Danger-taker, centered, visionary – these adjectives are sometimes used to explain pushed entrepreneurs. Scott Lynn, founder and CEO of fractional artwork investing startup Masterworks, simply suits the invoice.
Launched in 2017, the Masterworks artwork funding platform democratizes the high-end artwork market, permitting common buyers such as you and me to buy shares of museum-worthy work for as little as $20. The platform makes use of a proprietary artwork transaction database and machine studying instruments to determine high-yield artwork investments and exit alternatives.
However how did a new-age startup succeed at breaking via the excessive partitions of the blue-chip artwork market? Scott Lynn’s unconventional pondering deserves credit score for taking Masterworks from an idea to a thriving group of 880,000 members.
Whether or not you aspire to construct the following e-commerce big or go-to enterprise app, Lynn’s endeavors as an entrepreneur pack a number of classes for you. Let’s take a more in-depth look.
Scott Lynn’s Entrepreneurial Journey
Masterworks could be Lynn’s most up-to-date and best-known enterprise. However he has saved the spirit of entrepreneurship alive for greater than 25 years.
Lynn’s early successes embody Treeloot, a well-liked on-line recreation that ranked among the many high 20 websites on the web till 2001, and AdKnowledge, an adtech agency that helped internet publishers to monetize their audiences with dynamic banner placements.
Then got here Payability in 2014. The digital lending platform has offered greater than $6 billion in capital to e-commerce companies.
Apart from being a passionate entrepreneur, Lynn has actively invested in modern artwork since he was a teen. In a span of 15 years, he has constructed an internationally acknowledged assortment that includes items by Clyfford Nonetheless, Mark Rothko, and Willem de Kooning.
Lynn’s curiosity in positive artwork led him to understand its funding potential. As an asset class, blue-chip artwork – museum-caliber items by world-renowned artists price thousands and thousands of {dollars} – has persistently outperformed conventional asset lessons like S&P 500 investments. It reveals low correlations to different asset lessons during times of financial decline and gives higher risk-adjusted returns.
Alongside this realization, Lynn additionally understood that the frequent public didn’t have entry to the unique world of auctions and personal gross sales. This sowed the seeds for an answer that might stage the taking part in subject in blue-chip artwork investing, and the result was Masterworks.
In only a few years, Masterworks has acquired 392 work with a cumulative worth of greater than $912 million. The platform holds every portray for as much as ten years, ultimately promoting it and distributing the income to shareholders.
In 2022, Masterworks paid out returns price $25 million to customers. The corporate even raised $110 million in a Sequence A funding spherical in 2021 led by Left Lane Capital at a valuation of greater than $1 billion.
Key Classes for Entrepreneurs
Within the course of of constructing positive artwork investible via Masterworks, Lynn has grow to be a job mannequin for brand new entrepreneurs. Listed here are essentially the most very important takeaways from his strategy..
Don’t Be Afraid to Shake Issues Up
Lynn isn’t afraid to problem the established order, and that’s evident from his willingness to disrupt a intently guarded market like blue-chip artwork.
Historically, positive artwork investments have been accessible solely to ultra-rich people with troves of dispensable money. Excessive value level apart, the market additionally lacks transparency and may be intimidating to newcomers.
Lynn understood the challenges strange buyers face when navigating the world of positive artwork and launched the fractional artwork investing mannequin. Every time the Masterworks group purchases a portray, they securitize it with the SEC. That, in flip, permits the general public to purchase fractional shares of multi-million-dollar work at a beginning value of $20
Furthermore, he acknowledged that making artwork investments reasonably priced wasn’t sufficient. Customers wanted perception into market dynamics to have the ability to make investments with confidence. It led Lynn and his group to construct a one-of-its-kind database of public sale gross sales courting again to the Nineteen Fifties.
With all this info at their fingertips, customers can determine work price their cash. Plus, it helps the corporate’s acquisition group choose items with most momentum for investing.
This presents a vital lesson for any entrepreneur trying to break right into a change-resistant market dominated by established gamers. As a substitute of letting the challenges dissuade you, discover methods to make your choices stand out and breathe new life into a standard market.
Embrace a Arms On Method
As you tread the waters of entrepreneurship, it’s straightforward to get caught up in high-level selections and lose contact along with your firm’s day-to-day operations.
However Lynn isn’t like most entrepreneurs. As a substitute of taking a step again, he actively participates in on a regular basis duties at Masterworks. Whether or not it’s manually coming into knowledge from paper-based public sale catalogs to computer systems, monitoring demand and provide developments, or utilizing predictive analytics to determine exit alternatives, Lynn is all the time desirous to get in on the motion.
The hands-on strategy has helped Masterworks construct a horizontal organizational hierarchy the place staff are all the time pushed and motivated. Once they see the founder and different C-suite executives prepared to get their fingers soiled, it encourages them to present their finest shot.
For an aspiring enterprise chief, it is likely one of the most important learnings.
