8 The Financials
Funding Needs, Budget Allocation, and Revenue Projections
Abstract
This chapter presents a compelling investment opportunity, detailing Artalytics’ funding requirements and financial projections. It explains the need for $300,000 in initial funding, with a breakdown of how the funds will be allocated across product development, marketing, operations, and contingency planning. The chapter also provides conservative growth projections, highlighting anticipated revenues, profitability timelines, and attractive returns for early investors. Investors will find valuable information to assess the financial viability and potential return on investment.
Funding Needs
Artalytics seeks $300,000 to drive platform optimization, scale marketing, and expand operations.
| Year | Milestone | Details |
|---|---|---|
| Year 2 | Profit Target | Anticipated break-even by EoY 2. |
| Year 3 | Revenue Target | Projected revenue of $1M by EoY 3. |
| 2030 | Long-Term Growth | Goal of 1.2B in revenue (10% of market) |
This revenue milestone lays the groundwork for our longer-term growth objecting of reaching $1.2B in annual revenues by 2030- representing 10% of the $12B digital art market Chapter 3.
While the current roadmap is targeting $1M in revenue through subscriptions, licensing, and marketplace fees, each successful phase (from pilot adoption to marketplace scale) moves us incrementally closer to this broader market share objective.
Current Funding Status
The company has been entirely financed personally by the founder with no existing external investors, providing an opportunity for first-round investors to gain significant equity.
Allocation of Funds
The following visual (Figure 1) provides an overview of how the $300,000 will be distributed. The largest and most critical need at this stage is platform development in order to prepare us for an external pilot release.
Up next, we present anticipated growth following the closing of a future seed round funding (EOY 2025)1.
For a more granular breakdown of how funds will be distributed, see Section I in the Appendix.
Projections & Growth
In this section you’ll find our projected sales, profits, and implied growth rate over a three year period beginning with a Seed Raise targeted for end of year 2025. First, we’ll take a look at a table containing the projections, followed by a visual highlighting our growth and providing the revenue split by tier.
Recall the multi-tiered revenue streams introduced in Chapter 4.1 (Business Model) and the early traction outlined in Chapter 5 (Pilot Program). These form the basis of the revenue assumptions presented below.
Financial Projections
The table presented here (?tbl-financial-projections) shows our forecasted units sold, revenue generated, and profit for the first three years. Also included is an estimate of expenses to illustrate an expected break-even point during the period.
Building on Pilot Phase Momentum
These forecasts assume successful onboarding of pilot artists and at least one institutional partner in Year 1, as described in Chapter 5. We expect this early traction to validate our subscription and licensing model during Year 1, driving the initial wave of revenue while we prepare for a wide launch.
| Metric | 2025 | 2026 | 2027 |
|---|---|---|---|
| Total Revenue | $36,500 | $211,250 | $980,000 |
| Total Expenses | -$500,000 | -$700,000 | -$900,000 |
| Net Profit | -$463,500 | -$488,750 | $80,000 |
| Pro Subscriptions | |||
| Revenue ($) | $22,500 | $112,500 | $562,500 |
| Share (%) | 62% | 53% | 57% |
| Units | 75 | 375 | 1,875 |
| Market Transactions | |||
| Revenue ($) | $0 | $56,250 | $281,250 |
| Share (%) | 0% | 27% | 29% |
| Units | 0 | 562 | 2,812 |
| Edu Licenses | |||
| Revenue ($) | $9,000 | $22,500 | $56,250 |
| Share (%) | 25% | 11% | 6% |
| Units | 1 | 2 | 6 |
| Gallery Services | |||
| Revenue ($) | $5,000 | $20,000 | $80,000 |
| Share (%) | 14% | 9% | 8% |
| Units | 1 | 4 | 16 |
Our unit-based projections in ?tbl-financial-projections directly tie to the subscription tiers and licensing structure first introduced in Chapter 4.1, ensuring consistency across our product and financial strategies2.
Revenue Growth & Share
The plot presented in this section details total revenue by year, the share of revenue split by tier (artist subscriptions, institution licenses, and gallery services). Also included is the 3-year CAGR capturing revenue growth over the period.
Forecasted revenue discussed in this chapter follows our target ratio of 60% from subscriptions (Pro Tier, institutional tiers), 30% from licensing and premium services, and 10% from marketplace transaction fees, previously discussed.
Indicative Returns
To provide a benchmark for potential returns, we look to comparables:
- OpenSea soared to a $13B valuation by fostering large-scale NFT trading, though our curated, trust-focused approach differs in scope and addresses high-end digital art.
- GitHub underscores the value of a secure repository model, acquired by Microsoft for $7.5B in 2018.
Given these parallels, we anticipate a 5–8× ROI for pre-seed investors at the next major liquidity event, contingent on achieving the milestones laid out in Chapters 4 and 5. Our approach—centered on verified authenticity and curated market access—positions us for substantial value creation as we scale.
Investor Takeaway: With a well-defined financial plan and conservative growth projections, Artalytics presents a compelling investment opportunity. The requested funding will accelerate development, expand market reach, and position the company for sustained profitability and market leadership.
Up Next
In Chapter 9, we finalize our investment thesis, outline potential due diligence steps, and detail the strategic rationale behind Artalytics’ path to capturing a significant share of the digital art market.
We define Year 1 as beginning Q1 2026. This current pre-seed fundraising round closes early 2025, enabling the ramp-up and preparation for a seed or Series A round towards the end of 2025.↩︎
For a breakdown of our $300 Pro Subscription price and average licensing fees ($5–25K, depending on institution size), see Section 4.1.1 and Section 4.1.2. We avoid repeating every price point here to keep the focus on macro-level financials.↩︎