Verse Capital Ventures, LLC 506(c) Offering Platform

INTRODUCTION TO OUR COMPANY

Verse Capital Ventures, LLC (the “Fund” or the “Company” or “VCV”), a Utah Limited Liability Company, is a Portfolio Operator Venture Fund managed by Verse Capital Partners, a Utah Limited Liability Company (“Verse”, “Verse Capital”, “Management” or “VCP”). The Fund was founded by a management team with specific operating experience and acute expertise in affairs to enhance the Fund’s performance. This team includes experienced serial entrepreneurs, startup operators, education technology (EdTech) and finance executives, a U.S. K-12 education policy and legislation expert, as well as U.S. K-12 sales, marketing and implementation leaders from the largest competitor in the industry. Their experience will de-risk portfolio selection by accelerating the maturity curve of EdTech businesses. This is done by applying the Fund’s proprietary investment thesis to decrease the mortality hazard and increase growth potential of businesses in the Fund portfolio. This drives the overall purpose of producing a greater than market rate of return and positive social impact for investors.

Public K-12 schools in America were designed to prepare young students to effectively integrate into the economy via the workplace or by transitioning into higher education after high school graduation. Over the past 30-years the economy and K-12 education have become out-of-sync with one another. The 1980’s brought the beginning of the Digital Revolution or Third Industrial Revolution and Information Era, marked by technology advancing from analog electronic and mechanical devices to the digital technology used today. By the early 90’s the computer had become a familiar machine in the workplace and by 1996 the internet had become a normal part of business operations for more than half of U.S. businesses. Knowing how to use a computer and the internet by the year 2000 was a necessity for many jobs. The investment required for rapid adoption of technology by businesses was easily justified by cost savings and growth opportunity that came with adoption. School systems, on the other hand, did not have a practical way to finance the adoption and integration of technology into its curriculum or classrooms. Even though the workplace called for employees capable of operating the technology of the Information Era. Currently, every industry that comprises the global economy, with the exception of K-12 education, has been reshaped by the recurring cycles of innovation brought by the Digital Revolution.

Today, powerful, positive forces are gathering with the potential to transform education and EdTech. There is social and economic demand for K-12 education to produce graduates better prepared to compete in a 21st century college and/or career setting. There is also demand for technology to be integrated into schools that align teaching and learning with workforce requirements. The gap between the Digital Revolution and the state of education equates to a once in a generation opportunity for investors and entrepreneurs.

Verse Capital Ventures, LLC 506(c) Offering Platform

SUMMARY OF OPERATIONS

Verse Capital will source companies that are capable of, or already are, leveraging three Critical Success Factors (CSF), one Critical Success Measure (CSM) and in order to leverage management’s research findings and experience, founders need to be coachable. Companies who are invested in will have 1) a direct sales strategy, that 2) targets state and federal education budgets as their primary source of revenue, have 3) sound product implementation strategies to ensure that the value for which the product was designed is being extracted and used by students, teachers, administrators and many others in K-12. Implementation with fidelity, is the key to realizing a measurable impact on student achievement and improving test scores. Scalable Product Implementation is a Critical Factor in advancing the education system from the 14th Century to and beyond the 21st Century and when the value for which a product is designed is extracted it will be used, with usage comes renewals and recurring revenue. The financial key to success is measured by 4) margin per unit. In K-12 education, funding is allocated in various ways depending on how it is intended to be spent. At times the unit may be per student, per school site, per district and so on. There must be enough capital per unit in the specific budget for which a company will compete to cover its own cost to deliver the product or service while including the cost of Direct Sales and Implementation and still have enough margin to return capital to investors. The final key to success, 5) founders must be coachable. Successfully operating in K-12 requires accepting practice that is counter-intuitive to many entrepreneurs. VCP considers each of the five components critical for sustainability based on decades of observing and analyzing both success and failure in K-12.

1) Direct Sales Strategy. Verse Capital has discovered through research and observation that K-12 EdTech companies who are most successful have a Direct Sales Strategy. Management has witnessed, time and time again, traditional entrepreneurs deploy freemium or other SaaS type sales strategies and fail. Simply put, most entrepreneurs and investors entering K-12 EdTech, don’t have a clear understanding of how to sell at the school, district and state levels. Contracts are not won through freemium offers. Further, in order to be successful in K-12, EdTech companies must reach the inaccessible leadership of this hierarchy. Navigating the K-12 Marketplace is a much more sophisticated and expensive effort than most anticipate or allocate for, leaving both entrepreneurs and investors in very frustrating, difficult and underfunded positions. Gaining the domain expertise needed to successfully operate consumes invaluable time and working capital. In addition to the already existing complexity of K-12 operations is the increased competition that comes with record breaking capital investment. The influx of capital has shortened the window of opportunity leaving it up to a direct sales force to quickly gain access, win business rapidly and grow and defend market share.

2) Primary Revenue Generated from State & Federal Education Budgets. Verse Capital will be partnering with companies that have created solutions for K-12’s most pressing technology needs. The solutions need to be aligned with state and federal education budgets so as to ensure a frictionless path to revenue growth. This is a core requirement to K-12 EdTech startup success and of the Verse Capital thesis. The companies must navigate to the revenue source and unlock the barriers of use, identify specific budgeted line-items, categories, projects, programs, grants, etc. If founders don’t know exactly which budgeted item(s) can be used to purchase their solution, Verse Capital will leverage its education budget expertise, both state and federal, to identify which budget items will maximize the company’s opportunity. Historically of all funding allocated to Education, more than 90% is the responsibility of state, local communities and organizations or non-federal sources. Leaving less than 10% as a Federal responsibility. Yet, even companies focused on a single federal budget item can have a meaningful TAM.

EdTech companies that do not meet the requirements to partner with VCP or that never have a chance to, will endure the entire learning curve. While other companies are spending precious capital and resources on marketing to teachers or parents, over-engineering product and hiring a team who may not be the best suited, VCP will be accelerating its portfolio companies to owning market share. Benefits for the entrepreneurs who partner with Verse Capital:

• Acceleration of go-to-market strategy, when a startup knows who to hire, where to go, when to go and learns how an exponentially more successful launch will occur.


• Portfolio companies hire more efficiently with niche focus on relationships and experience in K-12.


• argeted to those very few with federal budget line-item spending authority and maximizing each point of contact.


• Clear definition of competitive landscape.


• Protects entrepreneurs from product development scope creep because the budget items have discrete deliverables to which the product must align.

Investors in Verse Capital Ventures will benefit from the following:

• Reduced risk to reaching each portfolio company’s profitability.


• Companies spending more efficiently, precious working capital won’t be spent on items the entrepreneurs just didn’t know they didn’t need. total $1.3 trillion education budget. There are more than 129,000 K-12 schools, more than 13,500 districts, but most importantly there are more than 55,000,000 students that can benefit from the right product with the right sales strategy.


• Tapping into a hedge against an economic downturn. This source of revenue, state/federal education budgets are not subject to consumer spending trends or a contracting economy, even with sequestration, federal funding still flows.


• Investing in a fund focused on bringing transformative technologies to the classroom by channeling the dollars that have been allocated to education to companies that will truly make an impact.

Verse Management has worked with EdTech companies with sales teams capable of selling multiple statewide deals at once, the largest districts in the U.S. and managing more than a million users at a time. By sourcing companies that are able to deploy products in K-12 classrooms that align to state and federal education budget needs, VCP will be tapping into a dedicated and protected source of revenue. This revenue source is more stable than other potential sources. Other EdTech sources of revenue include direct to consumer, direct to teacher, direct to student, higher education grants, etc. Verse Management has worked with companies that have targeted just about all potential sources and has identified through iteration and pivot after pivot that those who focus on developing products to meet the needs, selling directly to those who have the authority to make the decision and implementing with fidelity in K-12 are far more successful, scalable and ultimately more efficient. There is enough capital locked in these budgets to support a dozen Microsoft sized organizations. Management has worked alongside executives from some of the largest global EdTech businesses and asset managers from tier I private equity funds to identify the TAM of some of these other sources of revenue. While the direct to U.S. student/parent/guardian TAM is a huge, VCP has identified a behavior pattern that may never change, parents in the U.S. will not part with the resources they have at their disposal for children’s education the way they freely spend on consumables, more iPhones, etc. For most parents in the U.S., the future of their children’s education is tethered to the state and federal education budgets. There is also below average income level parents who don’t have discretionary income readily available so they too will be tied to the education budgets. VCP believes that Higher Education is in a period of significant disruption, viability concerns and price sensitivity driven by its consumers being less willing to pay for a college degree that includes countless hours devoted to art, history and other expensive courses that are not personalized to their needs. Yet entrepreneurs are still making the mistake of chasing these segments and pulling their investors along with them.

Verse Capital Ventures, LLC 506(c) Offering Platform

Terms of the offering

$50,000,000

Minimum Offering: $10,000,000

Minimum Subscription: $100,000 (1 Units)

Verse Capital Ventures, LLC (the “Company, the “Fund”, or “VCV”), a Utah Limited Liability Company, is offering a minimum of 100 and a maximum of 500 Membership Units for $100,000 per unit.