VOL. 133 | NO. 93 | Wednesday, May 9, 2018
Memphis Startup Soundways Wins $200,000 in Rise of the Rest Competition
By Michael Waddell
Memphis startup company Soundways, which helps professionals in the music industry collect unpaid royalties, won a $100,000 investment from Steve Case and other entrepreneurs as part of the Rise of the Rest tour that stopped in the Bluff City Tuesday, May 8.
Steve Case, left, brought his Rise of the Rest bus tour to Clayborn Temple in Memphis Tuesday, May 8, to hear business funding pitches from Memphis startups. Soundways took the $100,000 seed fund competition and its CEO, Gebre Waddell, addresses the crowd from the podium. As an unexpected bonus, local startup investment firm Innova matched that $100,000 with a $100,000 investment in Soundways of its own. (Michael Waddell)
That investment was then unexpectedly matched by local startup investment firm Innova, making the business pitch from Soundways’ CEO Gebre Waddell quite lucrative.
Soundways was one of eight local companies that gave pitches to Steve Case, AOL’s co-founder and chairman and CEO of Revolution, and several entrepreneurs connected to Revolution’s Rise of the Rest Seed Fund and other corporations such as Microsoft.
The ROTR Seed Fund bus tour promotes and provides funding for entrepreneurs in emerging startup ecosystems across the country. It stopped in Memphis on Tuesday evening at Downtown’s historic Clayborn Temple to judge the startup pitches and make an award of $100,000.
“What’s great for Memphis about this event is that validation by an iconic entrepreneur and venture investor like Steve Case is a recognition that Memphis is ready and investable,” said Leslie Smith, president and CEO of Epicenter Memphis, the central strategic hub for the local entrepreneurial system, which includes incubators like ZeroTo510 and StartCo. “As a community, we’ve been working on this movement for the past decade.”
The event began with a “fireside chat” panel discussion moderated by Smith that included Case, Operation HOPE chairman and CEO John Hope Bryant, and ROTR Seed Fund managing partner and “Hillbilly Elegy” author J.D. Vance.
“We’re trying to make sure that there’s a pathway (to entrepreneurship) for everyone in the country, everywhere in the country,” Case said. “The reason we’re doing this is because right now, even though this continues to be the most innovative, entrepreneurial nation in the world, the reality is it does matter where you live, it does matter what you look like, it does matter who you know in terms of whether you have an idea that can be turned into a company and change the world, create jobs, and lift up your community.”
Case said last year 75 percent of venture capital went to just three states – California, New York and Massachusetts – leaving the remaining 25 percent to be divided up among the other 47 states. Last year, Tennessee received less than 1 percent of venture capital, so being an entrepreneur in some states is easier than in others.
“The people side is even more sobering and troublesome,” Case said. “Last year, over 90 percent of venture capital went to men, and less than 1 percent went to African-Americans. So it’s not fair, it’s not right, it’s not smart. We need to give everybody a shot.”
This is the seventh ROTR tour in the past four years. Memphis is the second stop on this tour, following Dallas, and it’s the 35th city visited overall. Upcoming tour stops include Birmingham, Alabama, Chattanooga, Tennessee, and Louisville, Kentucky.
“When we come to these neighborhoods, we see unleveraged potential,” said Bryant, who pointed out that 45 percent of African-American have a credit score under 620, making them unqualified to get a business loan. “We’re raising credit scores here in Memphis in partnership with some banks and the mayor – 120 points in 24 months – because nothing changes your life more than God or love than moving your credit score 120 points.”
The panel of judges that chose Soundways included Case, Vance, ROTR Seed Fund partners Mary Grove and David Hall, Microsoft CTO Kevin Scott, Silicon Valley Bank CEO Greg Becker, and Henderson Worldwide Investments founder and CEO Carolyn Hardy of Memphis.
Waddell said Soundways makes audio solutions for music and audio recordings. Roughly $1.4 billion a year in music royalties is the pie his company is helping music professionals try to collect through a platform/database Soundways has developed.
“There are 4 million music creators eligible for royalties, and 1.6 million sound engineers around the world,” Waddell said. “With radio, video games, advertising, film, television – all of that content has to come from somewhere, and the pathway is broken. We’re connecting the recording industry supply chain with revolutionary solutions.”
Revolution’s ROTR Seed Fund is an early-stage venture fund backed by three dozen iconic entrepreneurs, investors and executives such as Eric Schmidt, Jeff Bezos, Henry Kravis, Howard Schultz, Meg Whitman, Jim Breyer, John Doerr and others. Late last year, the fund announced it plans to invest $150 million in startups.