Techstars Music Accelerator Shuts Down, Paving the Way for Future of Entertainment Investment

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Techstars Music, the renowned music technology accelerator, has announced that it will be shutting down. Founded in 2017, the accelerator has provided funding and support to numerous successful companies in the music industry. However, Techstars Music feels that the traditional accelerator model is outdated and limiting. The company believes that the constraints of labeling it as a music accelerator have hindered its ability to invest in companies solving broader problems for the entertainment industry.

Techstars Music selected 10 startups each year and offered them $120,000 in funding along with mentoring from a network of over 300 music and entertainment executives. This approach has resulted in the most successful startups raising a staggering $263 million in follow-on funding.

Managing director Bob Moczydlowsky explained that they have reached their final class this past summer, but emphasized that his career as an investor is far from over. Techstars Music plans to shift its focus to investing in the future of entertainment, self-expression, and live events. While this change in focus may seem drastic, it aligns with the company’s long-term vision and investment strategy.

Moczydlowsky elaborated on why accelerators, including Techstars Music, are becoming outdated. He highlighted that accelerators were designed to fill a need during the financial crisis of 2008 when angel and pre-seed investors were scarce. However, the economic deal that accelerators offer to founders has not evolved since then. The cost of running a business has increased, and the amount of capital provided by accelerators remains the same. To address these challenges, Techstars Music aims to make more investments on a rolling, year-round basis and provide more capital to better support companies.

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The shift in focus from music tech companies to companies solving problems for the music industry reflects the changing landscape of the music business. Music startups often struggle to generate venture returns, especially with competitive giants like Apple, Amazon, and Google using music as a loss leader. Techstars Music intends to invest in companies that directly solve problems for music, even if they are not strictly music companies, such as Community, a direct-messaging service used by artists to connect with their fans.

Moczydlowsky emphasized that defining oneself as more than just a music company can be helpful in attracting investors. He stated that founders need to present their business savvy and find investors who align with their vision and investment thesis.

Looking ahead, Moczydlowsky believes that the next five to ten years will bring more opportunity and radical change to the music industry. With streaming already established as the dominant way of listening to music, the focus now shifts to Streaming 2.0, where the emphasis will be on enhancing the user experience and the ability to interact and engage with music.

In conclusion, Techstars Music’s decision to shut down reflects their desire to adapt to the changing needs of the entertainment industry and broaden their investment scope beyond traditional music tech startups. The company aims to invest in companies that solve problems for the music industry and the future of entertainment, self-expression, and live events. This shift in focus will allow Techstars Music to better support startups and make more investments to address the evolving landscape of the music business.

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Frequently Asked Questions (FAQs) Related to the Above News

Why is Techstars Music shutting down?

Techstars Music feels that the traditional accelerator model is outdated and limiting. The constraints of labeling it as a music accelerator have hindered its ability to invest in companies solving broader problems for the entertainment industry.

How successful has Techstars Music been in the past?

Techstars Music has provided funding and support to numerous successful companies in the music industry. The most successful startups they have worked with raised a staggering $263 million in follow-on funding.

What will happen to Techstars Music's existing startups?

Techstars Music has already reached its final class this past summer. However, the company plans to shift its focus to investing in the future of entertainment, self-expression, and live events. The existing startups will likely need to find alternative sources of funding and support.

How will Techstars Music continue to support startups in the future?

Techstars Music plans to make more investments on a rolling, year-round basis and provide more capital to better support companies. They will also focus on investing in companies that directly solve problems for the music industry, even if they are not strictly music companies.

Why does Techstars Music believe accelerators are becoming outdated?

According to their managing director, accelerators were designed to fill a need during the financial crisis of 2008 when angel and pre-seed investors were scarce. However, the economic deal that accelerators offer to founders has not evolved since then, while the cost of running a business has increased. Techstars Music aims to address these challenges and provide better support to startups.

What kinds of companies will Techstars Music invest in moving forward?

Techstars Music intends to invest in companies that directly solve problems for the music industry and the future of entertainment, self-expression, and live events. They are open to investing in companies that may not be strictly music-related but have the potential to contribute to the music business.

How does Techstars Music plan to attract investors with this new focus?

Techstars Music believes that defining themselves as more than just a music company can be helpful in attracting investors. They encourage founders to present their business savvy and find investors who align with their vision and investment thesis.

What is the future outlook for the music industry according to Techstars Music?

Techstars Music's managing director believes that the next five to ten years will bring more opportunity and radical change to the music industry. With streaming already established as the dominant way of listening to music, the focus will now shift to enhancing the user experience and the ability to interact and engage with music.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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