Issue 208,  published May 7, 2019

Seed Investing, but for Podcasts

A new startup, called Podfund, has launched with a plan to “invest in creators that are poised for growth.” Interestingly enough, Podfund is headed up by Jake Shapiro, the CEO of RadioPublic, and the startup is positioning itself as “a strategic partner” of Shapiro’s podcast platform. The fund will operate on a for-profit basis — a reminder that RadioPublic is also a for-profit entity in the form of a Public Benefit Corporation — but intends to work with “creator-friendly terms,” allowing the podcasters that receive funding to retain complete ownership of their shows and the right to distribute as they choose. (Those terms, by the way, are available to read in full on the Podfund website.)

To start off, it has raised $2.3 million in seed funding.

The fund has been operating under the radar for a while now, apparently, having already made investments in Malcolm Gladwell and Jacob Weisberg’s Pushkin Industries, Middle-East based company Kerning Cultures, Jake Brennan’s Disgraceland, and Erica Mandy’s The Newsworthy. Applications are now open to the wider industry, and investments will generally range from $25,000 to $50,000, though there is the possibility for larger amounts and/or equity arrangements if appropriate.

In exchange for this initial investment, Podfund will take between 7 and 15 percent of the creator’s revenue for between three and five years, “depending on current traction, revenue, and projected growth.” Initial selections for funding are likely to be from US-based creators, but the intention is to open the fund up to international applications once the financial logistics have been worked out.

The aim, Shapiro said when we spoke yesterday, was to address the “common pain points” that creators with growing shows experience when trying to level up — to add another option in between raising venture capital or solo bootstrapping. “There aren’t that many sources of this kind of aligned support,” he said. “Usually you would face a trade-off or a steep hill to either join one of the very small number of networks or have some deal with a platform where there are significant trade offs in terms of your independence or what you’re giving away for that kind of investment.”

There’s definitely a need there — I’ve been covering these economic pain points for podcasters extensively in a recurring column for this newsletter over the past few weeks, and it’s a general theme for Hot Pod for as long as it’s been around — but I can’t help feeling wary of the idea that importing venture-style funding into actual podcast creation is the solution these problems, even if it does come without some of the more aggressive terms around ownership. No doubt the funding will be a boon to the creators who are selected, but it does feel like the fund (as with all investments of this kind) will still be in the business of picking winners and losers, helping some to bypass those pain points rather than shifting the system to eradicate them altogether.

Another aspect that Podfund hopes to offer to the creators it selects is a peer group. Nicola Korzenko, who serves as the startup’s general manager, said that they want to build a community for those “who don’t feel connected properly to the podcast ecosystem, because they don’t come from public radio, they aren’t friends with fancy producers or the inner circle, whatever that is… We’re hoping that this helps a generation of podcasters make it work and give them the fulfilment and careers that they’re hoping to build.”

Korzenko says this as a newcomer to podcasting herself, having joined Podfund from Amazon Prime Video with previous stints at the talent agency CAA and early stage venture capital fund Lerer Hippeau.

This combination of financial + administrative + community support makes Podfund sound a bit like a podcast network, albeit one with non-acquisitive terms for its shows. Which is to say, it sounds a lot like PRX’s Radiotopia. The major difference with Podfund, Shapiro emphasised, was that this was about developing businesses, rather than just shows. “It’s not for everybody — it’s for the ones who have this certain ambition around creating a sustainable business where the podcast is the cornerstone of that business,” he said. “I think it’s a really critical distinction to say that we’re investing in the creator and their business not just a show.”

Although Podfund will function as a separate company, it does exist in the wider orbit of PRX, since Shapiro is a co-founder and former CEO there, and current PRX CEO Kerri Hoffman is a board member of RadioPublic. Shapiro will remain CEO at RadioPublic as well as at Podfund, by the way — the two are closely linked, he said, but “this isn’t designed to be a single vertically integrated company,” which I think we can take to mean that RadioPublic remains a podcatcher and distributor of podcasts rather than also a publisher. [Nick’s note: Or should we say… A PLATISHER??]

Close co-operation allows the different companies to approach the same mission — to get more newcomers into podcasting — in different ways, according to Shapiro. “We’ve been both intentional and opportunistic about where the different pieces of the family play off of each other and differentiate where need be,” he said, going on to add that Podfund participants could also either come from or graduate to other parts of that ecosystem, like the Google Podcasts creator programme.

That said, Podfund says it’s interested in creators with shows at an earlier stage than would usually be of interested to a network like Radiotopia. Essentially, they’re interested in the Roman Mars of the 2020s, not the 2010s. Shapiro and Korzenko said that Podfund doesn’t have an editorial line, and they won’t be singling out a particular genre or style of podcast to back. They’re agnostic about the kind of businesses they want to back too, they say — everything from solo shops to multishow mini-networks are welcome.

Yet these PRX-adjacent organisations all have their roots in the public radio system, its culture, and its structures, and as such it’s difficult to see Podfund taking a radical step away from that background and funding an outfit that makes a really well-made conservative talk show, say, or a narrative show that wilfully breaks or derides all the usual storytelling rules associated with this area of the industry.

But who knows, maybe they can surprise us.