ASX-listed talent quest promoter MSM Corporation is turning to crowd-funding.

MSM (ASX:MSM) — the promoter of online talent quest Megastar — has appointed a US crowdfunding law firm to raise capital and establish an “ecosystem” for performers to monetise their work.

Crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via websites such as Kickstarter.

It’s not clear how much MSM plans to raise through the crowd-funding plan. Details are due on March 15.

MSM has raised about $15 million through more traditional channels since August — and had $1.4 million left at the end of December. MSM reported $5000 in customer receipts in the December half.

MSM believes crowdfunding is a way to leverage its user base — it reported 435,000 installs of its Megastar app at its finale in December.

“The US equity Crowd Funding strategy and creation of a talent discovery, promotion, monetisation and management ecosystem is intended to leverage Megastar Studio’s highly engaged user base generated during World Wide Tournament One to facilitate interactions between fans and performers that are currently unavailable within the entertainment industry,” it said.

MSM hopes to follow in the success of Goodwin Procter’s other clients — Snapchat owner Snap’s $3 billion IPO and a $150 million raising by Aussie software maker Atlassian.

MSM share price movements over the past six months.
MSM share price movements over the past six months.

“Goodwin will be integral in advising us on key components of our strategy to provide performers and fans with a new and unique capability to collaborate to create and benefit from the discovery and promotion of emerging talent,” managing director Dion Sullivan said.

For the December half MSM reported a 191 per cent widening of its loss to $13.7 million — about $9.35 million of which was spent on project and marketing expenses for the first Megastar competition.

But it says it won’t be splashing the same cash for the next round of competitions – with ‘engagement metrics remain strong despite minimal marketing spend’.

MSM had $1.4 million left in the kitty after raising $10.5 million in August and another $3.4 million in November.

The company just raised another $1.72 million in February.

Shares in the company have fallen 80 per cent since highs of 34c in October before its first competition — last trading at 4.3c on January 12. The shares have been suspended since then.

MSM expects to be back trading on the local bourse from March 15.