Buy Or Borrow Music: Striking A Chord
A forward-thinking entrepreneur from Odenville, AL is reshaping how musicians access the instruments they need. BuyOrBorrow Music, founded by Dave Karr, is a membership-based platform that allows customers to either rent or purchase high-quality musical equipment, offering a more affordable, flexible alternative to ownership. Drawing inspiration from the “access, not ownership” model made popular by companies like Uber and Rent the Runway, the company caters to the growing demand from Gen Z and Millennial musicians looking for cost-effective ways to pursue their passion.
BuyOrBorrow Music lowers the financial barriers for musicians, making expensive instruments more accessible without the need for outright ownership. Since its inception, the company has grown steadily, now employing four full-time staff, serving 600 registered users, and generating $400,000 in annual revenue. However, this success didn’t come without its share of challenges.
In early 2021, when Dave first began refining his idea, he knew the potential for a nationwide business but faced critical challenges. Recognizing the need for expert advice, Dave connected with the Alabama Small Business Development Center (ASBDC) in May 2021 through a referral from the Alabama Capital Network. At this point he had invested $120,000 of his own money, but still required additional capital to scale operations and bring his vision to life. The business model, which depended on both rental and purchase options, required significant inventory and a smooth e-commerce platform to handle subscriptions and transactions.
Securing an SBA loan was crucial to purchasing the musical instruments necessary for the rental business, but navigating the complexities of loan applications, business licenses, and market testing proved challenging. Additionally, Dave sought guidance on creating a minimum viable product (MVP) and preparing a pitch that would attract seed funding to support future growth.
The Role of the Alabama SBDC
The ASBDC provided critical support across several key areas that helped shape BuyOrBorrow Music’s success:
- Strategic Planning: ASBDC advisors helped the founder fine-tune his business plan and pricing strategy, and craft a focused launch strategy. Through consultations and feedback, he was able to test his pricing with potential customers and roll out a polished platform in August 2021, which included a professional website and active social media presence.
- Financial Guidance: The ASBDC’s Capital Access Program assisted with the loan application process, helping the founder prepare financial projections for lenders and advising him on banking options. This support paid off when he secured a $100,000 SBA loan in October 2021, which enabled the purchase of BuyOrBorrow Music’s initial inventory. The business secured an additional $100,000 SBA loan in Sept of 2022 following strong growth in the business. The team also provided advice on accessing additional financial resources through state and private investors.
- Investor Support: ASBDC guided the founder through the investor engagement process, advising on how to present to seed investors and draft equity offers. With continuous support from his ASBDC CAP advisor, BuyOrBorrow Music successfully raised $200,000 through a convertible note in early 2022 and later secured $1,500,000 in equity funding from an international investment group, along with $250,000 from Innovate Alabama.
Building a Business That Resonates
BuyOrBorrow Music’s innovative platform has struck a chord with musicians nationwide. By early 2022, the company had 66 paying members and was generating consistent revenue, turning a 30% profit margin on sales. Collaborations with local experts in financial management and digital marketing allowed the founder to focus on expanding his customer base while maintaining healthy cash flow.
By November 2022, BuyOrBorrow Music had grown its annual revenue to $100,000 and began attracting attention from larger investment groups. By August 2024, the company had secured equity financing from international investors and from Innovate Alabama’s InvestAL program, allowing further expansion and innovation. BuyOrBorrow Music is now in the process of securing a $500,000 line of credit from a commercial bank to fuel continued growth.
A Bright Future
With ASBDC’s ongoing support, BuyOrBorrow Music has grown from a fledgling startup into a thriving business. When asked about his ASBDC team, Dave says they “have all been wonderfully helpful to me during my startup experience!” Today, the company has four employees, 600 registered users, and generates $400,000 in annual revenue. Dave’s perseverance and ability to pivot, combined with key financial and strategic support from the ASBDC, have been instrumental in the company’s growth. His bold idea to democratize access to musical instruments has struck a chord with musicians nationwide.