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L2 Records

A Subsidiary Of Varner Enterprises

Closed on 08/11/19

38% funded (of minimum target)

min$10k

max$1070k

funding goal 

Reg CF

exemption used 

$1,200,000

pre money valuation 

$250.00

min investment 

$3,800

amount committed 

4

investors 

Security Type
SAFE REV
Simple Agreement for Future Equity AND Revenue Participation

SAFE:
$1.5 Mil Valuation Cap
REV:
25% Rev. Participation
4X Repayment Multiple
Bonus

For everyone who invests: a link to one of our artists unreleased songs.

 

For investors at $1K (50 packages offered): an invite to a single release or label event party.*

 

For investors over $2500 (25 packages offered): an invite to attend a recording session including hotel, private dinner with me and the artist, and private car pickup at hotel.*

 

For investors over $5K (10 packages offered): invite to attend a recording session plus release party or label event party with hotel, dinner, and private car pickup.*

*airfare not included

Pitch

Who are we

Varner Enterprises Inc. is a development stage holding corporation. As its first asset, the company acquired independent record label L2 Records. L2 is a wholly owned subsidiary that works with artists in the pop, EDM, and hip-hop genres.

 

 

L2 seeks like-minded and talented artists to develop into stars. We grow assets (our artists), monetize them through multiple channels, and position our assets for buy-outs or joint ventures with major labels. In essence, we follow the tried and true tech model where a small company reaches critical mass and is bought out, yet apply this paradigm to the multi-billion dollar music industry.

 

Problem

There will always be a need for new music. The music industry is dominated by three large players: Warner, Universal, and Sony. These three companies have a veritable army of talent scouts, known in the industry as "A&Rs," to help them discover and sign new talent. But even then, scouts for the major labels cannot be everywhere and discover everyone.

 

Also, because of the risks involved, the aforementioned major record labels typically do not take on undeveloped talent with no fanbase or traction on their own. In the past when there was more competition among major labels, they would sign emerging artists to "development deals" which were in essence mini recording contracts for a one or a few songs before potentially signing that artist for a more robust multi-album deal. These days are no longer, at least at the major label level.

 

Solution

Books

That's where independent record labels like L2 Records come in. We have our ears closer to the ground to discover talent earlier and develop that talent until they are "ready for the majors." It's like minor versus major league baseball: independent record labels like L2 take on the risk of signing and developing unproven but talented artists to hone their skills and grow their fanbase to the point where they are ready for the "major leagues."

Achievement & Traction

Varner Enterprises acquired L2 Records which, in its short operating history of less than one year, has already built a brand and industry reputation, has signed its first viable artist RIIV who has a solid catalog of singles, and has released RIIV's first single. This single has been used successfully to generate initial revenues through streaming (song and video), downloads, mass play and exposure, and building a social media personality with 10,000 followers.

 

 

Varner Enterprises has already proven that its marketing and promotion model can be executed efficiently and effectively with predictable results and is now ready to scale it provided the capital needed is raised.

 

Michael Varner has already met with major labels and key industry consultants and advisers to validate his implementation model, set up the right relationships, and have tangible objectives to target that will lead to the critical and highly desired major label co-development agreements.

 

Now launching a crowdfunding campaign and using InvestTechs, a digital agency with expertise in marketing multi-million raises, Varner Enterprises is setting the foundation to receive the necessary capital to execute its accelerated business plan in 2019.

 

Market

Independent Labels outpaced the Multinational Conglomerate Monopolies. In fact, the independent record sector has become the fastest growing sector of the music industry. Independent labels grew from $6.2bn in 2016 to $6.9bn in 2017, which was a growth of 11.3% year-on-year. What’s important about that figure is that indies outperformed the overall music market, which grew by 10.2% last year.

 

Independents also increased their total market share to 39.9% in 2017 with their growth outpacing that of the major labels, whose revenues grew by 9.7% that year.

 

Major-distributed independent music accounts for 8.6% of the total market, and 22.2% of the independents’ market share: it’s a significant sum that should be assigned accurately.

 

By the end of 2017, 176 million people were using music-streaming subscription services globally, according to the IFPI, which was up by 64 million in 2016. This growth in streaming—and in paid streaming—is great news for independent labels.

 

Independent streaming revenues grew by 46% in 2017 to $3.1bn, and now account for just under 44% of the sector’s overall income, compared to 33% in 2016. We’re approaching a tipping point—perhaps even this year—when streaming will represent more than 50% of revenues.

 

 

This growth is no accident: independent labels have been quick to adjust their businesses to streaming. 47% say that streaming makes their cash flow easier, but that rises to 73% for labels where streaming is already more than 30% of their revenues.

 

These figures also hint at another encouraging trend for independent labels: that their investment in artists’ long-term development, and in the album format, is an advantage rather than a risk in the streaming era. While major labels expend considerable marketing resources to break individual tracks, indies are investing for the long

One of the most heartening statistics from this year’s WINTEL survey concerns the 77% of artists who choose to renew their contracts with independent labels when they expire. That’s a reflection of the hard work that those labels have put in to help those artists develop their talent and reach their audience.

 

It’s also a reflection of stability within the teams at these labels who are working with artists. Based on this year’s survey, 42% of staff at independent companies have been there since the launch of the label – and bear in mind that the average label is 14.9 years old. The survey also offers a snapshot of the modern independent label: the average is 13.6 full-time staff, 3.2 part-time staff, and 97.6 artists in their catalogue. This latter statistic is relevant to the positive impact that streaming is having on independent businesses: a strong catalogue can build sustainable revenues.

 

“IT’S NOW EASIER TO HAVE A PATH TO LISTENERS THAT TOTALLY BYPASSES

THE MAJOR LABEL SYSTEM THAN IT’S EVER BEEN BEFORE.”

- Charles Caldas, CEO of Merlin

 

Source: Research and infographics courtesy of WINTEL 2018 Music Industry Global Report

Competition

XL Recordings. XL Recordings is a British independent record label founded in 1989 by Tim Palmer, and Nick Halkes. It forms part of the Beggars Group. Although only releasing an average of six albums a year, XL has worked with Adele, Arca, Azealia Banks, Beck, Dizzee Rascal, Electric Six, FKA twigs, M.I.A., Gil Scott-Heron, Jungle, Giggs, Gotan Project, The Horrors, Jai Paul, King Krule, Nines, The Prodigy, Peaches, Radiohead, Sampha, SBTRKT, Sigur Rós, Tyler, the Creator, Vampire Weekend, The White Stripes, and The xx. The label releases albums worldwide and operates across a range of genres.

 

Big Machine Records. Big Machine Records is an American independent record label distributed by Universal Music Group, specializing in country and pop artists.

 

Business Model

Varner Enterprises will follow a very specific model to monetize and grow L2 Records and similar subsidiaries in the future.

The framework is based on:

  1. Creating a Brand Awareness and industry reputation for the Record Label. This will help scout and attract the best emerging talent
  2. Invest into recording, production, and marketing of the Artist Catalogue.
  3. Creating a following and Personality cult for each artist under contract
  4. Using the following revenue streams to monetize the assets developed (songs, videos, artists)
    • Mass promotion and early exposure through Social Media
    • Use standard content channels for Streaming songs and videos that generate royalties and Ad commissions
    • Setup distribution channels for direct sales and mediated sales in the form of downloads
    • Create a Radio Play campaign behind each artists using Professional Pluggers, and Michael's in-person appearances
    • Develop a revenue stream based on publication and Sync (endorsements, use of music, etc)
  5. Grow and prove the Artist's potential by hitting and exceeding key Critical Mass thresholds that tell Major Labels artist is viable
  6. Establish a Co-Development agreement with a Major Label in the form of a major cash infusion to accelerate and scale the promotion and artists catalog recording model.
  7. Once the artist has been fully developed, use the Co-Development agreement as the pivot to a Contract Buy-Out. That is the Major Label will Buy-Out in part or in full the artist contract and bring to bear the full scope of resources to "explode" the artist. In other words, Varner Enterprises and each of its subsidiaries will be like a Venture Capital incubator that invests at an early stage in an emerging and promising artist. Will grow and prove the artist and position it for a Major Buy-Out.  This also implies there is a ration of about 5:1, that is one out of 5 well-scouted artists will be breakthrough artists, the other 4 will have the varying capacity for monetization and growing/profiting from over time, and one or two will be considered loses over time.

The key qualities are the ability for Varner Enterprises to have exposure and the right leverage to scout and sign truly promising artists, and for Varner Enterprises have access to capital to execute on the full model (sign, record, market, promote, Sell Out) for each artist. It also means Varner must quickly build a portfolio of the promising artist to reach the first Co-Development contract in its first year.

Team

 

Michael Varner will rely on his extensive expertise gained from a long and admiral career in Corporate America, as well as the many years spent as a DJ and Music Insider where he learned the music business from many of the best as well as had first hand experience on how the music business works.  He has decided to run the company lean and thus will outsource and delegate specific activities to expert consultants and advisers and manage the process from the top. He will also be directly involved in what matters the most:

  • Scouting Talent
  • Developing Relations with Major Label executives
  • Finding the best Music Producers
  • Working on the Exposure and Distribution

 

In year two (or before if the need arises) Michael will fill key roles with permanent staff. He's already looking for key individuals that can bring unique expertise, passion, and dedication to Varner Enterprises and L2 Records.

 

Thus the current model is to be lean and agile while benefiting from the expertise of outside consultants to achieve the best results at this initial stage.

Use of Funds

Updates

Michael Varner
Michael Varner2 months ago

RIIV Releases Debut EP "All Night"

After the success of his 2018 single "Beautiful," RIIV continues to build a promising career

 

Los Angeles, CA - June 28, 2019  Few have a story comparable to emerging artist and talented vocalist RIIV. Born in Haiti, RIIV experienced a difficult childhood as he moved to the U.S. to live with a father he barely knew. While living in a group home in his teenage years, RIIV found comfort and inspiration in music, developing a passion for the craft that has led him to where he is today. On July 19, RIIV is set to release his first EP, "All Night," a project that marks only the beginning of a promising future.

 

"All Night" is a dreamy daze of fresh-sounding R&B and synth-pop songs enhanced by RIIV’s impressive vocals. Within the 8-track project, RIIV sings about both the bliss and the pain of being in love with someone. "All Night" is likely to take RIIV’s career to the next level after his 2018 single, "Beautiful," which reached over 300,000 views on YouTube and 60,000 Spotify plays.

 

Beyond his melodic style of music, RIIV’s story is a powerful part of his identity as an artist. Despite being bullied and teased about his Haitian background and his high-toned voice, RIIV persevered with a positive attitude and an unparalleled drive to succeed. His early struggles as an artist have given him what he needs to become the next pop sensation.

 

Signed under L2 Records, RIIV and label owner Michael Varner have worked tirelessly to bring this album to fruition. "All Night" is produced by DJ Shaw-T, engineered by Grammy-nominated recording engineer Chris Anger, and co-written by RIIV himself and Ricardo Dresther. "All Night" is available for presave now on Spotify and preorder on iTunes, you can catch a video teaser for the lead track here.

 
 

About RIIV

 

Joseph Riverson, known by artist name RIIV, is a pop vocalist and unique artist who has defied all odds to make it in music. Despite early hardships in his life, Joseph was able to become the talented artist that he is today and to spread love through his music. With his debut EP "All Night," RIIV is sure to make waves this year in the pop music scene. Be sure to check out L2 Records’ YouTube channel where RIIV’s lyric video for 2018 single "Beautiful" has racked up over 300,000 views. Follow RIIV on Instagram to stay updated.

Michael Varner
Michael Varner4 months ago

Hey everybody reading this. Just checking in. You know someone asked me recently how I knew I could be successful in this, and I thought I'd share my answer - because I've made enough mistakes to know how to do it right! I'm sure you've probably heard sayings about mistakes being necessary for success so that probably isn't counterintuitive to you. I think it was Kevin O'Leery, or maybe one of the other sharks (Kevin is my fav tho!) that mentioned monetary failures/mistakes and how it speeds up the learning process exponentially. And let me tell you, I've learned quickly because I've had monetary mishaps like every entrepreneur - chose the wrong vendor or listened to the wrong advisor. But I did that with my OWN money, my own hard earned savings and credit worthiness on the line. I bet on myself, and every squandered dollar taught me lessons that take years to learn when you're paid a salary with someone else. So I told that potential investor that I was confident I would succeed because I'd already made all the mistakes on my own dime!

Michael Varner
Michael Varner5 months ago

Hey guys,

Michael here. Had a blast in Connecticut recording with Riiv and Chris! Check out our teaser for his new single, All Night:https://www.youtube.com/watch?v=KlgdynNKj-Y

Even if you don't invest, let me know what you think of the song so far! Oh and I was really tired that morning so if you think I look sleepy you're not wrong! lol

Michael Varner
Michael Varner5 months ago
FOR IMMEDIATE RELEASE:
March 15 2019
 
L2 Records, anounced a new single "All Night," part of the catalogue of it's singed artist RIIV.
 
A demo of the single was leaked on social media in February and based on a positive response CEO of L2 Records Michael Varner decided to accelerate the release of the single. A 3 day recording session has been scheduled in Connecticut with Grammy recording engineer Chris Anger.
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Q&A


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Michael Roman
Michael Roman - Investor5 months ago
Hi Michael, A couple questions: 1) How do your artists get to the point of streaming their music on major sites? 2) How do you make money from the music you produce?
Michael Varner
Michael Varner - Issuer    
Hi Michael. Thanks for reaching out and my apologies for the delay in replying. Good questions:

1. In the digital age getting your music to major outlets like iTunes is easy. Getting your music into retailers is called "distribution" and used to be quite expensive back in the day as it required pressing CDs and leveraging relationships with major retailers like Sam Goody and Best Buy. Fast forward to today and there are now digital distributors like CDBaby, Tunecore, etc. that give artists and independent labels access to major digital music outlets with the click of a button. We are fortunate to have access to AWAL, an invite-only distributor that vets its members and provides top quality distribution. They also provide monetary support once your song or artist gets traction on the charts.

2. The bulk of early revenue for artists and labels comes primarily from streaming sales and secondarily from digital downloads. Streaming the #1 source of revenue. Each time a track is played on Spotify or viewed on YouTube, the master rights holder (that would you us, L2 Records), receives money. The amount received isn't substantial, it's only fractions of a cent as a matter of fact, but those fractions add up! That is why I say, to be profitable, you need a hit! You need a hit song that will get streamed many, many times. Go look up your favorite songs on YouTube, look at how many streams they have, I bet it's a lot! Now take a fraction of that stream count and you'll have a ballpark of the money that can be made from just ONE hit!

5 months ago
Christopher Anger
Christopher Anger - Investor5 months ago
A comment than a question --> Simply here to express my feelings about Michael Varner and L2 Records. I'm honored to have worked with Michael and I want to share that he is one of the most passionate and focused individuals I've come across in the music industry. With over 20 years in it, I can tell his passion is genuine and he truly will make a much necessary impact in the future of music. I wish you give him and his unbelievable new artist, "RIIV" a chance to show you what they're bringing to the table!! This is an amazing opportunity!
Michael Varner
Michael Varner - Issuer    
Thanks so much for the kind words Chris!

5 months ago

Documents

Reviewed Financials View Download
Offering Statement View Download

Other Disclosures

Read the Form C filed with the SEC for other important disclosures, like financial statements, Directors, Officers, shareholders with more than 20% of voting rights, and more.
Irregular Use of Proceeds
The Company may make Irregular Use of Proceeds. Such Irregular Use of Proceeds, which may be in material amounts in excess of $10,000, may include by way of example and not limitation: Vendor payments and salary made to management, business associates, relatives, related parties and/or affiliates thereof; expenses labeled "Administration Expenses" that are not strictly for administrative purposes; expenses labeled "Travel and Entertainment"; and expenses that are for the purposes of intercompany debt or back payments.

Without limiting the above, the Company may elect to vary from the proposed use of funds as circumstances or assessments of circumstances following the closing change.
Special Note Regarding Forward-Looking Statements
This offering contains forward-looking statements within the meaning of the federal securities laws. We caution investors that any forward-looking statements presented in this offering, or which management may make orally or in writing from time to time, are based on the Company’s beliefs and assumptions made by, and information currently available to, the Company. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions, which do not relate solely to historical matters, are intended to identify forward-looking statements. Such statements are subject to risks, uncertainties and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties and factors that are beyond the Company’s control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. While forward-looking statements reflect the Company’s good faith belief when made, they are not guarantees of future performance. The Company expressly disclaims any responsibility to update forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Moreover, we operate in a very competitive and rapidly changing environment, and new risks emerge from time to time. It is not possible to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this offering may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. We undertake no obligation to revise or publically release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, prospective investors are cautioned not to place undue reliance on such forward-looking statements.
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