A gated bet: about $0.45M at the first gate, up to $1.1M in total.
House Track is a build-to-sell or build-to-harvest SaaS plan. Capital is released in three tranches, each behind a gate with kill criteria. Every figure below is a projection from the plan's model.
Projection, not results. No customers, revenue, partners, pilots or letters of intent exist. Returns depend on untested assumptions about willingness to pay, franchisee adoption, churn and an engine that must pass a day-0 rights gate.
Returns scenarios
Cumulative cash vs. committed capital Projection
Exit value range Projection
Year-5 trailing recurring revenue × 3.0 / 3.25 / 3.5
IRR convention: annual free cash flows, year-1 flow at t=0, exit at end of year 5 at 3.25x; after-tax figures haircut positive flows and the exit 20% for tax and deal fees. Get tax advice.
Use of funds, tranche 1
Year-1 base case. Net need about $444k after year-1 revenue.
Tranches and gates
Probability-weighted view
The plan's probabilities are judgment, not data. Move them to your own and the expected value recomputes. Values are founder net after tax and fees, before a charge for founder time.
| Outcome | Prob. | Net value | Weighted |
|---|
Why it could work
Brand liability for social music is documented; one HQ signature covers a whole franchise system; contribution margins of 69–84% per unit; a lean team of 6 W-2 by year 5; natural acquirers in a consolidating category.
What could break it
Engine provenance; IP-defense insurance pricing (2x adds ~$250k peak need); 6–18 month HQ sales cycles; optional franchisee adoption; price competition from Rightsify and CloudCover; a funded thesis competitor (Tonada).
How the gates protect capital
Day-0 engine and day-30 insurance gates before build spend; a $2k blind test by day 14; day-90 and month-9 kill criteria. Half the plan's probability mass ends at a gate for about $0.42M.
Talk to us about House Track.
Questions on the model, the gates, or a strategic role in tranche 2 or 3.