What is a trio from the hip-hop music industry doing in the world of tech startups?

Seeking a mega-hit with customers and moving up the charts of venture capital.

Miami startup RecordGram was co-founded by Grammy-winning music producer Winston “DJ Blackout” Thomas, hip-hop musician Shawn Mims and music industry veteran Erik Mendelson. RecordGram’s music collaboration app awakens your inner musician and lets amateur musicians create original songs with award-winning music producers without expensive travel and studio time, said Mendelson, RecordGram’s CEO who has worked in the industry managing and promoting artists since 2001.

On the free RecordGram app for the iPhone or iPad, those inner-musicians can search for and upload beats to a virtual recording studio, write lyrics and record vocals for a professional-sounding audio file. They can also make a music video. Both songs and videos can be shared on social media or privately sent to producers. Who knows? The next Justin Bieber or Eminem could be discovered.

And if all that isn’t enough, fans might soon be able to tip their favorite emerging artists with RecordGram cryptocurrency through the app. More on that in a bit.

The company makes money by charging producers a subscription to upload beats and affordably lease tracks to aspiring artists, retaining copyrights. Since launching, more than 4,000 songs and videos have been created from the 750-plus beats currently available in the app. What’s more, there are at least three artists that major labels are currently trying to sign, Mendelson said.

The trio first came together in 2014 to work on another music creation app  but pivoted in late 2015 to the RecordGram concept.

The co-founders bootstrapped development, and were close to giving up. Then they were selected for Project Music, a Nashville accelerator backed by some of the world’s biggest record labels, management companies and music publishers. After finishing the program in May of 2016, they launched version 1 of RecordGram in the App Store.

But investment dollars did not follow.

To build awareness, Mendelson hit the contest circuit. After some wins, RecordGram’s big break came: It was selected to compete on the big New York stage at TechCrunch Disrupt Cup, after gaining finalist status as a “wildcard.” Well, this wildcard wowed the judges and was crowned the winner.

About the same time, RecordGram was chosen to appear on Apple Music’s original series Planet of the Apps. As part of the show, RecordGram pitched to Lightspeed Venture Partners.

Finally, the VC dollars began to flow. RecordGram received a $650,000 investment from Lightspeed, and Florida’s New World Angels kicked in $250,000. Monique Mosley, a television and music executive in Miami, also invested, bringing the round that closed last year to a cool million.

At the suggestion of one of RecordGram’s investors, the startup is planning to implement blockchain technology and cryptocurrency acceptance into its application. “We are creating a database on music rights on the blockchain that will enable transparent royalty accounting,” Mendelson said.

It plans an ICO pre-sale for its token generation event early this year. Paying with RecordGram’s “Tune Tokens,” music producers can upload beats and artists can secure rights to record music. Tokens could incentivize the community for loyalty and referrals, creating a network effect. Another use already big in Asia: Tokens can be used to tip or support the emerging artists.

The big picture: There’s an estimated $2.5 billion of uncollected royalty in the music industry. There is no global central database of music rights. Blockchain can solve rights and royalty transparency issues going forward, said Mendelson, who was attending the North American Bitcoin Conference in Miami in January.

“When I recognized the implications that blockchain technology has for the music industry, I knew I wanted to be at the forefront of this.”

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