PlusMusic

PlusMusic

Early Stage

Making Music Interactive with AI

Making Music Interactive with AI

Overview

Raised to Date: Raised: $11,115

Total Commitments ($USD)

Platform

StartEngine

Start Date

03/27/2024

Close Date

06/25/2024

Min. Goal
$15,000
Max. Goal
$1,235,000
Min. Investment

$500

Security Type

Convertible Note

Series

Series A

SEC Filing Type

RegCF    Open SEC Filing

Valuation Cap

$15,000,000

Discount

15%

Rolling Commitments ($USD)

Status

Active

Reporting Date

04/21/2024

Days Remaining

63

% of Min. Goal

74%

% of Max. Goal

1%

Likelihood of Max
unlikely
Avg. Daily Raise

$445

# of Investors

8

Momentum
cold.svg
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Year Founded

2016

Industry

Media, Entertainment & Publishing

Tech Sector

MediaTech

Distribution Model

B2B/B2C

Margin

Medium

Capital Intensity

Low

Location

San Diego, California

Business Type

Growth

PlusMusic, with a valuation of $15 million, is raising funds on StartEngine. The company has developed a platform to make music interactive with artificial intelligence. PlusMusic works on adaptive AI that turns its extensive music library from emerging labels into interactive music for gamers. The platform adapts songs with live gameplay and has secured a partnership with gaming company Overwolf. Nick Venti and Brian Karscig founded PlusMusic in June 2016. The current crowdfunding campaign has a minimum target of $15,000 and a maximum target of $1.24 million. The campaign proceeds will be used for marketing, product, music content, and company employment.

Summary Profit and Loss Statement

FY 2023 FY 2022

Revenue

$24

$2,296

COGS

$1,424,495

$1,430,140

Tax

$838

$1,927

 

 

Net Income

$-1,411,923

$-1,429,771

Summary Balance Sheet

FY 2023 FY 2022

Cash

$1,981

$868,277

Accounts Receivable

$0

$0

Total Assets

$33,828

$895,786

Short-Term Debt

$30,384

$33,987

Long-Term Debt

$18,820

$0

Total Liabilities

$49,204

$33,987

Financials as of: 03/27/2024
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Analyst Report

Synopsis

PlusMusic, operating under Look Sharp Labs, Inc., is venturing into the music streaming field with an innovative twist aimed at the gaming industry. Recognizing the vast potential in the intersection of music and gaming, PlusMusic has developed a platform that utilizes artificial intelligence to transform music into an interactive gaming experience. This platform, powered by adaptive AI, dynamically adjusts songs from its extensive library of emerging artists and labels to sync with live gameplay. Such a feature enhances the gaming experience and provides a unique avenue for artists to showcase their music within the gaming world. At this time, PlusMusic is pre-revenue and has yet to launch. According to the site, an invite-only launch will begin in the near future.

Next Section: Price

Price

PlusMusic is in the early stages of development, focusing on a niche intersection between music streaming and the gaming industry. For its current crowdfunding campaign on StartEngine, offering securities through a convertible note, the company has set its valuation cap at $15 million, which is ambitious for a pre-revenue company. 

The valuation, however, also considers PlusMusic's intellectual property, including eight patents, and its strategic partnership with Overwolf, a notable player in the gaming industry. These assets are critical for a company like PlusMusic, which aims to differentiate itself through technology and market access. The company has successfully raised $3 million in funding, demonstrating investor confidence in its vision and execution capabilities thus far.

Regardless, investors should note the high risk associated with investing in a pre-revenue company with a high valuation. The convertible note structure offers protection, with a 5.00% interest rate and a 15.00% discount on future equity pricing. Still, the principal risk remains the company's ability to execute its business plan and achieve significant market penetration.

For PlusMusic to provide a 10X return to investors, several milestones must be achieved. These include successfully launching its platform, scaling its user base significantly, and securing additional partnerships within the gaming and music industries. The company's future success will heavily depend on its ability to innovate and adapt to the rapidly changing landscapes of both the gaming and music streaming markets.

Next Section: Market

Market

PlusMusic is entering the US music streaming market, a sector anticipated to reach $12.11 billion in 2024. This market is part of the broader digital music industry, which has seen consistent growth due to factors like the growing consumer base for digital entertainment and the shift towards digital distribution platforms. PlusMusic's approach, leveraging artificial intelligence to create interactive music experiences specifically for gamers, positions it at the intersection of two significant trends: the increasing demand for personalized entertainment and the burgeoning global gaming audience.

Moreover, the gaming industry's growth drivers align well with PlusMusic's offering. The expanding global gaming audience, driven by increased accessibility through various platforms and the shift towards digital distribution, creates a larger potential customer base for PlusMusic. Additionally, the gaming industry's embrace of various monetization models presents potential revenue streams for PlusMusic, especially if it can integrate its services with games to enhance the player experience and encourage in-game purchases or subscriptions.

Overall, while PlusMusic is venturing into a market with significant competition and high regulatory hurdles around music licensing, its unique value proposition of combining music streaming with interactive gaming experiences through AI offers a novel approach. The success of this venture will likely depend on its ability to secure more partnerships like the one with Overwolf, effectively market its unique offering to the gaming community, and navigate the complexities of music licensing and rights management.

Next Section: Team

Team

PlusMusic, under the leadership of co-founders Nick Venti and Brian Karscig, is positioned at the intersection of music and gaming, leveraging artificial intelligence to revolutionize how music is experienced within the gaming industry. Venti, serving as CEO, brings a robust 18.5 years of relevant industry experience to the table as both a musician and studio owner. His background suggests a depth of knowledge in the music industry that could be pivotal for PlusMusic's strategic direction and growth. Venti's leadership is complemented by Karscig, the Head of Music, who contributes 19 years of experience as a musician with notable bands such as The Killers. Karscig's connections will help curate PlusMusic's extensive library from emerging labels.

The team's size is currently small, with only two members listed, which could be a limitation as the company seeks to scale, especially given the ambitious goal of transforming music streaming services for the gaming market. Advisors' involvement could potentially fill gaps in expertise and provide strategic guidance as PlusMusic navigates its early-stage development and seeks to establish partnerships, like the one already secured with gaming company Overwolf.

Overall, the leadership of PlusMusic, with Venti at the helm and Karscig leading the music aspect, presents a blend of experience that could drive the company's innovative platform forward. However, the success of PlusMusic will likely depend on the ability of this small team to execute its vision effectively, leverage its industry experience, and expand its team strategically to meet the demands of its ambitious project. To meet these demands, more business-minded and technical hires are a must. For such a technical product, it should raise concern that there appear to be no full-time technical employees. 

Next Section: Differentiation

Differentiation

PlusMusic distinguishes itself in the crowded music streaming service market by targeting a niche yet expansive audience: gamers. Its innovative approach integrates artificial intelligence to create adaptive music experiences tailored to live gameplay, offering an interactive dimension that traditional streaming services like YouTube, Spotify, and Apple Music do not. These platforms provide vast libraries of music but cannot adapt music to the dynamic environment of video games.

Competing directly within the gaming music niche, PlusMusic's closest competitor appears to be Rainwave, a video game radio. However, PlusMusic's use of adaptive AI to customize music in real-time based on gameplay sets it apart, offering a more immersive and personalized gaming experience. Its partnership with Overwolf, a notable platform that enhances the gaming experience with in-game apps and features further enhances this unique selling proposition. This collaboration validates PlusMusic's value proposition and provides a direct channel to engage with a large and dedicated gaming audience.

Securing eight patents underscores PlusMusic's commitment to innovation and protecting its technology, which could serve as a significant barrier to entry for potential competitors. This intellectual property, coupled with $3 million in funding, positions PlusMusic to potentially lead in the emerging market of interactive music for gamers. While the platform is still in the pre-revenue stage and yet to be tested in the market, its strategic focus on a specific target audience and its technological advancements suggest a strong differentiation strategy that could disrupt the traditional music streaming industry.

Next Section: Performance

Performance

PlusMusic has yet to launch a viable product, though it has secured $3.08 million in funding, underscoring investor confidence in its vision and technology. This capital has been instrumental in developing PlusMusic's platform, which leverages adaptive artificial intelligence to transform music from emerging labels into interactive experiences tailored for the gaming community.

PlusMusic's pivotal achievement is its partnership with Overwolf, a notable software company in the gaming industry. This collaboration validates PlusMusic's technology and market approach and provides a strategic avenue for reaching its target audience. The partnership signifies a critical step towards market penetration and user acquisition.

Despite not having any revenue or users, PlusMusic's development has been marked by securing eight patents. These patents testify to the company's commitment to innovation and its efforts to safeguard its unique value proposition. The intellectual property portfolio not only strengthens PlusMusic's market position but also presents a barrier to entry for potential competitors.

However, PlusMusic faces the challenge of transitioning from a pre-revenue stage to generating sustainable income. With a monthly burn rate of approximately $117,660, efficient capital allocation and a clear path to monetization become crucial for maintaining momentum and achieving long-term viability. The company's strategic focus on B2B and B2C distribution models, underpinned by a recurring revenue model, suggests a comprehensive approach to market engagement and revenue generation.

In summary, PlusMusic's innovative platform, strategic partnership with Overwolf, and secured patents position the company as a promising player in the intersection of music streaming and gaming. As PlusMusic progresses toward market launch and seeks to capitalize on its early achievements, its ability to effectively manage its burn rate and successfully execute its go-to-market strategy will be key to its future success.

Next Section: Risk

Risk

PlusMusic operates in a highly competitive music streaming industry, with major players like YouTube, Spotify, and Apple Music dominating the sector. Although its unique selling proposition lies in integrating music with gaming through adaptive AI, without a live product, there is no proof of market fit.

Being in the pre-revenue stage with an ambitious venture to combine music streaming with artificial intelligence for the gaming industry introduces significant risks. The platform's success hinges on its technological capabilities, particularly the adaptability of its AI, to create a seamless experience for gamers. Since the product is still in the MVP/PoC (Minimum Viable Product/Proof of Concept) phase, there's uncertainty regarding its performance under real-world conditions and its ability to meet user expectations.

PlusMusic's partnership with Overwolf could be pivotal for its go-to-market strategy and initial user acquisition. However, relying on partnerships for market entry and growth introduces dependency risks, as the company's trajectory could be significantly impacted by its partners' strategies, market position, and performance.

Financially, PlusMusic has a high monthly burn rate compared to its minimal cash reserves, indicating a potential need for continuous fundraising to sustain operations until it can generate significant revenue. Furthermore, given its current pre-revenue status, the company's valuation appears high, which could deter potential investors seeking a balanced risk-reward profile. 

While PlusMusic presents an innovative approach to merging music with gaming, potential investors should carefully consider the competitive landscape, the platform's technological execution, partnership dependencies, and the company's financial health before making an investment decision.

Next Section: Bullish Outlook

Bullish Outlook

PlusMusic's innovative approach to integrating artificial intelligence with music streaming presents a compelling case for its potential success in the burgeoning gaming industry. By developing a platform that adapts music to live gameplay, PlusMusic is positioned at the confluence of multiple rapidly growing markets: music streaming, gaming, and artificial intelligence. This unique offering differentiates PlusMusic from traditional music streaming services and addresses a specific need within the gaming community for more immersive and interactive experiences.

The strategic partnership with Overwolf, a recognized entity in the gaming industry, further bolsters PlusMusic's market position. This collaboration validates PlusMusic's value proposition and provides a direct channel to engage with a dedicated and expansive user base. Taping into Overwolf's network from the outset can accelerate user adoption and product visibility, laying a solid foundation for growth.

Despite being in the pre-revenue stage, PlusMusic's approach to securing content from emerging labels suggests a forward-thinking strategy that benefits all stakeholders. PlusMusic offers a novel channel for emerging artists and labels to reach new audiences, potentially disrupting the traditional music discovery process. For gamers, this means access to a diverse and dynamic music library tailored to enhance their gaming experience.

Backed by venture capital, including investments from Play Ventures, PlusMusic has secured the financial support necessary to navigate its early development phase and move towards market introduction. This backing provides the capital needed for growth and signals confidence in PlusMusic's team and technology to prospective partners and users.

In conclusion, PlusMusic's patented technology, strategic industry partnership, and unique market positioning present a compelling opportunity. While there are inherent risks in any early-stage venture, PlusMusic's innovative approach to merging AI with music for an interactive gaming experience positions it as a potential disruptor in the music streaming and gaming industries.

Next Section: Bearish Outlook

Bearish Outlook

PlusMusic's ambitious goal to revolutionize the music streaming service for gamers through its AI-driven platform faces significant challenges that could deter potential investors. The pre-revenue status of the company, coupled with a monthly burn rate of $117,660, a meager cash reserve of $1,981, and over $1.4 million in COGS, raises serious concerns about its financial sustainability and runway. This situation is further compounded by a valuation of $15 million, which appears highly optimistic for a company that has yet to generate significant revenue or prove its business model.

Despite securing a partnership with gaming company Overwolf, PlusMusic is entering an industry dominated by giants such as YouTube, Spotify, and Apple Music. These platforms have deep pockets and could easily adapt their services to cater to the gaming community if they see a lucrative opportunity. 

While the company has secured patents for its technology, which could offer some competitive advantage, the path to monetization and capturing a significant market share in the fiercely competitive media, entertainment, and publishing industry seems fraught with challenges.

Finally, the team poses some risk, considering neither founder has the technical background for a highly technical product. 

Next Section: Executive Summary

Executive Summary

PlusMusic, a pioneering platform in the music streaming market, is setting out to revolutionize how music is experienced within the gaming world. Founded by Nick Venti and Brian Karscig, PlusMusic leverages adaptive AI technology to transform its extensive music library from emerging labels into interactive music for gamers. This innovative approach allows the platform's songs to adapt dynamically with live gameplay, creating a unique and immersive gaming experience.

The company's strategic partnership with Overwolf, a notable gaming company, underscores its commitment to seamlessly integrating music and gaming. PlusMusic's development is further evidenced by its acquisition of eight patents, which demonstrate its dedication to innovation and secure its intellectual property. Despite being in the pre-revenue stage, PlusMusic has successfully raised $3 million in funding, highlighting investor confidence in its vision and potential.

PlusMusic operates in a competitive landscape that includes traditional music streaming services like YouTube, Spotify, and Apple Music, as well as niche players like Rainwave. However, PlusMusic's focus on creating interactive music experiences tailored to the gaming community sets it apart from these competitors. 

However, PlusMusic faces challenges typical of early-stage ventures, including generating revenue and achieving profitability. With a monthly burn rate of $117,660 and a net income loss of $1,411,923 in the most recent fiscal year, the company must carefully manage its resources while executing its growth strategy. Additionally, the valuation of $15 million for a pre-revenue company may raise concerns about overvaluation among potential investors.

Through its AI-driven platform, PlusMusic integrates music and gaming in a Novel way. The company's innovative approach, strategic partnerships, and focus on intellectual property protection position it well for future growth. However, investors should consider the risks associated with PlusMusic's pre-revenue status and lack of proof of concept.

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PlusMusic on StartEngine 2024
Platform: StartEngine
Security Type: Convertible Note
Valuation: $15,000,000

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