Cooking Vinyl Signs Mult-Million Dollar Venture Capital Deal
Cooking Vinyl Signs Mult-Million Dollar Venture Capital Deal

London-based Cooking Vinyl Group, one of Europe's leading independent music companies, has clinched a multi-million dollar funding deal with Icebreaker, a U.K. venture-capital company.

Cooking Vinyl will use the cash to finance the production, distribution and marketing of recordings by both new and established acts discovered or signed up by the group's subsidiary label Cooking Vinyl Records.

The A&R and the recording will be through Cooking Vinyl Records, although acts can also come with already completed recordings.

Then Cooking Vinyl Records and its sister company Essential Music & Marketing will handle the marketing, promotion and distribution.

Martin Goldschmidt, Cooking Vinyl's founder/managing director, tells, "Under this deal, our goal is to bring out five to 10 recording projects at $1 million over the next year. The artists will own the copyright. We will license the recording, and then handle the international marketing, promotion and distribution strategies. Icebreaker provides the (original investment) money."

He explains that the Icebreaker deal is exceptional because venture capital companies usually back individual recording projects, on a case-by-case basis. And usually, those deals are through the artists' managers or a distribution company.

Although Tony Ciulla, manager of goth act Marilyn Manson, played a pivotal role in clinching Icebreaker's funding for Manson's next album on the artist's own imprint Hell, etc. ( Billboard, November 13, 2010), Cooking Vinyl's global distribution and marketing strategies for the venture impressed the venture-capital firm.

"Icebreaker enjoyed that experience so much, they wanted to take the relationship with us further," Goldschmidt says. "It has seen the value of working directly with labels."

Icebreaker's cash for its new agreement with Cooking Vinyl will come from the more than £350 million ($567 million) coffer of capital it has collected from private investors. The company has helped finance individual entertainment projects, including the production and distribution of 150 music albums.

"But Icebreaker is cutting down the number of deals it does directly with the music industry and wants continue through us instead," Goldschmidt explains.

Cooking Vinyl, whose other acts include folk singer Billy Bragg and electronic act Underworld, handles about 30 albums (as label, distributor or both) a year. From now on, the 30 albums will include Icebreaker-financed recordings.

"With the Icebreaker deal, we don't have any future cash-flow issues or risk issues, as long as we do a great job," Goldschmidt adds.

Before working with Icebreaker, the independent music company had a successful VC partnership with London-based Ingenious Media Investments in a one-off deal to finance "Invaders Must Die," the 2009 album from British maverick electronic-dance act The Prodigy, which debuted at No. 1 on the U.K. album chart.