If someone wanted to invest 10G into your project what kind of contract

[LDB]

What type of contract would you make with this person? It'll only be for one project.

 

[Hi-Lo]

whatever you do, be super careful with your publishing man. upfront payments are nice and all but if you think the project has a chance of getting good airplay or royalties, make sure your publishing is in order. creative control is another thing to consider, if they're asking for that, just make sure they have a good track record.

 

[LDB]

whatever you do, be super careful with your publishing man. upfront payments are nice and all but if you think the project has a chance of getting good airplay or royalties, make sure your publishing is in order. creative control is another thing to consider, if they're asking for that, just make sure they have a good track record.

it's just somebody that wants to invest financially..they know nothing about the business and I definitely know not to let unnecessary peeps get a cut of the publishing....that's a moot point!

 

[Agent Smith]

make sure you know what they want in return..."donation" implies no strings attatched. "investment" implies that they want something in return. all i can think of besides publishing is make sure you discuss that.

 

[2GooD Productions]

It all depends on the strings that come attacthed to the money, if its purely to promote a project and get it published and distributed, then surely the donator is looking at it like an investment and looks to get a return on his investment. when it comes to "negotiating" a contract you want to try to get the best deal for yourself.
sometimes its a balance of do you need the publicity bad enough to take a few knocks on the contract.
lots of publishing companies like to hold the rights to your music forever, this is not a good deal and a get out clause would be wise, say if you part company with the publisher then after a term of say 5 yrs the rights are returned to you. the 5 years is there to give the publisher a chance to recoup their investment.
when negotiating a contract make sure it states the donators promises to you, and not just yours to him.
it really does depend on the donator and their intent.

 

[Relic]

Id see if you can put it all towards booze...

 

[Hi-Lo]

it's just somebody that wants to invest financially..they know nothing about the business and I definitely know not to let unnecessary peeps get a cut of the publishing....that's a moot point!

that seems kind of strange. dude wants to throw 10k at something with no backend, and knows nothing about the business. haha you either found everyone's dream investor or someone who is going to change the terms when contracts are about to get signed. just be aware that people who invest love to change terms when they've got you amped for that money and contracts are about to go down.

as far as pub goes i'm glad you have that part of the game down man but many at our level don't. i know some people who have absolutely fucked themselves financially because of publishing issues, and the funny thing is no 2 cases are ever exactly the same. investors are very good at finding different ways to word things and can be very very good at sneaking language into a contract that you don't even understand. just make sure you got a gangster ass lawyer and you'll be good. congrats on gettin that kind of attention btw.

 

[LDB]

Whoa....u guys are looking way to far into this..lol..it's nothing like you think. This is not about publishing or anything like that. It's a friend with 10G's to invest. If you've never been faced with this situation I understand. I have an Associates degree in music and Entertainment management so I don't need a run down on the business so to speak.

This is a friend who see's me going hard, just got 30G back from his 401k and wants in just in case we get a deal. I was thinking maybe somebody here has been in this position before. If you've been here before you maybe you could give some suggestions on what part of the project to let him in on. Of course he's looking for a return on his invest....who wouldn't be?


Anyway....if you've been in this situation holla....if not I'll eventually figure out what type of contract to secure the investment.

Appreciate all the replies!

Id see if you can put it all towards booze...

U can tell when it's the weekend! This dude here stays thinking and drinking booze! Your life's not that bad Relic..no need to drown all your sorrows in the bottle.

Didn't u say u were getting your daughter? Get out the house man...do something with your kid! lmbao

 

[trez260]

sounds like the contract would need to be drawn up between the both of you. establish and agree on all the terms involved, and have a contract written up stating what yall have agreed to, yall sign and have it notorized, and each have a copy. i maybe misunderstanding your question, but from what it sounds like, it seems pretty cut and dry, and yall just need to have a contract written up.

 

[Hi-Lo]

if its a friend, you can definitely disregard some of what i said but what i would say, from personal experience, is make sure the contract is drawn up well, not even so much to protect yourself but to protect the friendship. what i mean is, make sure he understands and signs off on the fact that no matter how good a music project may be you can never guarantee success in this business. but aside from that i mean, i don't know the particulars of your situation, but i don't think you need anything unusual in the contract. just make sure whoever draws it up on your side puts something in there about there not being a guarantee of a return on investment. good luck man-

 

[shadeed]

What type of contract would you make with this person? It'll only be for one project.

Getting projects started using other people's money is definitely something I do quite a bit. I'm glad you clarified that it's 401k money, because if it was Trap money or Mob money, I would have to give a different set of rules and advice, that's a whole nother ballgame right there (lol).

First things first, I would make sure our agreement is a legal notarized document-
Not to say you wouldn't think to take this step, but the fact that he's your homie
makes me add that point.

Is the project a CD release? (Project could mean DVD, Magazine, or whatever)

What is the range of cash that you plan to generate from this profit? That's a big determining factor towards how fast you could pay your homie back.

Me personally, I would structure the contract so that the terms clearly indicate that your investor would be re-paid solely from the sales of that project. This also means, you gotta move a lotta product to cover overhead expenses + pay him or her back.

There's a number of ways to do break the payment down:

For every CD sold through consignment (that way you have an actual record, out the trunk can't be accounted for) he/she gets a cut of those in-store sales.

You can also include a percentage of show $$$$ if you're doing shows like that. I would break the investor off 5% of every paid show.

You can also include merchandise - For every Lil' Drama Boi t-shirt sold, investor ______
would receive $.75


*Free Advice - When you get your first big payment from the project, hit your investor off FIRST - a lotta people make the mistake of trying to cover overhead first, and pay investors last. If you can gain the confidence of investors early, and they can SEE that money is coming from it, then they'll double up for the next project.

I don't wanna type a book report, so hit me up on PM if you want more specific details -

 

[Vice]

Getting projects started using other people's money is definitely something I do quite a bit. I'm glad you clarified that it's 401k money, because if it was Trap money or Mob money, I would have to give a different set of rules and advice, that's a whole nother ballgame right there (lol).

First things first, I would make sure our agreement is a legal notarized document-
Not to say you wouldn't think to take this step, but the fact that he's your homie
makes me add that point.

Is the project a CD release? (Project could mean DVD, Magazine, or whatever)

What is the range of cash that you plan to generate from this profit? That's a big determining factor towards how fast you could pay your homie back.

Me personally, I would structure the contract so that the terms clearly indicate that your investor would be re-paid solely from the sales of that project. This also means, you gotta move a lotta product to cover overhead expenses + pay him or her back.

There's a number of ways to do break the payment down:

For every CD sold through consignment (that way you have an actual record, out the trunk can't be accounted for) he/she gets a cut of those in-store sales.

You can also include a percentage of show $$$$ if you're doing shows like that. I would break the investor off 5% of every paid show.

You can also include merchandise - For every Lil' Drama Boi t-shirt sold, investor ______
would receive $.75


*Free Advice - When you get your first big payment from the project, hit your investor off FIRST - a lotta people make the mistake of trying to cover overhead first, and pay investors last. If you can gain the confidence of investors early, and they can SEE that money is coming from it, then they'll double up for the next project.

I don't wanna type a book report, so hit me up on PM if you want more specific details -

damn man, You straight broke it down! Good looks.

 

[eldiablo]

if you put a gat in his mouth, no contracts needed!!