Thousands of unrecognized artists work late nights and weekends in their studios, basements and dorm rooms pursuing their creative calling. They will burn through their personal finances in this endeavor and tap their friends and family to be patrons or first time buyers. They will network at galleries and other artist events in the hope of getting noticed, getting a group or a solo show (getting their "product launch"). The "grind" of an artist is very similar to that of a startup entrepreneur.
Few will be successful, and most will "fail" at achieving any sort of financial return. Many will abandon making art altogether, or sideline it as a hobby. The talented, connected or just plain lucky artists will be noticed and get notable galleries or patrons interested. They will receive lots of money for their works and have dealers and collectors constantly buying. They will be written up in top art publications by prominent critics. Successful contemporary artists will make art that sells in the tens of thousands of dollars.
However being financially successful as an artist is a far less likely outcome than being financially successful as an entrepreneur. A talented developer has the skills that pay enough for him/her to work somewhere for a few years and save up money to quit their job and found a company. An extremely talented painter does not have that same option. More importantly there isn't the strong community and network of early-stage help, advice and cash infusions from others that the startup community has: the hundreds of incubators and hackathons, the micro-angels and other angel groups, not to mention the entire VC industry. Yet Art is a lucrative market and fine art has long been considered a safe investment.
Artists need a lot of the same help that startups do. I generalize here, but artists often lack money for supplies and want affordable studio space. They don't have the skills, the time or the access to proper marketing channels, and they don't have contact with gallery owners or art critics. Much of these resources come baked into startup incubators.
So why hasn't the investment model changed for art? Where is the emerging artist fund? The arts incubator/accelator? With the exception of the recent Kickstarters of the world (in 2012 more than 1000 funded projects on Kickstarter were in the Arts) there haven't been any disruptions in how art is funded. Why wouldn't something like YCombinator or 500 Startups which makes investments in hundreds of startups: bringing cash, counseling, marketing and its own network as a resource, work for the art industry? If $500K were spread out among 100 artists, what might happen? Like any investment portfolio there would be successes and failures, there would be formulas to choosing good art and bad art, good artists and bad artists, but the returns on a $5K-$10K investment in an artist that funds a whole body of work which could sell for $10K per piece (and continue to rise in value) has a lot of potential. If you end up funding the right artist their work could sell for hundreds of thousands of dollars.
Of course there are details that would need to be worked out for anyone who pioneered this type of investment strategy. There are no Series Seed docs for artists. It is not a common practice to "buy ownership" of an artist and once the work is sold to someone, you no longer have ownership of it. Generally speaking artists make money by selling their work privately or through a dealer or gallery. Galleries tend to take anywhere from 30%-70% of sales made through their galleries depending on what has been negotiated. Perhaps you get ownership of a percentage of the work made, thus giving yourself the opportunity to realize the appreciation of the value of the works as the artist becomes more famous.
I wonder what Paul Graham, Dave McClure and Ron Conway think of this idea? Their investment strategies have revolutionized the startup market. Could they apply them to the art market?