and the first company came there was a music generative startup for game I mean basically I was telling him you should come to us it's a music tech project but he was coming to Gamescom to pitch because he was creating something for games so all that is very related today between game music audiovisual etc it's very related so maybe like that we could come to a certain size that is maybe more appealing to people so you don't have a music tech specialist but someone with more I mean specialist

In this kind of digital technology for that including music it's connected it's all connected and it's back to what I say with the COVID is that you know the idea was to find other ideas beyond just music sector because it was not existing I don't know it's an idea I mean of course we want something specialized so as you said at the beginning people who understand music sector but I think in terms of accessing more investors maybe we need to be a bit more broader and having people from different sectors working about music and maybe that could have more startups quality stuff so playing into if music plays into other industries that might be more familiar for investors to receive they might have a higher sense of

Due diligence and recognition of the products startups that right I mean and you know maybe you get someone an VC who had an experience in gaming and see that within the scope and understand okay that also could be applied to the gaming sector etc and could be also interesting it's really about opening because I think we are clear about that we don't have enough music tech investors today I mean at the end that's the point and all see how can we bring new people on board and yes explaining them what is music what could be interesting and it's interesting but maybe not enough if we want to get a larger group I think we need to go maybe beyond that as well while you was talking five minutes ago I had a really interesting thought so

You said that the amount of pitch that investors would receive within a certain industry let's say the music industry would also define the amount of focus they would have knowledge updated their own due diligence but also of course that will lead to specialized people over time but for example me I think this next month I'll hit around a hundred startups that I've had meetings with this year along I talk with a lot of people I'm very blessed I love it we have this consultancy arm that we help with early stage communication music tech financing but what I think is incredibly interesting about that is out of those hundred companies well I think it's 85 now I've met with this year they're so different they're so different it's everything from marketing to super fan economy to basic technologies to direct to access to direct to fans there's so many models so even within my specialization field I feel like

Sometimes when I see these cases I have a hard time doing due diligence on this specific case even I would say my domain expertise is very high this is my world and even for me a lot of these cases feel very foreign so I can just imagine from a VC or whatever investor's perspective even though it's coming from the same industry like the quality needs to be really high for them to navigate that complexity in itself wow okay but again what do you think from the 85 you saw how many are really not just investment ready but really interesting for investors how many do you think it is from 85 okay so of the point of contact when they reached out to me when I read right through the deck and what I've stood the case I would say out of those 85 I believe off the bat between three and five companies I would say you guys would be interesting for investors right now

That's right so you see so that's the problem you saw 85 companies we see more than 80 as well on the court and at the end yeah we're talking about that three to five maximum so yeah it's 10 people and there are not so many other people doing that so okay it's 20 people every year that's what I was saying if you go in health tech or deep tech you know you have hundreds but okay we I mean we cannot so change that I mean it's the way it is it's a sector that is very specific etc but that's why I'm thinking about more this cross-sectoral thing because I think there may be some common things that will be done but I think it's part of the problem I know it sounds strange but it's part of the problem because it's not so many and because of that people don't receive many and because of that they cannot create the specialization who well I get so excited because I just want to I want to just deep dive into this

Here we don't have all the time of the world this has been a brilliant talk you know I hope I hope we can talk a few more hours in Berlin next week about this and with other investors but this has been incredibly giving for me I gained some new perspective as Tyra as you might know I also researched this academically and I love it's my big passion and this gave me some new things to research so thank you but Music Tech Curve Academy is a partner of this episode we'll do a few episodes together and I really support the initiatives I'm passionate about this space I think it's so exciting also because there's so many things to be solved so as a founder myself serial founder it cannot be more exciting to look at the financing part of this industry because I have no idea how to solve it so that's the fun part and you guys play a piece in the puzzle yeah I mean again as you saw in this discussion I don't really know as well how to solve it but I think we have some parts where we can

Work on but yeah it's not easy so I mean I forgot to say that the call for application is in fact coming out next week for the new vision conference where we are together so on the 5th of September and I think it's closing I hope I'm not wrong mid October but you can see that on our website so we are looking for really startups good startups in music tech from all over Europe to apply and yeah the idea is to get really some interesting mentoring I will yeah take care of most of the people on the financing side and the investment side to discuss their project so yes if you are interested to apply for the acceleration program it's the right time now from September 5th to October 15 or 13th amazing trying to do some advertising now on that

Promotion but we'll do that at the start of the episode when you know together so that's great well Thierry this was a pleasure we'll see each other in a week's time and thank you for your insight thank you Jacob it was very nice thank you very much