A fan-funded record label – the new alternative investment?

“I’d tried to get a record deal like so many other musicians when I was in my late teens and I’d been messed around a lot,” recalls Joseph.

“By the time I was 21, I was not only bored and frustrated but I felt like I was waiting for something that might never happen. As a reaction to that, I thought, ‘Right, I’m going to produce the record myself’.”

Joseph invested in some recording equipment and set about creating his first album “Scream”. “I remember thinking, ‘Okay, this is great, but how the hell am I going to release it? I don’t have a distribution deal with anyone and I don’t have a promoter’. I needed to create a following.”

In addition to taking the traditional route of playing and promoting his music in pubs and clubs like other acoustic guitar singer-songwriters, Joseph embarked on a year-long tour of schools and colleges throughout the UK. The tour was a mixture of instruction and performance, which involved him holding seminars on writing and recording music as well as staging concerts.

“By the end of the year, I had built up a massive fan base, which convinced me there was a genuine demand for my music. I released my first single ‘Get Through’ at the beginning of 2003. It came in at number 38 in the charts, followed by my second single ‘Fly’, which got to number 28.”

“And then suddenly – what I’d been so longing for when I was 16 – I found that all the big record labels were running after me!”

Joseph signed with Warner Bros label Fourteenth Floor, which brought him “great advantages” and two more top 40 hits, but it wasn’t long before he was confronted with the downsides of working with a major record label, mainly the inefficiency inherent in a large organisation and the loss of complete autonomy.

Inspired by his earlier success with his chart-topping singles, Joseph decided to continue in his original pioneering spirit by setting up his own record label in mid-2006.

“I had all this experience under my belt of having seen how it’s done from my time at Warner Bros, as well as a fantastic contact base of radio, tv and press pluggers – all the things I couldn’t do before by myself. So ‘38 Records’ seemed like an obvious name – a sort of return to independence if you like.”

Only one problem was left: who was going to fund the label? Determined not to just draft in “a bunch of cold investors”, Joseph considered a few options before hitting on an idea that had never been done before – launching a fan-funded record label.

“I wanted to have investors who were really passionate about my music, and I’d got to know who my real fans were during the year I was touring because I’d notice them turning up at nearly every gig.”

Joseph approached his five most committed fans, asking for a minimum investment of £1,000 to own a share in 38 Records. They all jumped on the chance. Aside from thinking it was a cool and quirky investment opportunity, they were really excited about seeing the tangible benefits of their investment in action.

“They were the kind of fans that had always been on to me asking, ‘When’s the new album coming out? I’m really looking forward to it’. So the real highlight for them is that they’re now really involved – we’ll phone them up and say, ‘Hey, come down to the studio – we want you to listen to the demos and hear how the record’s going’.”

From those original five, the label has now grown to having more than 100 shareholders whose investments range from £1,000 to £100,000. The type of investor is equally eclectic and includes the likes of a filmmaker, a budding chef, builders, teachers and a retired couple.

“I still own over half the shares so that I have the controlling interest. This was really important to me after my experience at Warner Bros. I didn’t want to get into a situation where even though it was my own label, I was being told what to do!” says Joseph.

With more than £750,000 now committed to the label, 38 Records is aiming to raise this figure to £2m by mid-2008. In terms of ROI, shareholders will receive their initial investment back once an agreed number of albums have been sold and they will then continue to receive annual dividends based on label performance.

The investment to date has enabled Mark to develop his studio, record his music and welcome another artist to the label.

“I’ve recently signed Katie Buckhaven, a young singer-songwriter who has previously been championed by Michael Parkinson,” says Joseph, who is looking to sign other artists. “We’re currently completing Katie’s album and my second album, which are both due for release in 2008.”

For his album "Sold to Sound", Joseph has collaborated with top British producer Andy Green (Keane, KT Tunstall, The Feeling).

Not bad for an artist who, only five years ago, was producing records in his bedroom at home. No wonder he’s been nicknamed “the boy who beat the biz".

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