Music Funding 101
Spec Deals
Although mentioned briefly in another TalentFunding.com article as a way of testing for real interest, doing "spec" activities should be looked at with caution. This applies especially to bands, who undoubtedly will be asked repeatedly to "expose the sponsor's name for free for a while" (without the sponsor spending any money), and if it works the sponsor will then pay or will buy a much larger sponsorship campaign. This can be a dangerous area for bands, and I'll just recommend here that in most cases, bands never do such things.
It's just too much for the average band to put so much into a spec deal which never turns into a full paid sponsorship. It will make many bands give up entirely on searching for sponsors. But as long as band sponsorship remains a relatively new opportunity for sponsors, bands should be able to find enough possibilities on TalentFunding.com so that they don't have to consider spec situations. Also of concern are "fake sponsors" who have no intention of ever spending any money at all; they instead want to just search for bands that will do as much as possible for free. Then, when the current band gets tired of getting no money, the "sponsor" moves on to the next willing band.
That being said, IF the situation still warrants it (very rare), then here are some ways to approach spec deals. There are two types of spec deals: One is where the sponsor pays for the campaign after the campaign is completed, and the other is where the sponsor buys a larger second campaign, after the first free one is completed.
The main goal of a real potential sponsor who wants a spec deal is that he wants to see what the band can actually accomplish with their own effort when it comes to exposing the sponsor's name. Likewise, the main goal of a band is to show how well they can expose the sponsor's name, and do so using minimal raw energy and expendable materials.
The band should negotiate to include things that they already or almost already have completed, even though it may look like a lot of work went into them. The band should also make use of whatever personal skills they have, such as one band member who is a graphic artist on his day job. The sponsor may think that a new graphic design took weeks of design, whereas it was actually done in just one hour.
The contract for an actual paid sponsorship should acknowledge and make use of all the "spec" activities, so that these activities are not dismissed. It should be negotiated that the full street value of the spec activities be applied, so they are not valued less later on simply because they've already been completed.
The sponsor, however, not only wants to see how effective the band is in exposing the sponsor's name, but also wants to test the band to see how well they "hold together" during the pressure of a campaign. Bands are not known for being reliable, so a sponsor may very well want a spec deal just to find out if a band can stay the course like they say they will.
As a final note, spec deals need their own contractual agreements, separate from the contract that covers the actual paid sponsorship.
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