Nice to see some interest in what we're doing. Given the TC paywall and other misconceptions about how the art world and Inversion work, I thought I'd clear a few things up.
There are many different types of artists and many routes to success and monetization. We are initially focused on fine art because you cannot start out in other artistic fields and then be taken seriously by the fine art world. Also, the appreciating potential of fine art creates a VC-like opportunity, where a small handful out of 1,000 works will achieve unicorn multiples and return the whole fund many times over. We added an income sharing component to reduce our risk, but also to finance the offering of services that artists desperately need.
As artists achieve some success, the burdens of the studio become increasingly more difficult to manage. Things like invoicing, contract review, exhibition logistics, shipping, insurance, hiring assistants, managing payroll, etc., are all a distraction from their creative work, and most artists are not good at managing their business affairs. There are many, many companies that try to help brand new artists achieve sales, etc., but there are no scalable companies which help artists who are already making sales bridge the gap between earning a living and making enough money to hire a full time, competent studio director - to say nothing of hiring accountants, tax professionals, lawyers, etc.
Our goal when starting out was to invest in artists under a YC-inspired model. Right now, their only options for funding are mostly grants, which are time consuming and often provide very small amounts. The most equitable way to invest in contemporary fine artists is to simply buy a significant amount of work and hold onto it. Taking an equity stake in their studio would not be of interest to them, and there would be no liquidity events. So, we buy work and that is our "equity". On that work, we pay them a 10% resale royalty, donate 10% of our profits to charity, and other guarantees that are far more generous than 99% of collectors.
After many conversations with artists, it was clear that they are hamstrung by operations as much as they are by funding. Investing in them and letting them make terrible business decisions, or waste hours each week managing their own invoicing, would be a bad investment strategy. So, we added the studio management services as part of the value we bring. In the VC world, that's called Platform, and most great VCs provide some services to their portfolio in this way. We also needed to have an income sharing component to reduce risk, and offering services during the income sharing period ensures that artists are still seeing value as they pay back our investment.
Eventually, we hope to offer programs for commercial artists and other types of artists, but for now the unique dynamic of fine art appreciation and the branding requirements to enter the fine art market make that our beachhead market. We focus on artists whose work is likely to appreciate, which is a narrow group and requites solid traction to identify. We already have 7 artists we're working with. Their works are in most of the prestigious US art museums (The Met, the Whitney, LACMA, MoMA, SFMOMA, The Smithsonian, the Guggenheim, and others). Some of them earn our $50k minimum, or less in cases where we made an exception, and others earn very solid six-figure incomes. We have been providing all kinds of services to them - exhibition logistics including communication, creating 3d models of exhibition spaces to ensure proper installation, arranging shipping, and contracting with past collectors to borrow works, filing insurance claims for work damaged in transit, responding to inbound sales inquiries with marketing materials and invoices, monthly accounting reconciliation, and tax consultations, securing coverage by critics and publications, contract management, editorial direction for high profile grant applications, and contract enforcement.
These artists have joined us because we are super transparent about our model and our goals, and because our advisory board is highly regarded. They also join us only after 3+ conversations with our founding team, and sometimes after we have provided value to them before they even joined. We supported some of our artists for many months for free before we asked them to sign any agreement.
It seems most people in this thread don't really understand how the fine art world or our company operates, or how artists' careers tend to progress, but that's okay. I am happy to answer questions.
We don't want artists who don't need us much. Artists always have needs that they can't, or shouldn't, be handling for themselves. Even the top 1% of artists get services and support from their galleries or their own full time staff. But bridging the gap between starting to earn good money and being able to afford a qualified staff is very difficult, and it's the pivotal point in an artist's career where they may find themselves stalled because, with every new project, there are logistical needs that distract them from finding the next opportunity, or creating new, ambitious work.
We are working with artists who have achieved great traction but are not yet at the point where they can hire a full time studio director, etc.
Yes, this is spot on. And it is so hard to navigate doing this well, as part-time studio assistants require training, often leave when a new semester starts or they get their own solo exhibition offered to them, requiring replacing them and retraining that replacement. You're also only getting the skill set of those individuals, whereas with our company you're getting a team with a deep network and highly diverse experience. When our Artist Liaison doesn't know how to deal with something, they don't go back to the artist and make them handle it. They come to our management team and we help them do it well. We scale up and down with their income and operational needs, and our goal is to prepare them to take over our systems when they outgrow us and can afford a full time staff of their own, which we would even help them hire.
Inversion founder here. We invest by buying artists' work. One of the reasons they work with us is they are tired of relying on grants, which sometimes take weeks to apply for and can provide as little as $1k in funding. They are entrepreneurs running high-earning studios and they are tired of being looked at as charity cases. Given the people on our board, being involved with our company definitely adds to their brand.
See my comment above. We are already working with seven highly regarded artists. Their works are in the collections at The Whitney, MoMA, LACMA, SFMOMA, the Smithsonian, etc.
Most galleries do not provide production capital, and when they do, there become arguments about who owns the work produced. It's a very bad idea and the savviest artists we've worked with don't let their galleries pay for production.
We already have 7 artists we work with. They joined us because the language we use on our website is totally transparent about our plans and incentives. One of them is a Guggenheim Fellow who has had two institutional solo exhibitions just in the 6 months we have been working with them. One of them invented the NFT and has work in the Whitney collection. Another has works in the Smithsonian, the Guggenheim, LACMA, MoMA, and nearly every other major art museum.
Regarding 3 months being very short. We work with each artist for 5 years. It's only the residency that lasts 3 months.
It is great for you that you work with famous artists. I don’t why you’re being secret about who they are. I have a feeling that these famous artists did not enlist in your program but are advisors in your program. My guess is one of them is Dmitri Cherniak who’s really good and also the nicest guy on the planet, and he happens to have been through YC twice before becoming a generative art guy. So of course he’s going to try to help other fellow artists.
My general point is that with that kind of language, you will be appealing to tech-oriented SV-friendly artists, which is somewhat niche. If that’s what you guys want, then it’s all good.
Also: you’re wrong about galleries upfronting the production money, it is very common for pricey projects.
We're not secret about the artists we work with. I just didn't much care to use their names in a forum where people are being unnecessarily negative. We see it as our responsibility to protect their brand, not the other way around. I'm happy to answer questions, so instead of having "feelings" about who is involved and how, why not simply be curious and ask?
I like Dmitri's work and agree he's incredibly nice, but most "SV-friendly artists" are not going to see their work appreciate over time. Dmitri may be a rare exception but he's not one of our clients.
We work with traditional fine artists. Five out of seven are painters. One does conceptual work. Only one of them has anything to do with the tech world, and that's Kevin & Jenn McCoy, who minted the first NFT back in 2014. They, too, make mostly physical work. Our website shares two case studies.
I understand where you're coming from about the language. It has been a balancing act speaking transparently about the business and appealing to the sensibilities of traditional artists. But the program and the way we speak about it appeal to them because we're transparent, which is refreshing, and because our terms are very fair, thoughtful and equitable. We guarantee we'll hold work for five years, we pay royalties on profits, we promise not to take their work to auction unless their work is already auctioned regularly, and so on. These terms were all designed based on conversations with fine artists and a deep understanding of what's important to them. It's true that they are not used to seeing people talk so openly about the art market and financial incentives of art investing, but they are also not used to people taking such great lengths to design something that works for them. They appreciate our candor and it builds trust. Some artists are turned off by it, there's no question, but many find it a refreshing change. You have to consider that most are tired of the way the art world functions currently, and artists today have very different ideas about how it should work than artists even 10 years ago.
As for galleries funding projects, it happens, but most galleries except for the Gagosians and Paces of the world cannot afford that at all. Either way, it's rife with conflicts of interest and most savvy artists avoid taking gallery funding for production.
You're right that you cannot apply the tech VC model - without significant modifications that honor the differences between artists and entrepreneurs. But you're wrong about them not needing studio management services. We work with artists who are earning, in some cases, hundreds of thousands of dollars. They deal with contracts, invoicing, exhibition logistics, insurance claims, hiring service providers like photographers, and much more. All of those things require management that distracts them from creating artwork. If an artist can spend 20 hours making a work of art that would sell for $20,000 (aka, they earn $1k per hour), it is an absolute waste of time for them to spend 4 hours per week on these tasks. That's over 200 hours a year, and a theoretical $200k loss in creative output.
60% of the artists we work with already have gallery representation, and 40% have already been in the NY Times.
We do not offer artists to use "our lawyers". We have engaged a law firm that specializes in working with artists to help them with contracts and consultations on IP law, etc. They represent the artists' interests and we simply pay the bill. We do not support litigation and the lawyers do not advise them on their agreement with us. In the event that the artist has legal issues which could be a conflict with Inversion, they would be referred to another law firm to avoid any possibility of a conflict of interest.
If you look at our board of advisors, you'll see that we have top artists, top business people, respected gallerists, curators, and studio directors, all of whom know plenty about what artists need. Every single one of them has an incredible reputation and supports Inversion because they believe in both the mission and that we founders have integrity about our approach to achieving it.
Nice to see some interest in what we're doing. Given the TC paywall and other misconceptions about how the art world and Inversion work, I thought I'd clear a few things up.
There are many different types of artists and many routes to success and monetization. We are initially focused on fine art because you cannot start out in other artistic fields and then be taken seriously by the fine art world. Also, the appreciating potential of fine art creates a VC-like opportunity, where a small handful out of 1,000 works will achieve unicorn multiples and return the whole fund many times over. We added an income sharing component to reduce our risk, but also to finance the offering of services that artists desperately need.
As artists achieve some success, the burdens of the studio become increasingly more difficult to manage. Things like invoicing, contract review, exhibition logistics, shipping, insurance, hiring assistants, managing payroll, etc., are all a distraction from their creative work, and most artists are not good at managing their business affairs. There are many, many companies that try to help brand new artists achieve sales, etc., but there are no scalable companies which help artists who are already making sales bridge the gap between earning a living and making enough money to hire a full time, competent studio director - to say nothing of hiring accountants, tax professionals, lawyers, etc.
Our goal when starting out was to invest in artists under a YC-inspired model. Right now, their only options for funding are mostly grants, which are time consuming and often provide very small amounts. The most equitable way to invest in contemporary fine artists is to simply buy a significant amount of work and hold onto it. Taking an equity stake in their studio would not be of interest to them, and there would be no liquidity events. So, we buy work and that is our "equity". On that work, we pay them a 10% resale royalty, donate 10% of our profits to charity, and other guarantees that are far more generous than 99% of collectors.
After many conversations with artists, it was clear that they are hamstrung by operations as much as they are by funding. Investing in them and letting them make terrible business decisions, or waste hours each week managing their own invoicing, would be a bad investment strategy. So, we added the studio management services as part of the value we bring. In the VC world, that's called Platform, and most great VCs provide some services to their portfolio in this way. We also needed to have an income sharing component to reduce risk, and offering services during the income sharing period ensures that artists are still seeing value as they pay back our investment.
Eventually, we hope to offer programs for commercial artists and other types of artists, but for now the unique dynamic of fine art appreciation and the branding requirements to enter the fine art market make that our beachhead market. We focus on artists whose work is likely to appreciate, which is a narrow group and requites solid traction to identify. We already have 7 artists we're working with. Their works are in most of the prestigious US art museums (The Met, the Whitney, LACMA, MoMA, SFMOMA, The Smithsonian, the Guggenheim, and others). Some of them earn our $50k minimum, or less in cases where we made an exception, and others earn very solid six-figure incomes. We have been providing all kinds of services to them - exhibition logistics including communication, creating 3d models of exhibition spaces to ensure proper installation, arranging shipping, and contracting with past collectors to borrow works, filing insurance claims for work damaged in transit, responding to inbound sales inquiries with marketing materials and invoices, monthly accounting reconciliation, and tax consultations, securing coverage by critics and publications, contract management, editorial direction for high profile grant applications, and contract enforcement.
These artists have joined us because we are super transparent about our model and our goals, and because our advisory board is highly regarded. They also join us only after 3+ conversations with our founding team, and sometimes after we have provided value to them before they even joined. We supported some of our artists for many months for free before we asked them to sign any agreement.
It seems most people in this thread don't really understand how the fine art world or our company operates, or how artists' careers tend to progress, but that's okay. I am happy to answer questions.