I received an email from a web app that I use on my phone called 8tracks. The app is a music streamer, it uses playlists submitted by users. It's a nice app, but it competes in a most difficult space, with internet powerhouses like Google Play Music, Apple Itunes, and Pandora, among others.
The email was a plea for money. Investment money.
Here's the email:
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Hi Michael,
In an unusual turn, I’m not writing today to suggest playlists we’ve hand-picked for you (though I've slipped in a few that our community love at the end of this email). Instead, I’m writing about potentially investing in 8tracks.
Under US law, only wealthy individuals and venture capitalists have historically had the ability to invest in startups. This changed last summer: the JOBS Act now allows anyone to invest in private companies. Unlike typical crowdfunding platforms (like Kickstarter), this new process would allow you to actually own stock in 8tracks.
8tracks was founded to showcase the passion and talent of people who care about great music and wish to share it, delivering the perfect playlist for a listener’s taste, time and place. As our DJs and listeners have both created and promoted this infinite soundtrack, so too should they have the opportunity to finance it by taking a stake in the company while we’re still relatively small.
New funding would allow us to build out a full music library for DJs, make it easier for listeners to find playlists they like, integrate 8tracks on new platforms, and refine our business model to continue to grow 8tracks for years to come.
This isn’t an offer to invest, and as of now you still can’t buy shares. I’d simply like to understand if you would be interested in participating. If there’s broad interest, we may file official paperwork with the Securities and Exchange Commission (SEC) to pursue this new crowdfunding option.
Show Your Interest
Thanks,
David Porter
CEO & founder, 8tracks
The email was a plea for money. Investment money.
Here's the email:
--------------------------------------------------------------------------------------------------------------------------
Hi Michael,
In an unusual turn, I’m not writing today to suggest playlists we’ve hand-picked for you (though I've slipped in a few that our community love at the end of this email). Instead, I’m writing about potentially investing in 8tracks.
Under US law, only wealthy individuals and venture capitalists have historically had the ability to invest in startups. This changed last summer: the JOBS Act now allows anyone to invest in private companies. Unlike typical crowdfunding platforms (like Kickstarter), this new process would allow you to actually own stock in 8tracks.
8tracks was founded to showcase the passion and talent of people who care about great music and wish to share it, delivering the perfect playlist for a listener’s taste, time and place. As our DJs and listeners have both created and promoted this infinite soundtrack, so too should they have the opportunity to finance it by taking a stake in the company while we’re still relatively small.
New funding would allow us to build out a full music library for DJs, make it easier for listeners to find playlists they like, integrate 8tracks on new platforms, and refine our business model to continue to grow 8tracks for years to come.
This isn’t an offer to invest, and as of now you still can’t buy shares. I’d simply like to understand if you would be interested in participating. If there’s broad interest, we may file official paperwork with the Securities and Exchange Commission (SEC) to pursue this new crowdfunding option.
Show Your Interest
Thanks,
David Porter
CEO & founder, 8tracks
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Claiming to only trying to gauge interest, it seems to me like they are really trying to gin up interest in their users to pony up investment in the company. Considering the massive competitive disadvantage they have from their 800 pound gorilla competition, it seems the prospects for 8tracks are dim at best.
But the JOBS Act that the email references is the vehicle that will allow an entire new generation of stock fraud and manipulation to occur with an entire swath of people that have no business whatsoever investing in startups or even being solicited to do so.
Even Broadway, where investments in shows have a notoriously low chance of recoupment, will soon be banging the drum for JOBS Act investments. There is one Broadway producer that is publicly chomping at the bit to bring in starry-eyed small investors to fund his shows via the JOBS Act.
Curiously, there never has been a constituency for the creation of the JOBS Act. There has never been any demand by small unaccredited investors to be allowed to put money into such dubious ventures as internet start-ups or Broadway shows.
It's only the hucksters that want to raise money for their endeavors, that have been thwarted by sound regulations against this sort of chicanery, that championed the creation of this horrible legislation.
Without a doubt, we will see many tragic outcomes from the JOBS Act.
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