It is not uncommon that independent creators struggle with money to maintain their business and art. Such is the case for podcasting, a slowly growing industry that gets a significant amount of traction.
With the rise of podcasting, Podfund is giving a one-time investment in exchange for shared revenues for podcasts that have a high potential to become a successful business. Podfund sees these podcasts as “emerging creator-led media companies with podcasts as a core strategy and driver of audience, brand, and revenue.”
With different platforms for podcasts, creators earn by making shows exclusive only for the platform. But with Podfund, creators can take their show wherever they want. Although the platform is an essential factor for podcasting, Podfund is not picking a platform specific for each show. Creators can also decide whether to use the investment in whatever activities they wish like going on tour, selling merchandise or licensing, but with every deal, Podfund takes a cut.
According to Podfund, the investment can typically range from $25,000 to $50,000 depending on the track record of the podcast, revenue, and intent on the investment. However, what Podfund assures the creators is they get to keep 100% ownership of their company including their intellectual property rights.
In return, the company receives a 7 to 15 percent from the total gross revenue which includes ads or sponsorships, listener support, and ancillary support like touring and merchandise. The revenue share agreement between the creator and Podfund will run between 3 to 5 years based on current traction, revenue and projected growth of the podcast.
Furthermore, in an event where the creators decide to get out of the shared revenue agreement, this requires them to pay back Podfund in a growing premium. They can pay the company 1.5 times of their initial funding on the first year, but by the fourth year, they will pay four times the funding.
Before putting their money on a podcast, Podfund looks for three things in a company: if it’s “poised for growth,” has “evidence of traction,” and if there’s an “initial revenue.” Basically, Podfund looks at podcasts that have initial independent success which makes them different from other initiatives in scouting new talents.
During its launch, Podfund announced that it has already started investing on Malcolm Gladwell’s podcast studio, Pushkin Industries which produces shows like Revisionist History. They have also worked with Erica mandy of theNewsWorthy.
Podfund encourages the creators to put the investment on anything they need that would help their business grow — an editor, a producer, or more equipment. More than the monetary assistance, creators can also seek mentorship across the industry like Max Linsky, co-founder of Pineapple Street Media; Andrew Golis, the chief content officer of WNYC; Dave Ambrose, managing director of Steadfast Venture Capital; and Karo Chakhlasyan, chief operating officer of Chartable. Creators would be able to seek help from whomever they need consulting through the support of Podfund.
Podfund is led by Jake Shapiro who is also the co-founder of the podcast listening platform, RadioPublic. Shapiro started Podfund last fall and finalized its structure and financing on the first quarter of this year. Nicola Korzenko, general manager of Podfund, shares that the investment is not a loan. They assure the creators that they won’t be coming for the creator if they fail to make money, but she promised to be thorough before investing. “We’re going to do everything in our power to help these podcast companies succeed, and we hope that they’ll be doing the same,” she says. “But we understand that not every podcast ends up being a huge business, so there’s some amount of that that has to be factored into the deal structure — that we know not everyone will end up with a happy ending, although we hope they all do.”
Shapiro looks at other podcasting initiatives as part of the industries ecosystem that is important for its growth. He says, “The industry as a whole is still so early and creating an infrastructure around training and professional development in different pockets of what you need as a traditional creator that I’m not concerned if there’s competitive overlap.”
But with the question whether independent creators can be a success in this venture, according to Shapiro, Podfund does not require the creators to be of any high-level success as long as they have the “right trajectory, temperament and goals.” What Podfund hopes is for the creators to generate enough money to help the company keep afloat and continue investing in other shows while keeping its investment and mentor network.
Beyond the commercial endeavor, Korzenko hopes that the company will have a vast portfolio of creators that will navigate the industry with something they can offer for everyone.