Executive Summary
Americans spend $1billion on standardized test preparation services, many of which are simply ineffective. Yet, they lack guidance for the college admissions process: the average American high school student receives only 38 minutes of advice from a guidance counselor. Test prep companies like The Princeton Review offers exclusively test preparation services, while premium college consultancies like IvyWise charge $33,000 for their recommended packages and have students paying upwards of $200,000 for their services. Students have no accessible and comprehensive resource to simplify the college acceptance process. To solve this problem, Prep offers an affordable, one-stop shop service for everything the 6 million students in the United States need to navigate the path to college acceptance.
Prep’s comprehensive program combines world-class college consulting with proprietary standardized test preparation services to guide students through the three year college application process. Our program provides students with all the necessary services to traverse the admissions process. Prep uses a hybrid model of dynamic group instruction and tailored 1:1 tutoring and counseling to ensure that students have access to high-quality college preparation services for an affordable, monthly subscription fee. Our proprietary materials and innovative teaching techniques lead to average gains of 4.2 ACT points, over 4X more than industry averages. We are so confident in our ability to deliver that we offer a money-back guarantee for our students’ admission into one of their top 5 dream schools.
Prep, spearheaded by James Konsky, is uniquely positioned to service the needs of these customers. He is joined by an Ivy league-educated team and supplemented by advisors who include former admissions officers, test prep company founders, college counselors, and a former district superintendent. James’s family business developed the teaching materials, and he will be working full-time on Prep after college.
During the first two years, Prep plans to capitalize on the Midwest and Southeast regions’ untapped college-preparatory services market by focusing on the early adopters: white, middle-income, rural-suburban parents. Over time we will saturate these regions, achieving market penetration. We will incur the majority of our expenses in acquiring talent and marketing aggressively, using per-location occupancy rates, customer lifetime value (LTV), and customer acquisition costs (CAC) as measures of success. Successful execution implies LTV is at least 6.0X greater than CAC.
In 2021, Prep projects that it will earn $92,657,088 in revenue while incurring $38,747,553 in operating expenses, leading to $29,208,418 in after-tax net income. We will employ 1565 employees, including District Directors, tutors, counselors, and software engineers. Prep is raising $3.5 million in Series A funding to recruit and acquire tutoring talent and market aggressively in new locations. In doing this, we envision providing approximately 90,000 customers access to a complete suite of college preparation services in 2021.
