Daniel Klaus knows how to read signals

When David Pakman, the former CEO of eMusic who recently became a partner at Venrock, told The Deal he believes the best entrepreneurs are those who know how to read signals accurately and make changes accordingly, the first person we thought of was Daniel Klaus, the co-founder of Original Signal Recordings/Music Nation Inc. and our guest in this episode of The Deal's Behind the Money online video show.Klaus describes how the online video contest company he founded three years ago evolved into an independent record label that distributes Ingrid Michaelson and The Sounds, among others.Echoing Pakman's thoughts, Klaus says the secret was paying attention to which parts of the business were generating revenue and which weren't.The company's backers seem to like the change of plans. Original Signal recently raised a Series B (amount undisclosed) from Greylock Partners and Point Judith Capital, both of which led the company's $5.5 million Series A in January 2007. The label also signed a distribution and promotion agreement with Universal Motown Records, a division of Universal Music Group. (The Deal Pipeline subscribers can learn more here.)The videos with Klaus and Pakman were taped at Silicon Alley Insider's recent Startup 2009 competition. Watch the Klaus video below, or download it on iTunes. And be sure to watch the whole series (links provided below). - Mary Kathleen Flynn

Deal Video | June 12, 2009

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