The Pitch: We're New York schoolteachers. In 2001, we came across a hip-hop CD that taught multiplication to kids. But the hip-hop wasn't authentic, and the kids couldn't relate to it. We thought we could do better. So we recorded a CD at home with Shawn, a.k.a. Ah-Choo, as the performer. In the past five years we've sold 16,000 copies, through our website and at school, for $13.99 each. We've recorded a few more albums, we're working on a children's book, and we'd like to make animated videos. Eventually, we'd like to license our brand for clothing and toys. We hope we can jump-start revenue this year by getting a distribution deal with Target (NYSE:TGT), Kmart, or QVC.
Owners: Shawn C. Chandler, a.k.a. Ah-Choo, 36, and Ronald C. Speed-Bey Jr., 35
Location: New York City
Employees: One unpaid temp
2006 Revenue: $5,000
2007 Projected Revenue: $300,000 if they sign a distribution deal. For the first half of 2007, revenue was $6,000.
Amount Needed: $250,000 for branding and marketing, animation, DVD and CD production
Clients: Kids and parents who like hip-hop
Recent Buzz: The View, Parents' Choice Foundation award, the website for Cookie magazine, the Syracuse Post-Standard, and two YouTube videos
The Investors React
It's easy to make and sell a CD, but it's difficult to launch a brand. Sing-2-School understands the audience and the content but has no experience with distribution, advertising, or brand management. These guys also have serious competition--if Nickelodeon's Nick Jr. decided to do hip-hop, they could blast it on television in no time. The $250,000 won't take Sing-2-School to scale. My advice would be to focus on making a truly great CD and DVD. Then partner with a company that will distribute the product. They might have to give up licensing rights, but that way they can focus on what they're good at.
Patient Capital Collaborative
Figure out distribution
They can succeed if they really have something that resonates with kids. As parents, we're all looking for things that will get kids enthusiastic about learning. But they should figure out their distribution channels before trying to raise money. Approaching Target and Kmart is fine, but going independently like that seems like a long shot. Instead, I would tell them to find out who's representing other kids' artists like Raffi, get a record label involved, and have it do the distribution. Or figure out who distributes educational products; maybe Scholastic would be interested. For now, they could use a chief operating officer who can help them run the business.
New York Angels
New York City
Not enough money
I don't see educational hip-hop as a mass market opportunity. Some parents would buy the CDs and DVDs because they like hip-hop, but many will still prefer Sesame Street. Ah-Choo's success will depend on whether parents view him as one option among 20 or if he takes off like Steve Burns from Blue's Clues. Also, I think they're underbudgeting--they could spend $250,000 just making a couple of videos. After that, they'd need another $500,000 for PR and marketing in the next 12 months. The best way for them to raise money would be to approach wealthy philanthropists who sit on the advisory boards of New York City private schools.