Neil Patel

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In the vast landscape of entrepreneurship, some stories stand out like well-composed symphonies. Sam Hendel’s journey, originating from the suburbs of New York City, resonates as a melody of innovation and passion.

From navigating the worlds of finance to orchestrating deals in the music industry, Sam’s life has been a crescendo of risk-taking, calculated decisions, and a profound love for the arts. In this insightful interview, he offers a unique perspective shaped by hands-on experience in both investing and deal-making within the business realm.

His latest initiative is Accelerate Yale, which has acquired funding from several Yale alumni, including Sam himself and his co-founder Ted.

In this episode, you will learn:

  • The entrepreneurial journey, rooted in a childhood surrounded by culture and music, weaves a story of risk-taking, calculated decisions, and a profound love for the arts.
  • From managing a billion-dollar portfolio at 25 to co-founding Dataminr, Sam’s diverse experiences reflect a unique perspective shaped by hands-on involvement in both finance and deal-making.
  • Dataminr’s evolution from using Twitter as its initial dataset to becoming a world leader in AI real-time breaking news exemplifies the trio’s ability to take calculated shots on goal.
  • Chord Music Partners, Sam’s venture into the music rights industry, has become the world’s largest pure-play music catalog, owning assets worth $2B and reshaping the fan-artist relationship.
  • Jukebox, embracing fractional ownership in music, stands at the intersection of finance and fandom, raising $16M to date and allowing a broader audience to invest in the magic of music.
  • Despite acknowledging past mistakes, Sam emphasizes their positive role in personal growth, highlighting the importance of alignment and a creative approach in business dealings.
  • Sam’s involvement in Yale’s entrepreneurship ecosystem, promoting the Accelerate Yale initiative and a not-for-profit fund, showcases his commitment to fostering a supportive entrepreneurial community among alumni.

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    About Sam Hendel:

    Sam Hendel is an accomplished investor and entrepreneur with a passion for music and the arts.

    As the Managing Principal of Dundee Partners, a family office specializing in cultural investments, he has co-founded and led several successful ventures in the music industry.

    In 2021, Sam co-founded Chord Music Partners, the world’s largest pure-play music rights catalog.

    The company was created through the $1.1 billion acquisition of KMR Music Royalties II, which boasts a unique collection of 62,000 copyrights, including works by top artists such as The Weeknd, David Guetta, OneRepublic, Kid Cudi, Diplo, and Fleetwood Mac.

    Since the consummation of the initial acquisition, Chord has continued to scale and acquired IP from iconic artists such as John Legend, Twenty One Pilots, Diplo/Major Lazer, and ZZ Top.

    In addition to Chord, Sam and his family have also invested in media properties such as Knitting Factory Entertainment, Partisan Records, and Kino Lorber.

    Sam’s latest venture is JKBX (“Jukebox”), a platform he founded in 2022 to democratize music assets through fractional ownership.

    JKBX will allow catalogue owners and artists to offer shares of their royalty streams as a regulated security to retail investors.

    This innovative approach aims to deepen the connection between fans and their favorite artists and songs.

    Prior to his focus on music, Sam spent 20 years in the investment management business. As the President and Portfolio Manager of Easterly Investment Partners, he specialized in merger arbitrage and event-driven equities and credit.

    Sam’s journey as an entrepreneur began in 2009 when he and two former Yale University classmates founded Dataminr, the world’s leader in real-time AI for event and risk detection.

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    Read the Full Transcription of the Interview:

    Alejandro Cremades: Alrighty hello everyone and welcome to the deal maker show. So today. We have a really exciting founder. You know founder that he’s pretty good at putting deals together. You know we’re going to be. You know, really learning about putting transactions making it that making them happen. About the the journey to of starting things. It’s really amazing that he is typically not involved. You know as an operator with the companies that he decides to cofound. But again we’re gonna be learning quite a bit and really get inspired with today’s episode so without further ado. Let’s welcome our guests today Sam Handle welcome to the show.

    Sam Hendel: Thank you very much Aljandro appreciate you having me.

    Alejandro Cremades: So originally born in New York City but eventually a 2 you left to these suburbs so give us a walk through memory lane. How was life growing up.

    Sam Hendel: Ah, was great. I had a great great childhood I have very interesting entrepreneurial parents. Um, and yeah, we grew grew up in the burbs went to public school um maeric high school my mom um was ah had a ah undergrad degree in theater masters in theater. And then was a stay at home mom for 25 years um she’s really inspired me. Um, when right when I graduated college. Um, ah right right? right? when I was graduating college she started getting into it back into theater. Um, and she’s become a really prolific Broadway producer and has won eleven Tonys so you know she’s had an incredible entrepreneur entrepreneur entrepreneurial journey. Um, my father has been an energy trader commodities trader um now for almost for almost forty years I guess um and he also you know worked at a big at a big bank at Goldman Sachs for for a long time but then started his own business. Um in partnership with hess corporation and also took that entrepreneurial journey. So as a kid. Ah, have a lot of sort of entrepreneurs in the household and also a lot of a lot of culture. A lot of music a lot of culture. A lot of film.

    Alejandro Cremades: And what was that the experience for you of really seeing them going through the ups and downs to us entrepreneurs.

    Sam Hendel: Yeah, um, you know, ah from from a childhood perspective or or sort of as as an adult perspective. Oh gosh. Um I don’t know I think I had a really great warm, fun childhood. Um, and you know I don’t know if like you know.

    Alejandro Cremades: That’s right from a childhood perspective.

    Sam Hendel: I Don’t really know how much I saw from it if that makes sense but like my parents were always active in doing things. Um, they were always active always taking not not taking very broad aggressive chances. But but taking chances. Um and in their and their business lives and it was something that. I Just had a lot of um I was always surrounded by by interesting people. Um growing up. Um, you know it it was you know people in the Arts. Um actors um musicians going into the city with my dad and seeing seeing shows. Um, we we just had a very dynamic. You know, really great cultural childhood. Um, and I think culture is about taking chances art’s about taking chances and I’ve always had that I think nice ability to um, you know, ah take a swing and know that I was going to be okay and and and and I guess um I like taking shots on goal. Um, you know taking calculated shots on goal and if you fail you get back up and you try Again. It’s It’s what that’s what art is some people like it. Some people don’t I never had any um anxiety I Guess about um, taking a risk and and having myself be wrong. I was always ah, always excited to to try new things and ah. And I think that’s probably translated in some of the things I’ve done as an adult.

    Alejandro Cremades: So you ended up going to yale and you study the economics there and I guess that was the um, the entry point into the world of finance because then you did a little bit of everything there you know, did ubs. But then 1 thing that is very interesting talking about you know, taking swings and and and and risks. Is that you started at this hedge fund where you were managing a billion dollar portfolio at just the age of 25 I mean how is that for you I mean that’s a lot of responsibility at that age.

    Sam Hendel: Yeah I mean I guess it was a little bit accidental in some ways. Um I Always love trading and finance that was my dad’s business and coming out of college in 2003 like you know now and when people come out of college I think they have it. There’s a lot of there’s a lot more to do and startups is such a sexy thing to do back Then. It wasn’t on my I wasn’t on my radar and I got really interested In. You know the the trading side of it. Um, went to Ubs had had a great run there working at the prop desk um went over to a hedge fund in 2006 Um, and then in early 2008 Um, my portfolio manager I was an analyst doing riskcarb and event driven so you know, kind of companies going through mergers and big corporate events and my portfolio manager left and um, meet me and the other senior analysts were promoted a co-portfolio managers managing a a very large book. I Just I didn’t think about it. It was something that was I enjoyed it. It was fun I Love that deal dynamic. Um, it wasn’t just sitting and doing spreadsheets all day. There was antitrust. There was the kind of the human element at looking at companies and I was a generalist I could look at companies across any sector and I basically was very good at learning enough to be dangerous. Um, not not having to go. You know to to be the expert on utilities or on on casino companies going through mergers. Um I I can know enough to be dangerous and um and go deep on a sector. Um, and really understand the company and really more what can go wrong rather than what rather than what can go right? because that’s what risk our but investors are trying to accomplish.

    Sam Hendel: I Loved it and had a great experience. Um, you know and and and really I still enjoy. Um, the kind of trading in markets and things like that.

    Alejandro Cremades: Now At one point you know you got a call from one of your ah college roommates we changed everything you know and that was like more like entering the venture space. So so what happened there.

    Sam Hendel: Yeah, so I was I was at a firm called satellite asset management about a you know 6 or $ 7000000000 multistrat um and satellite is an amazing amazing firm. Um, and during the financial crisis. You know they they had a lot of senior security credit. Um, that went down a lot and you know the partners could have kept it going. They decided to to to you know unwind the firm and they had all done very well and wanted to do different things and I was you know twenty so I was twenty so I just turned 26 um, and um, they asked me to stay on for four months and sort of let my portfolio wind down which I did and I was going to take all of 2009 off and have fun I was single and um, going to have a great all time traveling I went away for about a month and a half um and came back and my college roommate Ted Bailey um gave me a call and was like hey I think Twitter is a dataset. Um, like what would you do with it. Um, and Ted Ted is a unique, ah unique person. Um, just a brilliant brilliant person. We were roommates all 4 years in college. He thinks differently than other people. Um, and um, ah, go into his stuff he he was he was working first. Um. For the minor league baseball team the bridgeport bluefish doing marketing and then he went to work for Lincoln Center doing marketing and he was trying all these interesting things with so with very emerging social media and it was it was too bureaucratic there really to to to promote some of his ideas so he took some time off had a mentor or told him hey just take some time off think about where the world is going.

    Sam Hendel: And Ted had this idea that social media was a data set and I was a great person to come with that because my my business in hedge fund land was you know was using data using information. Um and having to react to it. It was a event-riven you know, investing and trading um and the value of knowing something before anyone else knew it, especially when it was. Real-time public information was extraordinary and we were focused on 2 different areas there. There were 2 areas that I thought would be kind of good ideas to approach the the finance community with um one was um, sort of the long form. Um, sentiment around different brands or taking the brand Dell or Ibm. And tracking what was sentiment on social media around these brands especially consumer brands and could that be you know, influential on stock prices if you could have that information ahead of time. The other was real-time breaking news was that if I knew something that was happening in real time and even if even if it actually was a a hoax or a. You know, something something that that that that that wasn’t it could still move markets. Um, and if I could get that information into the hands of myself and other you know hedge fund professionals and and and private equity professionals um could be really influential and so that’s how you know, kind of data miner was born. And then I was at a a wedding a friend’s wedding. Um in Toronto this. So we Ted Ted called me I guess in April of 2009 um, in June of nine I was at um, my friend abbi sude’s wedding in Toronto and I ran into one of our our sophomore year across the hall sweetmate. Um Jeff Kinsey

    Sam Hendel: Um, and I told Jeff what he was doing in Jeff is it was also a brilliant person. Um Jeff is a computer scientist with a natural language programming background and he was working um at at a language lab kind of an mit affiliated language lab and um and and about a week after our conversation Jeff moved to New York became the third cofounder. Um, so that’s that’s the the initial sort of founding story and and we like were all all 3 of us went to yale um, and it’s sort of ah a good yale story because um Ted was an american studies major I was an ecom major Jeff is a computer science major and that was sort of the the ethos and start of data minor um.

    Alejandro Cremades: And obviously the rest is history. So for the people that are listening to understand you know the business model of data main minor. How do you guys make money. Okay.

    Sam Hendel: Yeah, so um, you know data min has become the leader and and that first area that I mentioned that kind of long form sentiment analysis. There were other companies doing that in particular for marketing. We yeah data. But we we kind of abandoned that fairly quickly in focus and just that real-time breaking news. Um, and as you said earlier. Um, I’ve had the pleasure I was actually never an employee of data miner. Um, you know we we built dataminer really starting for my use case in finance. Um, and I like to say um, you know I’m I’m very blessed to have smarter people than me, um, running and and making that company successful. Um, but we started with finances our first as our first use case effectively. Taking you know, taking that you know we’re taking Twitter was our initial dataset that we started with taking then in real-time having algorithms find news that was breaking and then make sure we are alerting relevantly alerting um hedge fund managers quantitative managers etc who who need to go and react in the market. Um, that was the the start of data min but data miners expanded tremendously since we started the company. Um, you know we’re we’re we’re the world leader for you know for for Ai for real-time breaking news. Um, and whether that’s you know, um, public sector customers like the department of defense or state and local law enforcement or allied nation government. Um, whether that’s on the corporate side. So you know our our corporate business um is is a very fast-growing business. Um, the news media. Um, you know and the news media a lot of news media uses data minor to effectively find and discover their news.

    Sam Hendel: Um, you know it’s it’s it’s used all around the world by as sort of the the line of first intelligence. Um, and now the company’s expanded from Twitter just Twitter to now over a million different data. Their Twitter are now x um to over a million different datasets. Um and those datasets. Work together. Um, we call it massive modal fusion Ai effectively taking. Um, there’s a lot of there’s value in one data set but that that value gets you know gets multiplied when you bring in all these other data sets that are helping to inform the Ai and helping our customers know what’s happening and and know what’s happening in real time. Be able to contextualize it and then be able to react.

    Alejandro Cremades: And obviously incredible company I mean you guys have there over 800 employees you know over a billion raised is that is that right.

    Sam Hendel: I think I think it’s less than 1000000000 raised but it’s it’s it’s close to that. Um, you know, ah probably in the 6 or $700000000 range I think um yeah.

    Alejandro Cremades: That’s amazing that’s amazing now 1 thing that is a really interesting as part as part of your journey as an entrepreneur Sam is that you have not worked being operational really at any of the companies that you co-founded why why is that the case.

    Sam Hendel: Um I don’t think I’d be very good at it. Um, and I think what one area and um, you know I I I think like you know when when it comes to and you know it comes to data minor or the the company. Um I so I started recently. Jukebox um, you know it’s a timing. Right? I think there’s there’s the right people to run a business. Um and I always want to always want to find you know thinking about new companies ideas can succeed or fail. They can be the best idea in the world but they can succeed or fail based on the right team and the right people running them. And anything I’m doing I’m always looking for like if I’m not the right person to run something and I had the idea and I have a mechanism to get a company started I should go out and find a team and um I’ll but I think I’ll go into juke jukebox and and really cored music partners and in some more depth. What I’m doing now I’m actually spending 100% of my time in the music business. um but um I don’t have much of an ego and generally like I don’t need to be the guy running something I love finding and backing great entrepreneurs I love to angel invest and you know and and and I do a lot of I’m very very active. Um in the yale community right now. Um I started a not-for-profit. Um, called accelerate Yale where where they you know ahum effectively the the ah the yale alumni um, entrepreneurship organization affiliated with the university um, just trying to get people together or have them network alumni to alumni alumni to student and create ecosystem.

    Sam Hendel: I Love that stuff. Um I Love backing Great entrepreneurs.

    Alejandro Cremades: So Then let’s talk about you know the next deal that was really very very exciting and also very challenging to put together that was court music. Partners I mean you were alluding to it earlier. How you’ve had the creative Side. You know of you and then also in the family with your mother. So So how did the whole idea of court music partners. Really you know come come knocking.

    Sam Hendel: Yeah, so you know going I’ll go back to that kind of one nine period um you know we started data minor in April of 9 is when Ted called me I think we incorporated the company in in July um, and I started a job at a hedge fund and another fund called levin capital strategies a hedge fund slash investment firm. Um, you know doing um the same thing ricarba Eventriven and I had a great 12 years um working for an amazing guy named John Levin um and um and you know I was a portfolio manager there and then but but by the end of my time I was president of the firm. Um, but um, my family’s always been involved in. Culture or music and I mentioned my mom earlier. My dad also is extremely active in that space either. So as a family. Um, you know we um were the we’re the the largest shareholder of the knitting factory um, we’ve we’ve had that that controlling position since um, since year 2000 knitting factory is a a music venue business. Um, we have one we have 1 in in New York we have one one in Los Angeles a bunch in the pacific northwest we started a record label out of that called partisan records um partisans become a really you know important. Um you know, independent label our biggest band there cigarettes after sex spontane Dc idols. Um, and we also um, we we distribute the music of fella coie. Um, who’s an important figure here for chord um fell as the most famous musician ever out of out of Africa. He’s an incredible and he passed away and ninety ninety seven but he he invented afro beats um or afrobeat excuse me.

    Sam Hendel: Um, and um and and fella is um, you know my my dad fell in love with his music and his life story ended up doing a broadway musical about him back also in kind of 2008 2009 ten eleven timeframe. Um that that that won a few Tonys and was ah an um, an amazing experience for our whole family. Um. And that kind of led to what what? What we’re doing with chord a little bit. Um, what you know I had become friendly about a decade ago with another incredible entrepreneur named Willard audrets um Willard founded a company called cobalt um, a music business a little over twenty years ago and col cobalts the leading leading dependent music publisher. Um, you know Willard started that business as swedish entrepreneur. Um and he had um, effectively an operating business that would go and collect um that they would represent you know major artists like max martin songwriter max Martin Paul Mccartney um their music’s administered by cobalt. Um, and cobalt you know does the sync licenses they collect on behalf of the artist they they administer the works. Um, they also had developed a fund um about you know eleven or twelve years ago and started a fund um because something ah their business was based on transparency was based on. You know, um, the artists being able to see how much their their works did to see the revenues. Um, and that was a big innovation and really changed change the music industry what Wilt Willard and what cobalt did changed the industry to create more transparency for artists but they weren’t in the business of acquiring catalogs.

    Sam Hendel: Um, and so they set up an Off-b balance sheet vehicle a fund a fund structure 2 fund structures um a smaller one than a larger one distort to start acquiring music catalog from the artist that wanted to sell their rights and have have a monetization um and a couple of years ago um you know Willard reached out to me in early Twenty Twenty one um he and I had become friendly, um and he he he and also really my dad had had become quite friendly. Ah but he reached out to me. Um, you know, saying that the the shareholders of the fund were interested in selling would you take a look at it. Um, and I have ah a dear friend of mine and guy named John Chapman um ah who we been doing some you know some investments together with for a while. Um, he lives in Stockholm. Um, and I called him up and said hey let’s start jamming on this. Um and we started working on very very this this large deal. Um, and how to get up to speed very quickly in the music business but effectively this catalog um was one of the largest independent catalogs in the world. Um. Doing about 60000000 of of Nps. Ah yeah of really effective cash flow per year with artists like the weekend David Geta um Stevie nicks Fleetwood Mac um Diplo um, just a really broad diversified catalog and um. I can go I can talk forever on this one but we um, we ended up um Willard I think really really wanted us. There were a couple of other parties looking at the catalog but will Willard wanted us to to to purchase it. Um and we set up a quite a complicated deal I started a new company called chord music partners.

    Sam Hendel: Um, and it’s ah a joint venture um with with with our family office Dundee Partners and Kkr um, and we partner with a great team at Kkr led ah led my woman named Jenny Box um and um you know we’ve we’ve effectively taken that initial catalog that initial deal was a one point one billion dollars deal um, and then we’ve expanded that pretty significantly. Um, you know close close to $2000000000 in assets there. Ah, last couple of years we purchased john um, part of john legend’s publishing easy top um major laser 21 pilots and and other iconic artists. Um, but we have ah a very broad diversified portfolio of music rights and and right now we’re we’re the largest pure play music catalog in the world and um I have the benefit now of of being able to have my passion Music’s always been my passion. Um I have a very low voice. So I I do ah I do a radio show every week on ah on 2 stations. Ah, ninety five nine the fox in fairfield county and 94 through the shark on long island on music for many years now. Um, but um, you know I’ve had the but the luck of having my passion become become my business. Um. And court. It’s it’s been an incredible journey and I hope to be doing this for a very long time. Um, you know we’re working with artists and acquiring iconic catalog and and helping to create deeper fan connections between their favorite music.

    Alejandro Cremades: That’s amazing now I was part of this journey to yukbox came knocking at what point and why did you take action on this.

    Sam Hendel: Yeah, yeah, so when we were putting together that deal to acquire chord and this is you know middle of 2021. Um I had three sort of pillars of our investment. Um, first pillar was you know. Do it do a good deal at a good price. We paid it. We paid a full full price for the asset this was was not a bargain basement price by any means but it was a unique iconic asset. um and um and and it was an off market deal. Um, so you know do a good deal. Don’t overpay but do a deal at a fair price number 2 is um. The rollup strategy in music. Um, and um, this is still still a very big opportunity and something that I’m spending a lot of time on right now but the rollup strategy in music effectively. The large catalogs diversified you know, highly diversified catalogs traded ah at a higher higher multiple than individuals single artist catalogs. Um, that’s for a couple of reasons one the the diversity of the large catalog gives more ballast to be able to you know, get get financing from the credit markets. It’s safer asset and something happens to an artist. An artist does something that’s. Um, you know, then you know you you get a little ding but it’s not a huge ding and so and and the the music space. Um music we we view music as an asset class. Um, it’s a special as but very special asset class. But it’s 1 That’s recently become kind of an institutional asset class over the past six or seven years

    Sam Hendel: Um, you know, ah and also another entrepreneur Merrk Mercuriois started a company called hypnosis and has you know, but been a pioneer in that space and a few others. Um you know, sort of you know, realizing that music and these very consistent cash flows um coming from the space um is an asset class and you can’t just sit there and do nothing. You also have to work with the artist. Do that storytelling around it. Um that that we love doing um, but that rollup strategy you know we have a big diversified catalog. Let’s buy other assets underneath that these single artist catalogs trading at a discount use the financial markets to to do that carefully and conservatively. Um, and continue to add value to active management and we we think that we think music is materially undervalued. Um that the cash flow streams are my music and so sorry I’m going to too much depth on this but um, I’ll get to juke bus I promise. Um, but the music industry earned um right around $55000000000 on a dollar adjusted basis in 9099 this is just the global recording and publishing industry that’s at the height of the cd boom and then Napster and you piracy eviscerated the revenues in the business. Um streaming um which come. Comes out of that piracy that kind of the use of technology. Um is now a big benefit of the music industry and the industry now earn earns $35000000000 here you know twenty four years later it’s earning $20000000000 less than it did in 9099 and and and we think there is a significant path to have the industry double over the next eight or so years

    Sam Hendel: Um, for the benefit of rights, holders, artists, etc. Um, but there’s you know the digitization and technology now should benefit the music right? The music rights holders. But we’re we’re looking at a situation you know with with chord and this is the third pillar of the stool for for that initial chord investment was that this asset class is becoming an institutional asset class. But it’s also the perfect asset class for for the public. It’s it’s not a retail asset class yet. Um and from fractional ownership perspective which we followed very closely. You know web 3 and the ability to have community involved in something you’re seeing that in real estate. You’re seeing it in patents. You’re seeing it in Farmland. Um, the ability to take smaller slices of assets that are unavailable. Um, and and and and have a broader public and an investor be able to um, develop a deeper connection. Um to to their favorite things. That’s something that we became quite passionate about when we were putting that initial deal together. Um, and this music is an asset class institutional now. But there are really 6 or 7 players that are you know, very aggressive and actively in the space. Not a very big space. Not an open market. Um, how do we take this asset class and open it up to the fans and and create. Even. Not just the cash flows but also create a closer relationship between them and their favorite music and that’s kind of where how jukebox was born. Um, we honestly I honestly thought I wasn’t going to start a company we planned on partnering with an existing company doing fractional ownership for music and um.

    Sam Hendel: We closed the deal in October of 2021 and I spent a few months and my partner John and I spent a few months you know talking to all the companies that were sort of doing this in the space. We had this humongous catalog. Amazing modern lots of pop lots of hip hop like great things that connect to fans. And we honestly we couldn’t get comfortable with some of the regulatory approaches that others in the space were taking um, it was pretty clear to us that it’s a cash flow. Um, you know a cash flow falls under if you’re going to sell a cash flow bundle up cash flow. It’s a security and there’s no if sans it’s in butts about it. It’s a security. Um, and a couple of companies were doing this um and cutting that corner. Um, so after a few months of sort of looking to partner. We decided my John and I decided hey let’s let’s just start it ourselves. Um and going back to your question earlier. Alejandro um, we knew we were not the right people to run the company. Um, we we were just you know that’s not my skillset I’m not native to the music industry. Obviously I’m very passionate about it. Um, but we went out to go. Let’s go build a team. Um and I hired a friend of mine. Um, who co-runs ca’s executive search business danny birkkhoff and I said you know Danny here’s what we’re doing. Um, you have all these connections. Let’s go. Let’s let’s try to build a team and the first hire was a Ceo and I got extraordinarily lucky um and a lajandra I promise I’ll stop in a second let you guys you guys more questions extraordinarily lucky and and and um and and meeting another entrepreneur named Scott Cohen um

    Alejandro Cremades: O god.

    Sam Hendel: Scott. Um Scott was the founder of the Orchard. Um co-founded the orchard in the mid 90 s um or the orchard is the world’s largest. You know music distribution business. Um Scott sold the business successfully to Sony in 15 ran it for another 4 years he was the chief innovation officer at Warner Music Deep deep industry connections. Um, he’s an incredible technologist and someone who really studies the business of music and I hired Scott as the Ceo for jukebox um, and um, he’s done an incredible job building a world class team around him a team of people who love music and are passionate about that. Connection between artists and fans and doing things with with a strong regulatory rapper to make sure that we’re protecting the you know protecting the public protecting the investor and making sure that there’s trust and the ability to take a very large asset class in music and now you know ah open it up for for investors to be able to to to purchase. Um, and something that that that I believe is ah is is ah is is is a unique special asset class.

    Alejandro Cremades: And obviously the rest is history too for yukbox and how much a capital has the company raised to 8

    Sam Hendel: Yeah, jukebox is raised. Um I think it now $16000000 um, we we we did around. Um and I guess very late last year or early twenty Twenty three led by galaxy digital um and have really curated the investor list to make sure we had a combination of. You know, sort of the um, the the financial some of the the web 3 wherewithal um, but sort of the sort of the the future of finance. Um and also bringing in you know, strategics around the table so you know galaxy digital led the round valor equity partners is also a big investor in data miner is an investor. Um, a firm called Mawick um, that’s an amazing firm in the midwest another Vc firm invested in the company and then um, we we have a broad base of strategics. Um, we have great partners in Sweden the bon your family um is also a strategic investment in the business. Um, live nation invested um, red light management which is the the largest management music management company in the us the burtlesman family who own who controls Bmg. Um, which is a large music company and then we have a name I can’t disclose ah a very large. Um. Music streaming service based in Europe I’ll leave it at that.

    Alejandro Cremades: Um, now when it comes to deal making it sounds like you know that’s definitely a strength that you have when it comes to to really getting those deals done. You know whether it’s raising money whether it is you know getting someone on board. You know like a Ceo that has incredible expertise. What would you say is the biggest lesson that you’ve learned about getting deals done.

    Sam Hendel: Um, yeah I Guess like I’m I Either there there are there are many different types of people who do who do deals like I think we try to lead with kindness and excitement and um like finding alignment finding ways finding ways to build alignment. Whether that’s alignment with the seller whether that’s alignment with artists around the table whether that’s alignment with the industry that you’re going into. Um you know I really try to think deeply you know how do how do? How do I fit into the deal Dynamics. What are the social aspects around it making sure that. That that we can. We can find solutions that that that everybody wins Um, with that that catalog this was a great result for for the investors in Cobalt Capital Um, great result for the for the for the team at Cobalt. Um, we actually ended up doing another deal with Cobalt’s operating business. And we help facilitate Um Francisco Partners Um, acquiring Cobalt’s operating business and we’re a minority shareholder there. Um and and and and in both all these cases we’ve had very happy buyers and very happy sellers. Um, and those are the best deals. It’s not a deal where someone you know pulls the wool over someone. It’s the deals that. Um, you find alignment you have reasons on what why things happen on both sides. Um and bringing people together. Um, and it gets complicated. There are ups and downs and all these deal processes is Illegal. There’s corporate. There’s tax. All that fun stuff and I’ve had an amazing sort of now.

    Sam Hendel: Frontline view from my days investing in companies and now helping put these deals together. Um, but you know you have to understand people’s motivations and um and and make sure that everybody wins at the end of the day and you’re moving things along even when they’re hiccups in the process.

    Alejandro Cremades: I love that now. Let’s say I was to put you into a time machine some and I bring you back in time I bring you back in time maybe to 2009? you know that moment where you’re getting the phone call from your college roommate you know from Ted and let’s say now you have the opportunity of being right? there. You know sitting next to to that younger self you know that is receiving that call and just hang it up. You know they call from from speaking with Ted and speaking about what became that minor but let’s say you were able at that point to give that younger self one piece of advice before launching a business. For co-founding a business. What would that be and why given what you know now.

    Sam Hendel: Well, it’s funny I would say go go back and don’t make the same mistakes you made. But actually I think the mistakes were beneficial I would certainly say um, don’t hire a very expensive law firm and don’t set up a complicated share class structure when you’re starting a business. Um. 1 area I guess would would say I think there’s a value in having a conscily area especially on the legal side having someone you really can trust on the legal. We didn’t do any major footfalls on that. But we overcomplicated things. Um and probably spent too much money. Illegal and data minor um I I think I would still tell myself. You’re not the right person to run this um let smarter people than you run it and I’m doing that again right now. Um, so that’s that’s a yeah positive one but I wouldn’t tell myself not to make mistakes the mistakes are what makes you better? Um I’m probably making some mistakes right now with jukebox um you know but um the mistakes make you better and um I think it’s a good thing to be able to take take the swing so I mean the the luckiest thing in the world that happened to me was you know? yeah, having the the fund I was at you know shut down um and get and you know and and and and and and leave. That’s the best thing that happened to me. Um, one other area I would probably focus myself on even when we’re doing it again here. But um, that alignment. Um, how do you find alignment with data minor um, you know, ah we Ted and I invested in the company. Our our parents invested in the company. We didn’t really know what we were doing. Um Jeff was an incredible technologist and we had just a great.

    Sam Hendel: You know, great core core groups starting the company together. Um, one thing we did really well was we we brought in our customers as our investors I mean it was completely insane but we had this is a chosen nine s and no one was really very few people were starting companies but we had 65 different angel investors. Um, in our first round and then kind of bridged to the next round. A lot of them. You know friends of mine in finance writing $25000 checks into the company many of them their first angel investment. Um, but they were our customers. They were guys who buddies of mine who worked at hedge funds friends that worked at investment banks and we were beta testing with with everyone um because our investors were were in that space. Um. And that’s our Twitter caught wind of what we were doing because you know we we were you know talking to every big finance firm and we ended up doing a data deal with Twitter we use that data deal. We um, we brought in Incredible Partners Investment Partners um ivp and venrock and nick bimes still on our board. Um and has been been been a great partner to data miner. Um. You know mistakes um, lot lot lot of mistakes. But um I think it’s what 1 1 mistake is I think it’s good to to iterate on product. We were probably a little early in iterating on product. We luckily had friendlies looking at the product. Our first product was terrible. Um, Twitter was a really really hard algorithm to crack. Um. And our first product was awful. Um, we probably could have got to waited a little longer on that. But um, it was really helpful having our friends and our investors be able to beta test the product help us you know, get to the next step I mean I I was working I was you know working in my my hedge fund.

    Sam Hendel: Looking at bloomberg every day and trying to see whether data miners feed beat you know, beat the Bloomberg news. Um, it was a lot of fun.

    Alejandro Cremades: I hear you so Sam for the people that are listening that will love to reach out and say hi. What is the best way for them to do so.

    Sam Hendel: Oh probably? um I’m on Twitter you know on x at Sam Hendel: um you know I’m on Linkedin. That’s probably probably the easiest thing. Um, you know happy happy I love talking to young entrepreneurs. My bandwidth is a little stretch right now. But um I try to get back to everyone and um. You know, um, and and in the in the yale ecosystem really passionate about what we’re doing there um particularly any any yalles out there? Um, yeah, please check out what we’re doing with accelerate yale the why startup index we’re doing a really fun thing. Um, we we have ah a small fund. A lot of yale entrepreneurs have invested Kevin Ryan um Sean Glass from hire from hi 1 my friend Noah Glassett Olo Jenny Fleis’s front the runway Ted and I from data min invested in in this and we everyone puts in kind of 25 k a year and then any yale foundunded company that’s raised over 450 k and outside capital as a scalable business. And has runway will write them a $25000 check automatically um, and the fund takes carry every year we’re donating 100% of our carry back to Yale University for entrepreneurship. Um, and really trying to use this It’s a not-for profit fund. Basically we’re just trying to create ecosystem. Um, and I’m really excited about what’s happening at the university and the entrepreneurship there. So you’re a yelly and listening. You know, please reach out.

    Alejandro Cremades: Amazing! Well hey sam thank you so much for being on the deal maker show today. It has been an honor to have you with us.

    Sam Hendel: Thank you all Handra I appreciate it.

    *****

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