December 7, 2023

Dear friends!

Thank you all for your support, advice, and finances. I apologize for the long silence: I was building the foundation of my personal life, which is important for my startup marathon. I will be as transparent as possible: it's easier for both me and you. So feel free to ask me uncomfortable questions, to which I will provide honest and detailed answers.

Let's start with the main point:

We are running out of money, and I'm asking for your support with a bridge round, which will be used to further develop the product for businesses and AI features for B2C.

The current P&L looks like this: revenue (after platform fees) - $3,239 (10% from B2B). Expenses: $1,000 marketing manager (full time) + $500 product + $5k outsourcing development (CTO + his team). I reduced marketing expenses to $3k in November, and it will be $2k in December. So our net burn rate is:

• total monthly expenses: $6,500 (team) + $2,000 (user acquisition) + $1,000 (other) = $9,500k
• total monthly revenue (net): $3,200
• monthly burn rate: ~$7k

A realistic plan and budget for the next six months:

• Complete the B2B product and AI: $5k/month = $30k/6 months
• Increase B2B sales to account for 50% of total revenue: $1,000/month = $6k/6 months
• Shoot 500 new drills ($7k)

So, with a $50k bridge round for six months, we should have enough to reach a $0 burn rate, achieve at least $10k in revenue, and start raising a seed round (or continue growing revenue/audience).

I'm not paying myself anything. All the money is going into product development.

I invested my last funds from selling property into building a house in Hawaii, which we will rent out. The passive income from this will provide me the opportunity to create from a state of stability and confidence, knowing that I have a place to live and something to rely on. I also help my fiancée develop her e-commerce project: a strong brand with a large organic reach, but weak processes and marketing.

Important points:

1. Mission: I believe that Level Up can make a big impact in the development of character, teamwork, and discipline for Gen Z/Ⲁ teenagers - the future generation of people who will solve humanity's problems. The root problem we are solving is bringing back children's interest in sports. Social addiction is killing children's dopamine system. It seems that even mobile games are not as harmful as addiction to short videos. A major breakthrough will come with the popularization of AR, which will play a huge role in our development in 2024-2026.
2. Commitment: I have no intention of giving up on this project. Even in the most difficult moments of doubt, I have come to the conclusion that my product is needed in the world. Besides, we have a lot of organic reach, revenue, $20k on AWS, and my passion and energy that drive us. I know how to get things done.
3. Default alive: We can survive without this bridge round, but we will progress very slowly and I will exchange team time for equity. I have a large network, and I want to build not just "build on public," but "build by public." Thanks to GPT, any student intern can become a mid-level professional and work for free in the project for experience. I really like this idea, and it is aligned with my cultural code and desire to be transparent.