Building an AI EdTech Company: College Guidance Network CEO Jon Carson (Part 5)

Sramana Mitra: What about the financing strategy of this business? You’ve done venture-funded companies before. You’ve had exits. You were coming into this business with your own personal needs. Did you bootstrap the beginning? Did you fund it right away?

Jon Carson: I did fund it for about a year to a year and a half.

Sramana Mitra: Up to what milestone?

Jon Carson: I brought in the first investor as we were launching the Masterclass Library.

Sramana Mitra: The Masterclass Library was ready to some extent?

Jon Carson: No, it took about a year to build. The Masterclass Library is a series of expert interviews that we began in 2020. By 2021, we had enough critical mass to offer a library. It was right as we were offering that library that I brought in the first investor. We’d been at it for about 18 months.

Sramana Mitra: So that 18 months of library development, you funded yourself, and then you raised money?

Jon Carson: Yes.

Sramana Mitra: How much did you raise in the first round?

Jon Carson: I was doing a note — a rolling close — with three different notes.

There are four major sources of capital: yourself, institutional venture capitalists, strategic investors, and people who do work in kind for deferred compensation.

I’m wired into the venture community, but I felt the venture market was closing due to a shrinking exit window. I didn’t pursue venture much — maybe five pitches total. Instead, I went after family offices and high-net-worth individuals. That’s my syndicate — A-listers, some of them famous. It’s not friends and family, it’s serious investors. I’ve also got a few institutions involved, contributing quarter to half a million each.

Sramana Mitra: And mostly personal networks?

Jon Carson: Yes.

Sramana Mitra: How much have you raised across the three notes?

Jon Carson: $5.5 million.

Sramana Mitra: Is that all?

Jon Carson: I’ve also got deferred compensation. Some senior people haven’t taken salaries or only small ones. That adds a couple million more.

Sramana Mitra: So that’s the entire financing so far?

Jon Carson: Yes, and all the capital has gone into the product.

Sramana Mitra: What level of revenue have you accomplished?

Jon Carson: North of $5 million, below $10 million.

Sramana Mitra: How long did it take you to hit your first million, and on what business model?

Jon Carson: Yes, we reached it through the K–12 model at $5 per student. The state contracts got us there.

Sramana Mitra: What kind of contracts?

Jon Carson: We got into a very exclusive club — the state commissioners of education. The most influential one is Jeff Riley from Massachusetts, the top-ranked state. From Jeff, we connected with Frank Edelblut in New Hampshire. Those two state contracts really got us airborne.

This segment is part 5 in the series : Building an AI EdTech Company: College Guidance Network CEO Jon Carson
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