Arthena: Crowd Funding in the art world
From new companies to funding personal missions Crowdfunding has come of age. You can even contribute £10 towards the Greek Bailout fund online, with varying levels of contribution offering a variety of personal rewards from a Greek food basket to a postcard of the Greek prime minister.
Arthena a new online platform, is offering its investors the chance to buy high end art.
Founded in 2013 by Madelaine D’Angelo, Arthena allows its clients to co-invest in themed collections of art for financial incentives.
A certified appraiser, D’Angelo came from a background working in academic institutions. She started Arthena, after seeing more and more people investing in art for financial purposes. In 2012 the JOBS act legislation came was enacted in the US, allowing the equity crow-funding that let D’Angelo to create Arthena.
Arthena offers both collection management and investment services. They connect specialist art advisors or leading experts in the art market who want to put together a collection, with clients who want to invest in art. “Our aim is to harness buyer power and bring it online, streamlined into one place” says D’Angelo.
The company has 58 advisors signed up but has already spoken to more than 100 specialists. D’Angelo says it has reached a point where they had to stop reaching out because they were being approached by too many industry experts wanting to start their own funded collection. She says: “We want to empower our advisors to do what they do best, to go out and buy really good art.”
The process is simple. An accredited investor signs up to Arthena on their website and can view all the open collections. Each collection is focussed on a specific market run by an expert in that field, for example, Arthena have been approached about the prospect of running a potential Chinese Ceramics collection in the near future by a specialist in Chinese Ceramics. The specialist outlines what type of art will be bought for the collection and why, educating the user about how and why this will be a good investment. Once an investor has entered in to a collection, they are kept up-to date on specific market news for that collection as well as any relevant exhibitions or trends for particular artists.
Each collection has a five year maturity, after which any profit is then split between the investors and the advisor. The progress of each collection will be tracked against the market and logged on the Arthena website, making the whole process very transparent.
All investors are also offered the benefit of additional educational content.
One of the main differences between Arthena and a regular art fund, is its emphasis on education. D’Angelo is a strong believer in educating the people wanting to invest in art. She recalls a time when a friend bought a Damien Hirst print expecting it to increase in value over the following years, unfortunately she had to be the one to tell him that prints of Hirst’s work don’t increase in the same way as his other work. “We want to focus not only on how to invest but also on how to collect.” Says D’Angelo.
“We want to promote how the economics of the market work, giving our investors an understanding of what they are buying and why.” She added. All of the advisors or experts under contract with Arthena are required to supply four hours’ worth of educational content per month. The content can come in the form of guided gallery tours, lectures or online educational content. Arthena also sends out a regular newsletter with tips and advice for those branching out into the art world, as well as running a blog.
As an individual D’Angelo is very keen on all areas of “art tech”, she feels this is important given the direction the art market is headed. D’Angelo says “Growth in the online market has exploded, because people can do it on their own terms.” She added: “There is a lot of demand for our services because it can be quite difficult to invest in art, lots of people are too scared to dive in.”
When D’Angelo wrote the business model, she designed it for tangible assets, which will allow Arthena growth to include other luxury products in the future. At the moment, the collections are made up of flat art, because it is easier to store. Generally the collections are comprised of modern art and post war, contemporary and emerging artists.
Some of the works in the collection are kept in storage, but all works are available for gallery or museum loan. The plans for Arthena’s future include the addition of a gallery attached to their office space in New York, which would display some of the art within the collections. Eventually the plans include the ability to loan out the art to the investors.
D’Angelo says the reason people would choose Arthena over an art fund, comes down to diversity. Arthena allows accredited investors to invest at a lower amount than most funds usually require and also allows them to invest across several collections.