There's a tradeoff that must be made, and your choice will determine the ultimate strategy your band uses to achieve it's goals.
How much control are you willing to trade for cash?
Money isn't free.
If a label gives you $20,000 to record an album, you're not going to be able to change your genre midway through the recording sessions. No replacing the drums with a sitar, either. Likewise, if an angel investor funds your startup with $500,000, you can bet your life that she'll want to have a big say in how your business is run. That's how the whole shareholder thing works. Cash is exchanged for control.
The addition of cash to any transaction carries with it an expectation. Failure to meet that expectation is a breach of trust at best, and a catastrophic breach of contract at worst. Either way, it's not good.
So you must find a balance. How much control are you willing to trade for cash? Are you willing to give up publishing rights and royalties for a fully-funded album? Would you change the way you dressed on stage if it meant your next merch order was free? Would you adjust the style of singing your songs for a shot at a bigger show?
There's no right answer for everyone, this decision is personal. Your music might be perfectly served with a 40-60 split for rights in exchange for an album and you not having to deal with the "business" of your music. Your music might also be too niche or personal to attract investment, so total control might be your only option.
In business terms, are you aiming for a buyout (Label) or not?
The choice you make defines what strategies your band should use. More on this next week...