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Music Tech Investor Perspectives During The Pandemic And Recession: Arabian Prince Of N.W.A.

While the pandemic and recession continue to provide challenges for many entrepreneurs and investors, others view the landscape as an opportunity to further disrupt outdated models and underserved communities.

Some of the most successful entrepreneurs and investors create solutions for problems they have experienced first-hand. This is especially true with industries like music, where the areas of rights and revenues are riddled with complexities, inefficiencies and outdated standards. Market familiarity can also expedite traction around strategic partners, resources and even user adoption from fans when leveraging a person's brand and influence.

Arabian Prince has been a well-known name in music for more than four decades and is now receiving recognition for his work as an entrepreneur and investor in entertainment. After cofounding the landmark rap group N.W.A. in 1986, whose music inspired a generation to speak up about social justice for People of Color, Prince continued to write and release music, in addition to producing hits like the Grammy-nominated and gold-certified "Supersonic" by J.J. Fad. In recent years, however, Prince's focus has shifted to developing a legacy around empowering students and young entrepreneurs, aimed at using business education to help keep youth off the streets.
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The son of a classical pianist mother and father who authored more than 100 books and was the editor of The Watts Times, Prince was "cursed with a very high IQ, living in the hood as a nerd while my uncles were gangbangers." Prince, despite his success, remains very humble. "I don't want to be the guy in the spotlight; I just want to do amazing things and help people. We already said it [social justice] 37 years ago with N.W.A., and now I want to provide kids with a way to transcend their background, just like I did."

Prince's portfolio includes entertainment tech companies like Streoapp, a livestreaming app from nightclubs, bars & festivals, and Advrtas, an AI (artificial intelligence) driven VR/AR/360 video ad platform. Additionally, Prince is expanding into sectors like biotech with his company Covitech, which provides solutions that help small and mid-sized companies respond to COVID-19, as with its PPE (personal protective equipment) Collective to purchase products at a volume discount. As someone passionate about educating and inspiring others, Prince was happy to provide his perspective for entrepreneurs and investors during these trying times:

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Brian Penick: Are you currently investing or deploying capital?

Arabian Prince: I am investing in a variety of verticals even during these uncertain times because of COVID-19. I think now is a great time to look at what new offerings pop up because current companies, as well as future startups, are pivoting their technologies to adapt to the new way of working and living.

Penick: Regarding active investing, are you primarily focusing on new dealflow or prioritizing existing portfolio companies for follow-on funding?

Prince: I focus on both new deal flow and existing portfolio. I am an advisor for a few different funds on esports/gaming and entertainment tech. I have an advantage by seeing both sides of the coin, which helps me make investment decisions.

Penick: What types of deals are you currently focusing on during the pandemic vs. historically?

Prince: Because of the COVID-19 pandemic, I have looked at the biotech space, especially companies looking at solutions to the virus or those building infrastructure to help people and companies safely get back to work and life. I could not find many companies that offered a robust solution early on, so I partnered with a few of my tech partners and started our own company Covitech. Historically, I have mostly focused on esports/gaming and entertainment, as well as robotic and AI solutions.

Penick: What is your typical preference for round involvement (stage, lead vs. non-lead, etc.) and check size?

Prince: Anywhere from $10,000 to $10 million. My round involvement, as far as funding goes, has no preference. I look at the various stages, lead and non-lead, Angel or partnership funding, where I think I can add value to become one of the founders to create a better offering. I believe in being an investor with resources to help accelerate a project and bring a higher value than just capital alone.

Penick: What do you predict for the music industry and music tech landscape during the pandemic? What about post-pandemic?

Prince: I see a shift in the music industry to virtual live performances since there is no timetable set for the return of live events in venues. Companies, DJs and performers are looking at virtual live events to keep the revenue stream going, and brands are partnering with performers to advertise during these virtual events. One startup I am working with is Streoapp, which offers a live stream option for performances. I believe we will see more of this popping up soon.

Penick: What is the best advice you can offer entrepreneurs seeking funding during the pandemic?

Prince: Streamline and simplify your pitch and deck. Get to the point so that your product will shine for the investor quickly and get rid of all the fluff and inflated numbers that make it sound like your product is the greatest thing ever created. Investors see through that. Sometimes it's better to be a bit conservative with the numbers, show room for greater upside and always make sure you get to your ask before your time runs out if you pitch with a time limit. Another critical point is to find a niche. If you bring a product to market in a crowded space, make sure what you offer is special. Facebook, Instagram, Twitter and Youtube all use video, text and photos in a social platform but bring it to consumers in a unique way, all of which are successful.

Penick: What advice would you like to offer fellow investors during the pandemic?

Prince: Be nimble, and don't get stuck with a narrow vision. Now is a perfect time to explore the new prospects that are being built. I foresee a lot of amazing money-making startups that will emerge during the pandemic.

Penick: What advice would you have for other startup ecosystem members, such as the major labels/publishers/partners/clients of these services? Is now a good time to invest at discounted terms, explore free pilot programs or even make earlier stage acquisitions for a good deal?

Prince: Now is the time to find startups that can add value to your company. A lot of companies are hurting because they have not prepared for a virtually connected future. Small businesses and startups can help with technology that already exists.

Penick: Can you reference positive examples of things you have seen in the market since COVID-19 has happened?

Prince: There are many companies and startups that have moved swiftly to pivot during the pandemic. More DJs and performers are on Twitch, which is mostly a game streaming platform. You are seeing clothing brands making PPE supplies like Under Armor, Adidas and New Balance. So much is happening in the market.

Penick: Anything else you would like to share?

Prince: My vision is to create a platform and a path for underserved communities to get into technology and to understand business. Growing up in Compton, I know inner-city communities do not get the same resources to succeed. I am pushing to change that by showing how easy it is to get into technology, esports and gaming. I am pushing every successful person I know to do the same and mentor, mentor, mentor. I am working with companies and nonprofits across the country to build technology centers to access the community and access the hundreds of jobs available in the tech and gaming and entertainment space.

This series will continue to explore perspectives from early-stage music tech investors. Thank you to Arabian Prince for his contribution.