Hello Benji.

Yesterday you posted an update for artists and fans who had used the PledgeMusic platform to raise money for their music projects. You said your efforts to save the company had failed and it was now driving toward bankruptcy.

Artists’ money – contributed by fans to pay for albums and merchandise – appears to be fueling the ride.

There are a few questions I have about your letter and your last “volunteer” stint at PledgeMusic, and the financing of the company in what may be regarded as its last days. Several of these questions been asked by others, including the Jesus Jones band and Peter McDonald on Medium.

Since you are the only person associated with PledgeMusic who has made any public statement of any consequence since January 2019, this petition is both properly and practically directed to you:

Update: Alleged Investment Pitch Reveals PledgeMusic’s Bad, Bad Numbers.

 

1. Why was your update edited, and what was changed?

I can’t find an original version, but Billboard (the first publication to write about your letter) appears to cite crucial passages from your update that are no longer there. In particular, a section about artists’ money left in PledgeMusic’s accounts being handed over to creditors – probably the most important information in the entire update – was quoted and paraphrased by Billboard but seems to have been deleted from your post.

Here’s the text in question from Billboard’s story:

The result of the unfulfilled payments left many musicians who had crowdfunded on the platform unable to deliver promised merchandise to those who had given them money. Now it appears those funds will instead be used to pay off the company’s creditors.
 

“The company will go into administration at some point this week or early next which means that any funds received for the assets of Pledge will be distributed to all of the creditors involved,” Rogers continued. “This will include all of the artists who are owed money.” …
 

Rogers continued by telling artists that he would let them know “as soon as I know” how they might themselves register as creditors in order to receive the money they’re owed. He noted that he is “not yet certain” whether FRP, the company named in previous reports as the administrator, would ultimately be appointed as such.

 

None of your quotes here appear in the current text of your letter and seem to have been edited out. Why? Did someone advise you to delete the part about artists and fans claiming their money as creditors?

Update: Rogers says the quotes are from an email intended for a “separate” audience:

 

2. Who has been making decisions for the last few months?

The company’s comms have been completely silent, even after you (in a since deleted tweet we captured here) begged angry artists and contributors to communicate through official channels and maintain a respectful tone.

The only information that has come from PledgeMusic other than leaks from anonymous sources has been from you. Why?

Related: How To Crowdfund an Album Without Going Broke or Looking Like a Tool

 

3. Where is co-founder and Global CEO Malcolm Dunbar?

 

4. Former CEO Dominic Pandiscia stepped down from the company in September 2018 – right when the reports of non-payment to artists from successful campaigns had reached a steady boil.

A company statement announcing new board members also mentioned the departure of “key members of the finance team.”

Why did Pandiscia and the “key members of the finance team” leave?

 

5. What were the terms of the Noisetrade sale?

Paste Magazine’s Josh Jackson said he could not discuss the terms of the sale in an interview.

Was it sensible to offload an asset just weeks before filing for bankruptcy?



 

6. Was there ever a real negotiation to buy PledgeMusic?

You’ve been at the tech start-up game for awhile, so I assume you would be able to tell a real negotiation vs. someone kicking the tires.

Having lost clients’ money (which would not be legally discharged under most merger or purchase agreements), with its reputation in tatters and – oh yes – it’s majority stockholder charged by the SEC with financial crimes right in the middle of it all – what was PledgeMusic offering to prospective investors?

 

7. What do you say to fans who held on to their pledges during these three months you were courting investors and can no longer reverse the charges because of the time elapsed?

And what about artists owned money? You retweeted this post from Hypebot about PledgeMusic courting investors:

This Hypebot story is actually sourced to an email from an anonymous PledgeMusic staffer “obtained by Hypebot and verified separately” which advised an artist owed money to “be patient as they wait for an update ‘on negotiations the board is having with a potential buyer.'”

Hypebot was careful to note it was “unable to confirm the accuracy of the staffer’s claim.”

But you retweeted it. Why did you retweet an unsourced claim advising artists to “be patient”?

Do you feel any responsibility for leading people down this dark road where everyone is owed money and everyone is angry?

 

8. Why were artist and administrative accounts being co-mingled?

A former employee told Billboard in February that PledgeMusic “doesn’t hold funds ‘on account for the artist,’ as the website’s terms and conditions say. Instead, the ex-employee alleges, PledgeMusic uses that money for ongoing operations and invests it in growing the company.”

Is this true? Does this practice date from your time as the company’s founder? Do you think co-mingling campaign funds with operational funds – paying for Jesus Jones’ album and your secretary’s dental plan out of the same pot – would be a poor practice that could lead us to exactly where we are now?

Did PledgeMusic also dip into artist’s funds for administrative or operational expenses when you were running the company?

 

9. When did the financial problems with PledgeMusic actually begin and, if not fraud, what was the cause?

Yesterday I heard from an artist who had (or so I thought) run a successful campaign on PledgeMusic in 2017. He alleged instead that PledgeMusic had “mishandled the payment from Pledgers and I lost 2/3 of funds already pledged. It was a complete waste of time and effort.”

Was this person an outlier, or did these problems begin even earlier than previously thought? What did you find out about the origin of problems with PledgeMusic and payments?

 

10. What role, if any, did PledgeMusic majority shareholder and director Joshua Sason play in the operations and strategic decisions of PledgeMusic before he was charged in a $25 million fraud indictment?

 

11. What role, if any, did Joshua Sason play in the financial agreement with Sword, Rowe & Company which, as was noted by Peter McDonald, was dated February 12 2019 – three days before Sason’s (unrelated) indictment?

 

12. The company’s finance team, as of October 2018, was “under the leadership of Richard Vinchesi, a partner at Sword, Rowe & Company.”

Sword, Rowe & Company is described as “one of PledgeMusic’s larger investors.”

What were the terms of this February 12 2019 financial agreement between PledgeMusic and Sword, Rowe & Company?

 

13. Why is PledgeMusic now nearly eight months behind in filing their accounts with Companies House?

Wouldn’t getting the company up to date with Her Majesty’s Government be the first step toward establishing fiscal health? What was the state of these filings when you rejoined the company?

Did you find out why, as Peter McDonald notes, filings in 2016 and 2017 were filed late as well? What is the state of these filings now?

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