Money Matters: EventFund’s ‘Half-Investor, Half-Nerdy Accounting Team’ Wants To Help Fund Your Shows
– Jon Haile
EventFund is calling itself the first-ever financial platform providing event organizers non-dilutive capital, covering expenses in exchange for a share of profits and providing a “unique downside protection program” against unexpected losses.
Self-described as “half-investor, half-nerdy accounting team,” EventFund is backed by Primary Endeavors, a boutique investment firm focused on the entertainment and leisure industries.
EventFund co-founder Jon Haile says while the project was in the works for a while, the pandemic made the need for capital much more urgent.
“We understood that there may be an opportunity to engage almost akin to a co-promoter, but without the same type of creative oversight or booking oversight that a conventional co-promoter would have, and with friendlier deal terms, if we could do it at scale,” says Haile, whose background includes working at the mailroom at one of the major agencies, as well as event production, branding and sponsorships.
Three years ago he and his partners linked up with an equity partner and began surfacing deals there, investing in boutique music festivals, a loudspeaker manufacturer and more.
Conversations with promoters led to the realization that equity investment wasn’t appropriate for all successful live event operators, but there was space for revenue-sharing.
“That was a model we were experimenting with before the pandemic hit. We had a good clip and deal flow in 2019 and were just starting to ramp it up, but obviously in March the shit hit the fan and we took a moment to kind of regroup. The pandemic created a sense of urgency around capital, so we decided to focus and prioritize.”
EventFund’s strategy is to help create a financial model with goals, then fund an expense account, provide revenue and expense tracking and finally provide a settlement report that includes the event producer’s share of the revenue according to the agreement.
“The main difference between the way we work and the way a bank operates is we’re much more collaborative,” Haile says.
“Bank loans are typically very slow to apply for and very onerous with documentation, credit checks, – they’re really long to process. They also typically require some sort of collateral or personal recourse, which in a climate like right now is not great for the people applying.”
The company is partnered with ticketing platform NIGHTOUT, whose CEO Dusty Stutsman adds, “We believe EventFund provides the perfect solution to get them back on their feet and start hosting events again.
“Their innovative approach offers capital, accounting, and risk mitigation tools that will give event producers the ability to jumpstart events in the short term and be a lasting resource for growth and scalability long into the future. We’re fired up about this partnership and can’t wait to bring it directly to
event producers who are the heart and soul of our industry, especially at this critical point in time when it’s so needed and relevant.”
With most appropriate clients being promoters and talent buyers across the United States, Haile says EventFund is able to help promoters get through a difficult period now and once things open back up.
“A typical deal would be a successful promoter wants to throw a higher number of shows so we’ll partner on a run of shows and basically provide up-front financing for those in exchange for a share of revenue,” Haile explains. “So, rather than the collateral being literally your business, the collateral is the performance, the shows we’re partnering with. Our paperwork is very simple and straightforward, our process is very streamlined and fast. Once we have identified a strong partner, we’re quick to move. That’s a key differentiator between how we operate and how a bank operates.”
A big part of EventFund’s sales pitch is that it provides downside protection, with its promotional materials proclaiming, “We will cover the immediate loss from an unprofitable event, allowing you to amortize it over time. We also provide event cancellation protection to supplement your existing insurance policies.”
As the risk is somewhat shifted from promoter to co-promoter in this case, Haile says the onus is on EventFund to choose partners that make sense.
“We’re quite selective in the people we partner with to make sure this is going to be a win for everybody long-term,” he says.
“We’ve had a significant amount of interest and traction quickly. We’ve had hundreds of incoming inquiries, which is very cool. Managing risk is a factor, so we’re being really thorough and upfront with the folks we’re talking to, making sure it’ll be a good fit for both parties.”
With so much uncertainty and many venues closed already, Haile says the balance of power between agent and promoter may have shifted somewhat as markets and venues slowly open back up for live concerts.
“It seems like a silver lining of what has been a truly shit year is that the chessboard has been shaken a little bit, and terms seem to be headed in a more promoter-friendly direction overall,” Haile says, as the supply of dates and places to play may be a lot smaller than the demand from artists and fans right now.