Music Tech Startups Scramble To Gain Traction (And Investors) In Nashville

For seven music technology startups working in Nashville this year, last Monday marked a big day: Pitch Day. That’s when their founders and CEOs courted investors with snazzy slideshows and pithy presentations.

They pitched ideas like customizing sheet music; selling concert merchandise online; streaming songs alongside user-submitted photos.

These companies recently completed an accelerator program called Project Music, run out of Nashville’s Entrepreneur Center. And while it can be difficult for any startup in the marketplace to find funding, these companies face an extra challenge: Many investors are still skittish about risking money in the music technology business.

On one side, 
tech investors who are willing to risk money on other kinds of startups often don’t want to mess with the volatile music industry.

“It’s constantly changing,” says Heather McBee, who oversees Project Music. “The licensing, the rights, are very, very complicated, and that scares some investors away.”

But on the other side, 
the traditional music industry hasn’t been investing much in outside tech startups.

“In general, music companies have been reticent to invest in smaller technology plays because they’ve been trying to do it themselves,” 
says Joe 
Galante
, a former chairman of Sony Music Nashville and co-founder of Project Music.

So that leaves some entrepreneurs feeling stuck in the middle.

Erik Mendelson is CEO of a startup called RecordGram,
 a platform where music producers upload their leftover beats for amateur artists to use at a low price. He says getting investment in
 music technology is difficult even in San Francisco or New York. But
 it seems especially hard in Nashville.

 
 “Even though this is Music City, a lot of the investment is primarily going to health care,” he says.

Indeed, there are at least a dozen investment firms with offices in Nashville that work specifically with health care startups. Music investment comes on a much smaller scale, Galante says. 
“It’s a music town for people to enjoy and consume, not from an investment standpoint yet.”

Galante
is trying to change that — one of the reasons he helped found the Project Music accelerator. 
The music tech industry is just young, he says. It needs more breakout stars before people are willing to risk money. And he wants to make sure those stars come out of Nashville.