The course breaks finance down into three digestible components, roughly weighted equally in time spent per week: (1) determining and understanding financial calculations, both focused on the music industry in particular, as well as more general important overall business calculations, (2) money, markets, and the music business, and (3) funding music. You will learn how to access money, take advantage of micro finance opportunities, and apply financial tools to assess the financial health of your enterprise. Topics include compound interest, interest rates, capital markets, startups, stocks and IPOs, cash flow, balance sheets, price elasticity, and exit strategies. The course explores nontraditional forms of music funding, such as venture capital and crowdfunding opportunities like Kickstarter and PledgeMusic. You’ll also learn about bonds, grants, business loans, financing in rounds, and much more. The goal of the course is to empower you to apply the critical tools of financial analysis to leverage talent (your own or someone else’s!), assess the potential of music enterprises, and drive new music businesses.

By the end of the course, you will be able to:

• Employ best practices and budgeting in crowdfunding
• Understand the role of venture capital for music entrepreneurs
• Understand the cash flow dynamics of music startups
• Explain how to leverage the loan market for a music business
• Define equity in a music enterprise
• Use stock indicators to track publicly-traded music companies
• Understand bonds and use them in the music business
• Prepare a pitch for venture capitalists
• Differentiate the roles of startup founders and venture capitalists
• Apply the methodology of price elasticity to music goods
• Understand the cash flow dynamics of music startups
• Evaluate profit and loss statements
• Evaluate a company’s cash flow statement
• Assess government funding and non-profit grants
• Plan entrepreneurial exit strategies

“Peter Alhadeff is not only knowledgeable but also excellent at adapting the material to each student’s experience level and interests, so whether you’re familiar with the subject area or don’t know which way to hold a calculator, Peter will help you to get the most from the course.” – student Maureen Lilla

Why should you take this course? Read an interview with course instructor Peter Alhadeff on our blog.

Syllabus

Lesson 1 Financial Calculations, Money Markets, and Crowdfunding

Lesson 2 The Compound Formula, Business Equity, and Crowdfunding II

Lesson 3 Money Growth, Stock Quants, and Crowdfunding III

Lesson 4 Payment Streams, Bonds, and Crowdfunding IV

Lesson 5 Present Value of Payment Streams Bond Yields, and Crowdfunding V

Lesson 6 Net Present Value, Discount Rates, and Venture Capital I

Lesson 7 IRR, Risk vs. Return, and Venture Capital II

Lesson 8 Business Loans, Investment Multiples, and Venture Capital III

Lesson 9 Owners’ Shares, Price Elasticity, and Venture Capital IV

Lesson 10 Accounting Profit, Variable Pricing, and Venture Capital V

Lesson 11 Assets and Liabilities, Business Reports, and Venture Capital VI

Prerequisites and Course-Specific Requirements

Completion of Applied Mathematics for Musicians or equivalent knowledge and experience is required.

Required Textbook(s)

• Investing 101: From Stocks and Bonds to ETFs and IPOs, an Essential Primer on Building a Profitable Portfolio by Michele Cagan, Adams
• Venture Deals: Be Smarter Than Your Lawyer and Venture Capitalist by Brad Feld and Jason Mendelson, Wiley
• The Crowdfunding Bible by Scott Steinberg (PDF)

Software Requirements

• Microsoft Excel or OpenOffice

Hardware Requirements

• Scientific or Financial Calculator

Instructors

Peter Alhadeff

Author

Peter Alhadeff, D.Phil., is a distinguished Oxford economist and historian who has a made his own unique and successful career in the U.S. music business. He has published and been engaged by the National Academy of Recording Arts and Sciences, the Harvard Berkman Center, the Latin Grammy, the InterAmerican Bank at the Di Tella Institute in Buenos Aires, and the Business and Economics Society International, for which he delivered the keynote address on the state of the music trade in Athens, Greece.

Peter is a pioneering educator with a practical bend. As a professor and founding faculty member of Music Business/Management at Berklee, he taught the first ever courses in math, music economics, and statistics. He also taught the first HTML and Javascript courses at Berklee. He works closely with his students, as well as faculty from inside and outside the college to produce The Music Business Journal at www.thembj.org. Digital Music News identified him as one of the most important attendees at Midem, Cannes, 2012.

Alhadeff is the past chair of the Music Entertainment and Educators’ Association’s international conference and founded the monthly trade Recording En Español and its successor Músico Pro, passing the editorial baton to his students. He has built a prolific writing record of more than one hundred music business articles that he says is fed by his experience in the classroom.

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Luiz Augusto Buff De Souza E Silva

Instructor

Luiz Augusto Buff de Souza e Silva is a Brazilian lawyer, with a masters degree in Entertainment, Media and Intellectual Property Law from UCLA School of Law, and a degree in Music Business and Management from Berklee College of Music. Luiz developed experience in the music industry both as a musician, and also working at companies such as Warner Bros. Studios, Ted Kurland Associates, Soundtrack Group, and consulting firm Digital Cowboys. Luiz was a Research Collaborator in the development of the Music Business Finance course and also co-wrote the article “Budgeting for Crowdfunding Rewards” with prof. Peter Alhadeff, published in the Music & Entertainment Industry Educators Association (MEIEA) Journal.

What’s Next?

When taken for credit, Music Business Finance can be applied towards these associated programs:

Associated Certificate Programs

• General Music Studies Professional Certificate
• General Music Studies Advanced Professional Certificate

Associated Degree Majors

• Bachelor’s Degree in Music Business
• Bachelor’s Degree in Electronic Music Production and Sound Design
• (Pre-Degree) Undeclared Option
• Bachelor’s Degree in Interdisciplinary Music Studies (Create Your Own Major)
• Bachelor’s Degree in Guitar
• Bachelor’s Degree in Music Production
• Bachelor’s Degree in Songwriting and Producing Music
• Bachelor’s Degree in Songwriting