Culture Vs Capital: The Most Important Debate in Club Culture

I attended the IMS (International Music Summit) in Ibiza last week. The overall theme of the conference was “Reclaim the Dancefloor” - a nod to the issues surrounding social media, phone, private equity, and a general sense that we are moving away from the values first associated with rave and club culture.

One of the only panel discussions that did discuss this at the conference (that I’m going to crown the spiciest panel at IMS) was called “Culture vs. Capital: The Ethics of Investing in Electronic Music”

This isn’t the first time the culture vs. capital debate has been discussed, and in fact, it’s being discussed more than ever in niche circles. 

What’s changed since the start of the rave movement isn’t the presence of capital, it’s the type. We’ve moved from passionate founders - betting their own money and staying for the love of the game - to institutional capital, with a fiduciary duty to their investors and shareholders.

Let me set the scene. The debate is a simple one, but it quickly and easily divides opinions.

The topic was around whether external capital injection, via private equity, venture capital, or other corporate means, had any place in electronic music. This is a debate that was reignited when KKR/Superstruct, who have other investments in Israeli defence companies, acquired Boiler Room.

On the corporate side, we have Rishi Patel, co-founder of Plus Eight Equity Partners, a VC firm launched in 2014, and counts Richie Hawtin and Pete Tong amongst their team. 

We also have Andrea Rosen, Portfolio Manager at Best Nights VC, an investment vehicle funded by Jägermeister, who invests in the future of nightlife.

Finally, we have Helen Sartory, Chief Revenue Officer at Beatport, a previous investment banker who has pivoted into the electronic music industry.

On the culture side, we have Shawn Reynaldo, an electronic music journalist and the founder of the First Floor newsletter. Shawn is a champion for independent music culture.

Rufy Ghazi, music tech and research executive, had the pleasure (and challenge) of moderating. 

Whether you are on the side of capital or culture, neither argument is a stupid one.

The Loft needed Mancuso to fund the sound system. The Haçienda was bankrolled by Factory Records and New Order royalties. Paradise Garage existed because Michael Brody put money into the building. 

Capital isn’t evil, and I’m sure it’s something that most underground crews wish they had a bit more of. But without VC funding, there’s no Beatport, SoundCloud, or Pirate Studios. 

Boiler Room took VC investment, a total of $12.6M over six rounds between 2010 and 2016, a time when many of us probably discovered the platform due to their expansion.

But when Boiler Room was acquired by KKR/Superstruct in 2025, and the boycott started, they put out a statement:

“...owned by KKR, which has investments that categorically do not align with our values. No Boiler Room staff at any level held any ownership or voting rights in the company and had no control over the sale. We are also unable to divest because we have no say in our ownership.⁠”

This highlights one of the most important points that Shawn brought up, and some words of advice I got as a young entrepreneur: “Once you get investors, you can never get rid of them, especially VCs”.

Culture is the entire reason that any of this is investible in the first place. 

Detroit techno emerged from the post-industrial collapse of a single American city. Berlin techno was squatters in abandoned East German buildings. 

The Second Summer of Love was warehouse raves and illegal free parties. UK garage was built on top of pirate radio stations broadcasting from tower block rooftops.

If we agree that culture cannot be created from capital, then it raises the question of how capital can best be used in this industry. 

I saw Rishi and Andrea speak at a similar panel at ADE “Investing in Culture Without Killing It”, but with four pro-capital people on the panel, it was basically just a sales pitch. 

But with three corporate titans versus a dedicated music journalist, this was always going to be interesting. 

Andreea Rosen’s pro-capital arguments at Best Nights VC focused on investing in founders who are reimagining nightlife via technology, intending to bring people together in real life. A noble vision for a generation that is addicted to their phones and lonelier than ever.

In an interview with Global Venturing, Andreea states, “We’re looking at their social impact, not just the financial impact,” says Rosen. “Just in 2023, our 14 portfolio companies across seven countries provided almost 22 million people with a best night.”.

At one point, Shawn had done his homework, and seemingly frustrated at the claims Andreea was making, read out a few of the apps Best Nights had invested in.

Thursday: “A new solution to dating app fatigue”

Flickplay: “A gamified video-sharing social app that combines the map gamification of Pokémon Go, with the social features of TikTok.

Snow League: “Founded by Shaun White with the vision of creating the world’s first competitive winter sports league”

In Best Nights' defence, they do have apps more focused on electronic music, such as ticketing and festivals apps. In my humble opinion, having worked in the technology industry for 14 years, they are apps that provide nothing new, and I find it hard to see any of these apps producing social impact, let alone a financial impact. 

Rishi, who was the most vocal pro-capital panellist, had a similar argument. His company, Plus Eight Equity Partners, counts DJs and industry people amongst their investors and advisors.

Plus Eight counts some genuine electronic music investments in its portfolio, such as Landr, a music production suite, and Splice, a royalty-free sample library. 

There’s also Endel, which offers personalised soundscapes to help you sleep, ESL FaceIt Group, a gamified competition platform, and MerchBar, where you can buy music merchandise. 

I am not completely anti-capital, but after watching Shawn hotly contest most points that the other panellists brought up, I didn’t hear any progressive arguments from the capital side.

At one point, when Shawn monologued on the overarching arguments of the culture side, bringing up examples such as EXIT Festival and Boiler Room, Rishi responded to get a quick laugh, “tell us how you really feel”. 

Rishi, in an attempt to build bridges between the two sides, argued that he personally supported independent venues over larger corporate-owned ones, and that it was up to the consumer to do the same, and find out the ownership.

Shawn snapped back at the convenience of that answer. Putting the responsibility firmly on the consumer, rather than the investor. 

In an industry that is being torn apart by rising costs, headliner culture, corporate monopolisation, and a prioritisation of capital over culture, it’s a shame that this topic wasn’t talked about more at a conference where the theme was “Reclaim the dancefloor”. 

You can argue that capital is good; you can claim that this creates innovation, creates economic value, and drives industries forward.

But you cannot argue that capital creates culture, and when so many of the original clubbing values are eroding, we need to have a different kind of conversation.

Best Nights VC is the dedicated venture capital unit of Jägermeister, a company that did €882M in 2025. What is the real reason they have this VC arm? Innovation? Money? Community support?

Possibly. Or it could be about branding, data collection and ensuring that Jägermeister is still top of mind for younger generations who are drinking less.

At one point, when Helen was asked to respond to one of Shawn’s points, she explained that Beatport was bought out of bankruptcy in December 2016, which required capital. Maybe we wouldn’t have Beatport today if this hadn’t happened? 

Helen's defence of Beatport's bankruptcy capital wasn't wrong, but the longer history of that company tells you exactly why Shawn was sceptical.

But I’m afraid it’s the same old story.

In 2007, Beatport took a $12M investment from a tech investment fund. In 2013, they were sold to SFX Entertainment for $50M. The original SFX was sold to Clear Channel in 2000 and became the basis of what's now Live Nation.

Over the next 3 years, SFX accrued a reported $300M in debt, and Beatport got dragged along for the ride, eventually going into bankruptcy. SFX then emerged from the bankruptcy as a private company called LiveStyle, with Axar Capital Management as its backer.  

John Acquaviva, an early Beatport investor and board member alongside Richie Hawtin, took his proceeds from the 2013 SFX sale and in 2014 co-founded Plus Eight Equity Partners with Hawtin and Rishi Patel.

That's the cycle. Investor in, founders out, sale, debt, collapse, restructure, new investors. The capital changes hands; the culture absorbs the cost

Towards the end of the panel, in an attempt to calm things down, Helen and Rufi urged Shawn to focus on solutions, not problems. 

Shawn gave examples of non-profit organizations that were a clear alternative to external investments. 

But in a world of rising costs, government legislation, and monopolisation, rife with companies quick to jump on the Live Nation, vertical integration model (tickets, promotions, merch, security, etc), what other options are there beyond non-profits?

Fundamentally, whoever you get your external capital injection from - unless we are talking grants or non-profits - is going to want to see a return on their investment, a few times over. 

So whether you receive investment, or have DJs on your advisory board or do it because you love electronic music, you will have a responsibility to make a return on your capital, and that comes before culture.