TechCrunch Interviews CODE Advisor Founding Partners | Summary and Q&A

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February 24, 2010
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TechCrunch Interviews CODE Advisor Founding Partners

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Summary

In this video interview, the founders of Code Advisors, Quincy Smith, Samantha Green, Michael Marquez, and Fred Davis, discuss their new investment bank and their goals for the next couple of years. They talk about the history of banking and technology innovation, as well as their backgrounds and experiences in the industry. They also discuss the future of music and video, and how they differentiate themselves from other banks by offering long-term partnerships and additional services to their clients. They mention their plans for raising capital and their focus on the future of media online and offline.

Questions & Answers

Q: What is the brief history of the bank and why did you start it?

The founders recognized the need for banks with concerted efforts in the new media technology space. They saw the opportunity to expand the role of an investment bank and offer services like business development help, content rights help, and finding board members to their clients. They aim to be long-term partners to these companies and differentiate themselves from other banks.

Q: Can you talk about your backgrounds and how they led you to starting this bank?

Fred Davis, who comes from a law background, has worked with various digital media companies in figuring out how to monetize content on the web, particularly in the music industry. Michael Marquez started as a computer programmer before going into banking and corporate development. Quincy Smith has a background in corporate development, investor relations, and media. Samantha Green has experience in law and has worked with media companies to monetize music.

Q: How do you approach the monetization of music online?

The founders believe that the future of music monetization lies in finding the right balance between ownership and access. Some consumers still prefer owning music, while others prefer accessing it through streaming services. There is a need for different business models that cater to different demographics and preferences. They also mention the importance of creating a balance between limited free content and monetization.

Q: How do you view the future of video online and offline?

The founders believe that the future of television is video, and there is a great opportunity to extend the economics of television to online platforms. They emphasize the importance of selling television and online advertising in tandem, and making sure that the content is good and easy to access. They discuss the potential of TV Everywhere and authentication to provide a holistic approach to video monetization. They also mention the need to align online and offline pricing.

Q: Are clients embracing your long-term partnership approach?

The founders believe that there is a need for their services and that clients are embracing the idea of a long-term partnership. Although they are a start-up and haven't closed any specific deals yet, they are confident in their ability to offer additional services to clients beyond just transactions. They mention the importance of relationships and working with clients on strategic planning and development.

Q: How do you plan to raise capital and what is your fee structure?

The founders plan to raise capital in the future, but currently, they don't intend to raise a fund. They might consider taking in existing capital from supportive friends, but it won't be a significant part of their business. Their fee structure is transaction-based, similar to other investment banks.

Q: Are you running into conflicts of interest when working with different clients?

The founders mention that they are sensitive to conflicts of interest and would not work with clients if there are conflicts. However, as a start-up, they are still establishing their client base and assessing potential conflicts. They express the desire to work with both sides if possible, but they are aware of the potential conflicts and will prioritize integrity and transparency.

Q: How do you view the choices made by the music industry in the past decade?

The founders mention that the music industry made a series of mistakes but attribute them to the rapid changes and challenges they faced. They emphasize the importance of understanding the entire ecosystem, including artists, publishers, songwriters, and producers, and the need for a consortium-like partnership with the artists. They acknowledge the difficulty of finding the right balance between ownership and access in music monetization.

Q: Can you discuss the future of advertising rates for video online?

The founders believe that the future of advertising rates for video online lies in selling television and online advertising in tandem. They mention the importance of good content and the need for an infrastructure that allows for accurate measurement and third-party validation. They also suggest that the revenue from online video could be shifted from platforms like Google AdWords to the traditional advertising market, which offers more substantial revenue.

Q: What is the work environment like at Code Advisors?

The founders mention that they currently have offices in San Francisco and will be moving to a new space soon. They emphasize the importance of collaboration, relationships, and creativity in their work environment. They also mention the desire to fly coach and prioritize the success of their clients over extravagant perks.

Takeaways

The founders of Code Advisors believe that there is a need for investment banks that specialize in the new media technology space. They aim to be long-term partners to their clients, offering services beyond traditional transactions. They focus on the future of music and video monetization, emphasizing the importance of finding the right balance between ownership and access. They also discuss the potential of selling television and online advertising in tandem to extend the economics of television to online platforms. They plan to raise capital in the future and operate on a transaction-based fee structure. Overall, they are optimistic about the opportunities in the media industry and their ability to provide value to their clients.

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