Four years ago, Sanil Chawla began building Slingshot while attending the University of Southern California.
Now, after product pivots and redesigns, the startup hoping to be the go-to financial service platform for all creators and artists announced a $2.2 million pre-seed round with participants like the Dorm Room Fund and angel investor Vincent Francoeur, former head of web and mobile at Blizzard Entertainment.
Slingshot, once operating out of a West Hollywood house, is now fully remote with headquarters in Beverly Hills.
Chawla identifies his company as a fintech startup — targeting creators from the influencer sphere to the music industry to streamline financials like royalty payments, tax filings and payroll.
The concept came about while Chawla was working for the Annenberg Inclusion Initiative, a research lab that produces widely cited research on diversity in entertainment.
He met both A-list stars and budding artists who struggled to organize the accounting and legal backend to their craft.
“I ended up meeting a ton of people throughout entertainment and music,” Chawla said. “What became really clear is that there were just a lot of issues around dealing with business infrastructure.”
Slingshot began focusing solely on music, bringing music distribution and monetization onto one platform to curtail the immediate need for a music label.
But, as more artists joined the platform, Slingshot began fielding requests for other business management like taxes and employee benefits.
Today Slingshot targets creatives boasting a yearly income between $100,000 and several million dollars, self-employed or repped by talent agencies and music labels.
While large payments or funds funnel through its platform, Slingshot itself doesn’t directly hold any of its artists’ funds. The startup is directly partnered with the payment platform Stripe, but says it holds funds across a variety of banks including Goldman Sachs and J.P. Morgan.
Slingshot also offers artists a Visa commercial credit card — one where the credit limit is equivalent to the artist’s or manager’s account balance. This credit caveat was important to artists, who may need to put down five or six-figure sums for events.
“A lot of creators do struggle with that, where traditional banks will look at their creator, self-employed income and be like, we can’t give you a high limit based on that,” Chawla said.
Slingshot’s revenue model is two-fold: charging a 2% monthly fee of the revenue in each account each month, while also churning money on interest and interchange fees from its cards and bank partners.
The 2% skim off is comparable to the fees business managers typically charge for clients’ income. Percentages vary in Hollywood, but Slingshot says its rate is at a discount compared to the usual 5% to 10% range for managers.
Labels and talent agencies all dabble in handling talent’s taxes and expenses, but Chawla says these legacy institutions would have to invest thousands, if not millions, to build a comparable platform.
For Slingshot, Chawla said artist representation is not a direct competition.
“We’re doing a lot of the tech, a lot of the logistical, operational and financial management stuff,” Chawla said. “But you’re always going to need someone who’s going in negotiating for you.”
The $2.2 million in pre-seed funds will be used to scale up Slingshot’s team. Chawla sees Slingshot growing past a payment conduit. Lending between sponsor payments and building out billing portals were just some of the ideas thrown around.
“The dream is if you’re a creative of any kind, in any space, you can go to Slingshot and everything you need on the business and financial management side is handled for you,” he said.
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