VC1: “Didn’t get a chance to say so last week, but this is the best update I’ve read since the start of COVID.” VC2: “In general, this is the most thoughtful communication I’ve had during this period.” VC3: “Really like the formatting btw — easy to navigate and get key q&a fast. May ask if I can use as a template for our other companies?” Flipside Investors, Hope everyone is doing well — I know the current state of the world is causing a wide range of feelings and some level of anxiety in all of us. With that in mind… Below is an update on Flipside which you can choose to read either as a short, welcomed distraction from world events, or a valuable communication regarding the status of your investment and the progress of our business. Oh, what the hell, let’s go big — how about both? First and foremost, I have a confession to make: I believe strongly that recessions are the greatest point to launch into successful models. I’m a creature of habit: BzzAgent was built in 2001 and Smarterer in 2010. Both times of economic rebirthings. There are countless reasons these eras drive opportunity — new belief systems are born, talent is eager to contribute, vendors will fight for your business through cost reduction, competitors can’t stay afloat…I could go on and on — and we are entering the next depression/rebirth now. We are of course keeping a close eye on the market in general and how it might impact Flipside’s customer base and opportunities for growth, but I generally believe we are positioned very well to get through a downturn, and into the world order that is to come. I cannot tell you how pumped this makes me from a leadership perspective. With that in hand, your favorite investor questions about Flipside are answered below: DO YOU HAVE ENOUGH CAPITAL? We have ~$7M in the bank, and 23 months of running room. We have been successfully signing clients to business intelligence solutions. We beat our Q1 bookings target and Q2’s pipeline is very healthy. That said: while we are well positioned, we are not taking this lightly and we will be extra efficient with costs as we understand the implications for this new era. HOW IS YOUR TEAM RESPONDING TO WORK FROM HOME? Like many others, our team went fully remote two+ weeks ago and will likely be for the short- to mid-term. For some companies, this is a lemon scenario. We were fortunate to already have a number of remote team members, and a remotely integrated toolset. I’ll be honest: while the impact of fully remote work is still settling in, this past two weeks has been one of the most productive this team has ever had — and personally one of the most fulfilling on the work front I’ve had in years. Our team slipped seamlessly into a new working pattern without so much as a stutter step — and crushed. We signed clients, executed on product (more below), built pipelines of new customers, and progressed every area of the business. The impact to our team mates with younger kids has certainly been a shift, and we are working hard at recognizing the impact and being flexible to accommodate needs. Overall, I’m optimistic we can create lemonade on the remote work front. Lemons to Lemonade. Pic c/o Daryana Kossar HOW WILL THIS IMPACT YOUR SPACE AND YOUR MODEL? I’m confident that the economic and cultural transformations will force the best blockchains to become better, and kill off blockchains that are weak — and that business intelligence will be a requirement and critical asset to those that survive. We signed 2 customers last week alone, and the pipeline backlog seems to be healthy. Our goal for Q1 was $[XX] in bookings, and we’re at 170% of plan, having booked about $[YY] so far. We’ve continued to chainwalk major chains ( , , , , Ripple, etc.) which provides us a major data moat as well as relationships that mature into customers and revenue. We have about 40 chains Chainwalked (including Bitcoin and ). Near Protocol Cardano P olkadot Blockstack ethereum Net: I feel fortunate that we are in a digital-first industry that is likely to be advantaged by a transformation in economic stability — and am bullish on what it means for us overall. WHAT ELSE IS COOL THAT I CAN SHARE WITH ALL MY FRIENDS? Well, I’m glad you asked. See , which quietly rolled out with our first two partners last night. Dozens of more partners are slated over the coming weeks. The Flipside Data Cooperative The Data Co-Op is a transparency focused initiative that offers a public, shareable on-chain view of key network stakeholders, asset flows — as well as industry benchmarks. It’s an expression of what is possible with our behavioral modeling, and provides investors, protocols and ecosystem operators a clear view of actual health and activities within blockchains. A COVID FOOTNOTE… We are all aware that the changes in the market have had irreversible short term implications on many industries (restaurants, travel, hotel, events, etc.). This is a terribly frightening time. As CEO of Flipside my role is to manage the business and increase shareholder value. While I feel optimistic about our space and offering, I also believe there has never been a more important time to support our team mates, friends and neighbors in whatever way we can. This quarter I’ll be spending a significant amount of time ensuring we help others in any way we can. I hope everyone stays safe and healthy out there. Any questions, please let me know, Dave
