Masterworks

Masterworks, established in 2017 by Scott Lynn, along with co-founders Hai Tran, Josh Goldstein, and Alberto Simo, operates an online platform designed to make fine art a tradable asset class. Lynn, a serial entrepreneur and avid art collector, identified that art as an asset class has demonstrated strong risk-adjusted returns but was largely inaccessible to most investors due to high capital requirements. His background includes founding the adtech company Adknowledge and the fintech firm Payability, and he has been an active collector of contemporary art for over fifteen years.

The company's primary business involves acquiring 'blue-chip' contemporary artwork from artists with established reputations, such as Banksy, Basquiat, and Warhol. Masterworks' in-house research team utilizes proprietary data from over 5 million data points to identify artists and specific artworks with strong appreciation potential, purchasing only a small fraction of the art it evaluates. Once an artwork is acquired, Masterworks securitizes it by filing an offering with the U.S. Securities and Exchange Commission (SEC), creating a separate limited liability company (LLC) for each piece. This process allows the company to sell fractional shares of ownership in the artwork to its members. As of early 2025, the platform reported having over 1 million users and has raised significant capital, including a $110 million Series A round in 2021 which valued the company at over $1 billion.

Revenue is generated through a dual-fee structure akin to a hedge fund. The company charges an annual 1.5% management fee, which is taken in the form of equity in the artwork, covering costs such as storage, insurance, and maintenance. Upon the sale of a painting, Masterworks takes a 20% commission on the profit. The firm targets a holding period of three to ten years for each piece, after which it aims to sell the artwork to a collector or at auction, distributing the net proceeds to the shareholders. For investors seeking liquidity before a sale, Masterworks provides a secondary market where members can trade shares with one another. The onboarding process for new investors involves a consultation with a Masterworks adviser to determine suitability, with a stated investment minimum of $15,000 that may be adjusted based on an individual's portfolio.

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