Investment
We are seeking a $3.5M investment that will be repaid through a revenue sharing model with a bonus based on time to repay:
| 2 years | 3 years | 4 years | 5 years | 6 years | 7 years | |
| Repayment | 120% | 130% | 140% | 150% | 160% | 170% |
| IRR | 9.54% | 9.14% | 8.78% | 8.45% | 8.15% | 7.88% |
Once repaid, Guides will continue to pay investors 10% of their initial investment amount every year perpetually, creating an endowment for your fund. This results in a total IRR of over 15.5%.
Use of Funds
The funding will be used to create and grow network effects by rewarding growth initiatives of our users - specifically for creating popular (high-growth) guides, promoting the platform, and referring paid users. We are seeking $3.5M in funding because we anticipate a negative cash-flow of $2.8M as a result of these activities before our revenue becomes greater than our expenses.
Risk Mitigation
The forecasted expenses (our "burn rate") is tied to network growth, not timing: We only spend money when we grow, which in turn, increases our revenue. Therefore we can be extremely capital efficient and only spend money that results in increased sustained revenue.