Venture capitalists are one of the engines that fuel our economy but, as sexy as they sound, they're not always the best route. Sure, you get capital up front, but you give up control. The amount of control you have to give up varies, but expect to give up at least 51% ownership. This means you gave up control of your business. Venture capitalists aren't there for cuddles and s'mores, it's all about return on investment (ROI). If a business doesn't produce enough cash for the venture capital firm, that business will get dropped.
It's a business.
Record labels are the exact same. They choose to "invest" in your band if you show promise to make them more money. You get an advance (capital) in exchange for control. If you're not a strong member of their portfolio (artist catalog) then it's quite likely you'll be dropped from the label and owe them that fat advance back. If you're not making them their money back plus interest, they'll drop you. If they don't like the direction you're going, (jazz band moving into crust punk?) they'll drop you. If you say something controversial, they'll drop you. Its a business.
Be very, very careful giving up any control of your music. Once you've given it away, you'll never get it back.
Never stop asking yourself, "What is in my music's best interest?". No one cares more about your music than you.
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