The Deal: Spotify Rainmaker Davis Goes Solo Amid IPO Talk

When Spotify founder Daniel Ek finally shares details on his company's plans to file an initial public offering (IPO) -- probably later this year -- Fred Davis will be by his side as he has from the start.

Davis, 54, named Spotify his first client when, earlier in April, he opened Arista Advisors, a boutique investment bank that will help technology and digital media startups raise capital and provide strategic advice and mergers and acquisition support. Arista is named for the label that his esteemed father Clive Davis founded 40 years ago. (Arista was folded into RCA in 2011.)

The younger Davis was executive vp at EMI when he left to co-found the music law firm Davis & Shapiro in 1995 (eventually Davis Shapiro Lewit Montone & Hayes).There, he worked on a range of precedent-setting digital music deals with clients YouTube, Myspace and In 2006, he joined the board of Stockholm-based tween social site Stardoll where he met Ek, the company's chief technology officer.

"I've been working with Spotify since it was just a PowerPoint [presentation]," says Davis. He took Ek around to the labels to convince them to license their first European deals to the Swedish startup with an unusual business model: offering a vast catalog of on-demand music that would entice fans to eventually pay for subscriptions. "We had to put up with a lot of refusals when we tried to secure those 'freemium' deals with the labels," says Davis.

But Davis' credentials helped convince the biggest names in the business, including Universal Music Group chairman/CEO Lucian Grainge, who was then based in London as head of UMG International.

"Very early on, Fred saw the opportunity to bridge music and technology, and it has paid dividends for both of us," says Grainge.

Davis brought Spotify along as a client in 2010 when he co-founded Code Advisors, which worked on another hotly anticipated IPO -- Twitter -- in 2013, and was involved in Spotify's last three fund-raising rounds that amassed $450 million from investors. In the process, Spotify was valued at $4 billion -- recent speculation puts it as high as $7 billion -- which meant that an IPO was the logical next step. People close to the company privately acknowledge an IPO is inevitable, and though Spotify and Davis have declined to comment on the matter, it has quietly sought to hire a regulatory filings expert and obtained a $200 million credit line from Morgan Stanley, Deutsche Bank and other financial institutions. "I really believe Daniel is the best music visionary of our generation," says Davis, who speaks of Ek in the same adulatory tones his father has used in discussing talent like Whitney Houston. That's because, he says, "I believe in the founder of a startup in the same way that an A&R man believes in the frontman of a band."