According to singer, reality show star, serial entrepreneur Ray J he’s investing major money into his latest venture, Tronix Network. However, due to mistakenly using a $3 million loan on other expenses, he found himself needing to enter survival mode in January, he recently revealed.
Ray J launched Tronix Network on March 25 with an initial investment of $1.5 million. Additionally, he secured a $3 million loan, which he mistakenly spent entirely, as he disclosed to Forbes.
Tronix Network, can be likened to the “Netflix of Ratchet Reality TV,” representing an emerging market where the controversial content, often edited out from traditional TV reality shows, finds its place on the internet for social media spectators.
Right now, there are few details on when the network might launch. A website for the new startup is stark, offering no details.
Ray J co-founded an e-scooter and audio equipment company called Raycon. The company gained recognition for its particularly affordable earbuds, such as The Impact earbuds.
Ray J Loan Mishap
In preparation to fully dedicate himself to Tronix Network, Ray J divested his shares in Raycon through a buyout arrangement in mid-March. The specific financial details of the sale remain undisclosed, as Raycon is a privately held company.
When Ray J sat down for Forbes’ “New Money” video series for a business discussion, published on March 22, he revealed that he was on the verge of failing from the start. He admitted to having spent the loaned money and faced the possibility of losing everything.
“Well, my first wave was like a million [point] five [dollars], and then I made some money, and I got it, and I went, ‘you know, if I go all in, then I’ll have everything I need with no money, but everything I need, like I have it,'” Ray J told host Rosemarie Miller. “And also, I’m not gonna even lie, like the loan that I was getting, I thought it was just a total[ly] different kind of loan, and I just misunderstood it, so I ended up spending all of it, thinking that I had some more left, right?”
“And so, I was just a little weird, but I think being humbled like that, and having two months to survive,” he continued. “The times of just life was definitely something I think I needed, you know? So you practice on being frugal and you practice on being realistic with the money.”
“Everything I’m saying to you happened two weeks ago,” the singer added.
Ray J apparently misunderstood the terms of a credit line deal, thinking he would have access to extra funds. This confusion is clear when he mentioned getting a $3 million loan with the same amount used as collateral, showing a lack of clarity on the available funds. He believed that by securing a $3 million loan, he could still keep the amount as backup even after spending it, until the loan’s terms, like interest rates and monthly payments, were met.
Currently facing a financial crunch, the fate of Ray J’s Tronix Network hinges on its ability to compete with Zeus TV or offer web series that rival shows on VH-1, where Ray J has been a star for over a decade.
“At that point, I was just like, ‘OK, I think we have enough POCs [proofs of concept]. I think we know what to do. We just have to now put all of our money up and go for what we believe in.’ So, eventually, that’s what I did, and that’s a pretty scary thing.”
While he possesses the confidence and expertise necessary to star in and produce hit TV shows, his lack of experience in financial security, particularly in dealing with outside investors for significant sums, could potentially lead to his downfall. He openly admits to never having engaged in business with outside investors for substantial amounts of money.
“Technology is a rough space for us to survive the times and get over that hump and sell $3 million earbuds. It’s a great thing, but it’s so dangerous. I’ve never had outside investors in any of our projects,” Ray J said.
The importance of securing outside investors in the tech industry, as exemplified by companies like Zip Recruiter, Nerdwallet, and Wayfair, cannot be overstated. It can be the determining factor in the success or failure of a company.
“I don’t know what it feels like for somebody to say, I like what you’re doing, I’m going to give you $20 million to do what you do. Never had that happen. I don’t know what that feels like.”
“We started doing reality TV when it first started, and everybody had their own way, their own lane. We focused on dating. We focused on ensemble shows. I got a chance to work with WeTV, BET, VH1, MTV, and we just kept flushing out big shows,” Ray J told Miller. “Then we went to the OTT side [Over-the-top media service], and we worked with Zeus Network, and we gave them exactly what they needed to start their engine, and it be successful today, with shows like ‘The Conversation,’ shows like ‘One Mo’ Chance’ and ‘Baddies.’”
Despite mounting tension and facing adversity, Ray J signals that he is receiving predominantly positive feedback regarding the self-funded network.
“It was kind of like a mayhem run,” he said to the outlet. “And you look at the numbers, you look at the subscribers, you go, ‘Wow, we haven’t even shown ’em a show yet.’ So I’ve always knew that this was our space. … We’ll be dropping all the episodes Monday biweekly for each show. And we have seven or eight shows coming. I think they’re gonna be proud, they’re gonna be enthused. And it’s looking exactly how I saw it.”
