What the capital is for: equity for brand and people, debt for goods

While preparing our fundraising materials, I asked an AI tool to review how I planned to allocate capital. I had mistyped the company name, and it earnestly analysed a spacecraft called Hope, and then a conglomerate of the same name. I laughed, corrected it, and asked the question I actually cared about: if someone puts money in, where should it go, and which money should not come from an investor at all?

The second half of that question matters as much as the first. Many founders think only about how much they can raise. I think more about the fact that every dollar of equity is a slice of the company I am selling, so each one has to do work that debt cannot do.

Two kinds of money, two kinds of work

I split the company's funding needs into two groups.

The first is working capital for goods: raw materials, production, inventory. This money turns over. Stock comes in, sells, cash returns, and the cycle repeats. It is predictable and measurable, and so it can be borrowed or carried by cash flow. I said it plainly in that conversation:

"What the company needs is brand-building marketing to reach sales, because the capital for producing the product is something I can borrow."

The second group is long-term value that a bank will not lend against: a brand people remember, a new product line given enough time to be done properly, a sales team that has been trained well. None of these sit on a balance sheet as collateral. They do not pay back monthly. If they fail, there is no inventory to liquidate. Precisely because of that risk, they are the right job for equity: the investor shares the risk and shares the upside.

Selling part of the company to buy raw materials is, in my view, paying too high a price for something a cheaper tool can solve. Borrow for goods; use equity for brand and people. I hold this as a discipline, because it determines how much we dilute for each step we take.

The Pre-seed round: three things, no more

HOPE's first round is a Pre-seed of US$250,000 for 20% of the company. We have taken no outside capital before this. The money goes to three things only:

• 40% (US$100,000): scaling the IKI brand. Content, community, identity and channels. This is the brand-building I described above.
• 30% (US$75,000): new product R&D. The focus is a beauty line, plus completing our key nutrition product. Everything remains a dietary supplement, with no medical claims.
• 30% (US$75,000): commercial capability. A sales team, official stores on e-commerce platforms, and a programme to bring customers back.

There is no line for raw materials or inventory. That is deliberate. I want an investor to read this table and see that their money is not being used to plug gaps the operating cash flow should cover.

One more thing I said early in that conversation: education, such as the IKI Academy, mainly builds the funnel and confirms trust; the real money sits in the product and in returning customers. So capital does not flow there as a separate business line.

The base we are spending from

A neat allocation says nothing if the business beneath it has no foundation. This is what we have, using only reconciled numbers (see why we publish only reconciled numbers):

• Net revenue for the first nine months of 2026 of about VND 3.57 billion (about US$137K), reconciled from the order ledger, courier waybills and bank statements. For 2023 to 2025 there is no reconciled ledger, so we do not disclose figures.
• 1,294 paying customers between March and September 2026. 40.5% of customers who first bought in March to June have bought again, and customers who bought two or more times generate about 66% of revenue. I wrote about this measure in returning customers are the real yardstick.
• Paid advertising in 2026 of about VND 34 million, roughly 1% of revenue. Customers come mainly from a community we own, so ad spend is not the main engine of growth today.
• Gross margin of about 60 to 65% after gifts and shipping.

Read together, the picture is: the product sells, a meaningful share of customers return, and sales do not depend on burning ad money. For a company like that, what is missing is not money to run day to day. What is missing is brand weight, a second product line strong enough to stand, and a sales team with a method. Those are exactly the three items this round targets.

The risks, stated directly

I do not want to write about capital and skip the hard part. The risks we see clearly:

• Dependence on the protein line. About 66% of revenue comes from one product line. The product R&D budget exists to reduce this concentration, through the beauty line, tea and other products.
• Tightening rules on supplement advertising. We treat not relying on medical claims as an advantage, but we must watch it continuously. I tell that story in the legal guardrail is part of the product.
• The repeat-purchase rate still has to be raised through real work. 40.5% is a good start, but with no reconciled 2025 data we cannot yet measure long-term retention.
• Competition on e-commerce platforms will be harsher than the community channel we are used to.
• Founder dependence. I reduce it with AI-assisted operations, written processes and weekly advisors, but it has not disappeared.

What an investor receives

An equity investor has every right to ask, "How will you spend my money?" I answer with three things.

First, transparent numbers. Revenue comes from the same figures I use to run the company, not a separate prettier set for investors. Second, milestone discipline: each stage of spending has a pass-or-fail gate, starting with the returning-customer rate, and I will report even when the result is not what we hoped. Third, a clear boundary between kinds of money: equity goes only into what builds long-term value, while money for goods is covered by borrowing and cash flow.

I know 20% of a company is not small. So I want every investor dollar to be traceable: what it bought, and what that did for returning customers. If you are the person who may put that money in, that is what I would like you to check me on.