VentureBeat

Musicians, not just record labels, are facing major issues: Small-time acts may find audiences through MySpace and other music sites, but they still need to make money to survive — and it’s not clear how to make money unless you’re a top star with the ability to draw in large concert crowds (and sell lots of t-shirts).

To try to help out as-yet-unknown stars, a few sites are creating ways for users to fund the work of their favorite acts. A notable one is Amsterdam-based Sellaband, which lets its users buy a “part” of a musical work for at least $10 — once a musician’s total funding reaches $50,000, the company hooks them up with a record studio and producers (see screenshot of sample band So What’s profile on the site).

The fans’ money is used to fund production. The fan gets a free CD when the goal is reached, or gets their money back. Meanwhile, musicians get a third of all advertising revenue from their profile, 60 percent of proceeds from any album sales, and full rights to the album one year after it is released.

So far, the company has had 18 artists pass the $50,000 mark. Its musicians have received close to $2 million in user investments.

Other companies that offer similar services include Amie Street and OurStage.

Sellaband has partnered with Amazon’s music sales site, indie music distribution service The Orchard, and the beer company Heineken, and it has just raised $5 million in a round led by Prime Technology Ventures.

Web and mobile-based messaging service eBuddy, based in Amsterdam, has raised $9.6 million from Dutch venture firm Prime Technology Ventures.

In the past, we’ve compared Meebo and eBuddy as rival companies that are trying to let you IM with anyone else on any IM platform — AOL, Yahoo, etc. This past year, the two companies’ products have diverged, somewhat, as each has focused on different ways of building on its respective user bases.

EBuddy has developed its mobile chat services for its 12 million monthly unique users (the company’s internal numbers) spread around the world — in many countries people use mobile phones in place of computers. The company plans to use the funding to in part continue building out its mobile services.

Meebo, meanwhile, has focused on building widgets for the web, seen by the explosion of the Meebo Rooms chat room widget on other sites — the company now has more than 24 million users, most of whom use Meebo within another site. It has also recently launched a developer platform, although the success of that has yet to be seen.

EBuddy’s latest round was provided by Dutch venture firm Prime Technology Ventures. It previously raised $6.3 million from Dutch firm Lowland Capital Partners in the fall of 2006 (our coverage).

Also, note that eBuddy is one of relatively few startups to receive funding from European VCs — see our previous story on that, here.