Music Funding 101
How Many Sponsors?
On the outset, the "how many sponsors?" question seems simple for a band to answer: "More!". Yes, having several sponsors might seem like a great thing, and congrats to the band that gets them. On the other hand, a band could say "No, we only want one sponsor. We don't want to look crowded." A single sponsor may indeed suit several situations, but not all. Here are some differences:
First and foremost, since band sponsors are looking for the feel-good factor of the music scene, and since they get highly attached to the band they sponsor, they really feel good when they can be the sole reason for the band's success. At shows, fans will look up to the sponsor, and will respect their name. This becomes less so when there are several sponsors.
However, when the band has several sponsors, the sponsors can sit together at shows, much like NASCAR sponsors meet each other at the races. They become friends, and then the sponsorship becomes somewhat of a sport to them like playing golf with buddies. It's all based on their personalities and how they get along with each other. But the band can probably assume that if a sponsor likes music and going to shows, then they will also like meeting other similar people who do the same.
But then there is the searching that must take place... the finding of the sponsors that a band has to do in the first place (which is the purpose of TalentFunding.com). It might be much easier to find several small sponsors who will pay $20,000 each USD, than it is to find one who will pay $100,000. But the larger sponsor is (for most bands) a once-in-a-lifetime find, whereas the smaller one is at every one of the band's shows. The band just has to find them.
My recommendation is for bands to keep their options open to either situation, and limit the term length that any particular sponsor can stay attached (this is a negotiation point, of course.) This way bands can start small (with several small sponsors), and progress to fewer more-serious ones, and maybe end up with a single all-encompassing sponsor. But that's just one option. Remember that even a single NASCAR team has many, many sponsors; each on a different level (different logo size and placement)... and it works for them. It's just something that will have to be played with by each band. But what fun; mapping out the bands exposure!
Here's an important thing for bands to remember: in business, if something appears to work, other business people will want to follow (or copy) the original. Musicians may be tempted to think that if one sponsor comes on, others may not want to follow-the-leader because they would not be original. Rest assured, if one or two small sponsors appear to be happy, others (hopefully larger) will start being more receptive very soon, as long as they can do the same thing that the first sponsor did.
Let's not forget the "fear of payback" issue. The reason that bands are probably dead-last on the list of where investors choose to invest (not sponsor), is that investors know the chance of a band paying back the money is just about zero. Even though a sponsorship does not involve payback, the person supplying the money still has to trust the band to do what the band is supposed to do. This means that having multiple sponsors would be easier for most bands to handle, since each sponsor would have to "trust" the band less, because each sponsor is paying less. (I still say, let bands do what they do best ... attract fans, not payback money.)
Lastly there comes the exclusivity issue. If a sponsor really wants to be the only (i.e. exclusive) sponsor, then they may ask (or the band may offer) an agreement specifying such. But in any business (including sponsorships), exclusivity always means additional cost, because the band is giving up "all the other sponsors" they could have had otherwise (whether or not there really were any). In a perfect musical world, a band would just get one big sponsor for $500,000 USD who would want only a small logo on the band's t-shirt for six months. But in the real world, band's put together what they can.
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