Of course, Jay could issue more shares at a higher valuation, but any sort of significant dilution of Tidal’s equity would almost instantly leave Jay a minority shareholder in his own company - he could, in theory, be entirely shut out of the company’s decision-making process even as he continued to function as its public face. With Jay owning the remaining 52% of the company, that leaves very little pie to offer potential investors. It can presumably send out its CEO in search of funding, but Tidal has churned through three CEOs since Jay Z took ownership last March, and there’s limited incentive for investors to get on board: Jay allegedly gifted 3% equity to each of Tidal’s original 16 founders, meaning some 48% of the business is owned by the likes of Jason Aldean, Daft Punk, and Deadmau5. Its large ownership “ coalition” is worth a combined $2 billion or so, but those coalition members’ respective commitments and contributions to the cause are unclear and uneven it’s not as though Tidal can rely on its owners’ collective wealth as a steady source of capital. In that respect, Tidal is like no other startup, really.
Tidal, as presented by Jay, was never a project it was, from day one, a fully developed, ostensibly functional, and ethically sourced product - backed, boosted, and co-owned by some of the richest and most recognizable people in the entertainment industry. Maybe such seismic shifts are commonplace among startups, but we never hear those stories, and instead, we focus especially intently on Tidal because Jay Z is such a magnetic, larger-than-life figure, and because he brought his service to market so, um, boldly. Maybe I just see it that way because I’m covering the music-biz beat, and not only is Tidal always in the news, but it seems like every single rumor, report, or update refers to a potentially seismic shift in the company’s operations. Can you even believe that? Not the Apple stuff - we’ll get to that - but the fact that Tidal has been with us for only 18 months? It feels like we’ve been talking about the thing for five years now. On June 30, the Wall Street Journal reported that Apple was in talks to acquire Tidal, the on-demand music-streaming service launched by Jay Z (and co-signed by a country club’s worth of Jay’s highest-charting colleagues) at the end of March 2015.
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