Inversion Art's novel artist investing model

Imagine if we approached investing in artists the same way VC’s invest in founders. That's precisely what Joey Flores (YC W11) is doing through Inversion Art. After Flores sold music streaming startup Earbits in 2015, he spent several years working in senior management roles before landing in the world of fine art. His idea was deceptively simple: “YC for artists”. But Inversion Art doesn't just sprinkle startup fairy dust on the art world; it fundamentally rethinks the career trajectory of artists.

To understand why this model has so much potential we need look no further than Sand Hill Road, where blue chip venture capital firms funded the greatest founders of the last several generations. From Steve Jobs to Mark Zuckerberg, elite founders have descended on the offices of Silicon Valley’s top VC firms to get the funding they need for over 5 decades. But what if we applied this model to artists, whose work enriches our culture?

Inversion Art does exactly that. It selects artists much like a VC firm picks promising founders. But instead of injecting capital in exchange for equity, Inversion Art buys a portion of an artist's work based on their previous year's sales. This isn't merely purchasing art; it's an investment in the artist's future potential, akin to a VC investment in a founder’s growth trajectory.

Here’s how it works:

• Artist Submission: Mid-career artists who are already earning a living from their art submit a simple inquiry to Inversion Art online to explore joining their accelerator.
• Initial Purchase: Inversion Art buys up to $100,000 of the artist's work, equivalent to 30% of their previous year's earnings. This purchase is not just for the sake of acquiring art; it represents a tangible investment in the artist's future potential.
• Future Buying Option: In addition to the initial purchase, Inversion Art secures an option to buy up to $500,000 of the artist's work over the next 8 years at a 15% discount. This aspect of the model mirrors the venture capital approach of maintaining a stake in the future success of their investments.
• Artist Services: Inversion Art provides 5 years of comprehensive studio management services, legal and accounting support, health insurance, and other perks that artists struggle to secure on their own. While artists pay for these services, they significantly lower the artists' operational burdens.
• Program Structure: Artists enter a 3-month structured program reminiscent of Y Combinator. This includes a period of intensive support culminating in a Demo Day, where artists are introduced to gallery owners, curators, and other art industry professionals, potentially opening doors to new opportunities.

What makes this model compelling is the way it mirrors Y Combinator’s famous accelerator program. Just like startups receive non-monetary benefits from YC, artists in Inversion Art's accelerator program receive more than just money. They get access to professional studio management services, freeing them from the logistics, marketing, and administration that can consume so much of their time. They also get a Demo Day, which helps them increase the value of their work the same way founders do when they present at Demo Day. The ecosystem of support mirrors the mentorship and networking opportunities YC startups receive, tailored to the unique needs of the art world.

Aside from evolving the business path that artists typically take, Inversion Art’s approach also sidesteps many of the legal pitfalls of venture investing, where ownership can change dramatically every time a startup brings on additional investors or replace a key executive. For Flores and Inversion Art, buying and holding the art is enough to lock in the upside as their artists grow in notoriety. They own 100% of the art that they purchase and are fully incentivized to help the artists whose work they purchase over long time horizons.

In Inversion Art’s model, each art investment creates a business partnership aligned towards a common goal: to see the artist succeed, grow, and enrich the world with their vision. It's a model that recognizes the unique value of creativity in our society and offers a new way forward for artists and those who believe in their work.

You can watch Flores discuss the model further below or listen to our full conversation wherever you get your podcasts.