Green Room simplifies payments and streamlines tax compliance for the live music industry, saving time and money for both local artists and venues. So what currently is the issue? Essentially, independent contractors are required by the IRS to receive a 1099 form from any employer that pays them more than $600 in an entire year (whereas salaried workers are usually given a W-2 form). And, the same is true on the flip side: employers are required to issue a 1099 form to any contractor to whom they pay more than $600. For any local artist that plays a few gigs a year at more than one venue, you can imagine how quickly the number of 1099 forms add up. Not to mention how many 1099 forms local venues (think: bars and local restaurants) need to issue if they regularly offer live music and need to consistently find new artists to play (especially if they may have multiple musicians playing in the same night).
Green Room simplifies payments and streamlines tax compliance for the live music industry, enabling local venues and independent artists to save time and stay compliant.
This market opportunity is particularly timely as the U.S. continues to climb out of the global COVID-19 pandemic, and people are more eager than ever to return to in-person events and gatherings. The U.S. live music industry was estimated to reach $12B in 2021 and to grow ~4% YoY. Green Room is particularly playing in an exciting space because of the opportunity to expand into complementary areas in the long-term, such as the broader entertainment management space (e.g. facilitated and streamlined bookings, etc.). And founder and CEO Sophie Randolph has already started to find the demand for a better payment and tax compliance management system: she has conducted over 70 customer interviews and has even worked with artists who literally have lost revenue, meaning they misplaced a check before depositing it. In a world of rapidly accelerating fintech development, this space is prime (and long overdue) for innovation.
Green Room is currently in a very early stage, with Sophie as the only full-time employee. Sophie is a part of the gBETA Musictech accelerator program and has outsourced the development of the prototype, which recently went live as of November 10, 2021. Sophie clearly demonstrates a passion for learning; as she has learned how to make modifications to the prototype herself to be able to rapidly test it with customers. Sophie previously has worked at a Series A startup and is currently pursuing Green Room venture within the support of the MBA program at Rice Business (Jones Graduate School of Business).
As of now, there are few known competitors in this space: Prism is the closest player, but they focus primarily on contract management rather than the holistic payment and taxation process or the live music industry specifically. Even in Green Room’s early stage, there are a three key elements to Green Room that make it a company worth watching:
Dual-sided Value Proposition: Green Room solves a pain point for both the venues and the musicians (as seen below), which is likely to increase the speed of adoption as musicians gravitate towards systems that venues use and vice versa.
Musician-Centric Approach: Green Room is prioritizing creating the best customer experience for musicians, improving the lives of people who normally have to constantly hustle in pursuit of their passions. And, given the dual-sided value proposition, Green Room is able to start to monetize early based on the value added to the venues and can defer monetizing from musicians until more offerings are developed.
Strong Founder and Market Connection: Sophie has already been booking and managing musicians as the founder of Crescendo Management, giving her the right insight to tackle this space. Even better, Sophie is based out of Houston, Texas and is continuing to build out her connections in other music hubs such as Milwaukee, WI, and Des Moines, Iowa.
Moving forward, Green Room will continue to test through the recently launched prototype. Green Room is currently running a very lean model to make the most of its current funding, and plans to apply to equity-based accelerators and to fundraise in 2022.
To learn more about Green Room, visit www.greenroom.app where you can sign up to check out the prototype or to subscribe to the newsletter to stay up to date, or reach out directly to email@example.com!