An Open Letter to Our Investors: We Are Shutting Down Klezma

February 5, 2024

5 min

Dear Friends,

As I'm writing this email, a wave of mixed emotions rushes over me.

I can't help but feel a poignant nostalgia, remembering when I was a 13-year-old kid back in 2008, huddled by my computer, losing hours exploring new music, and then plastering my discoveries across my friends' Facebook walls.

Music was my sanctuary; the thrill of uncovering unrecognized talent and helping others communicate and heal through music was special.

However, I didn't understand why these talented artists didn't make it to the radio, but I understood early on how powerful "digital word of mouth," (now known as the "creator economy") truly is.

And so for the next 15 years, I kept spreading music and marketing artists to keep the mission going.

As I grew older and got a bit more business minded and some of the artists I discovered blew up (MGK, Tory Lanez, Chance the Rapper, and more), I realized that they had no clue that I was one of their first and biggest supporters.

They still have no clue that I spread their music all over for them, and not that I needed financial gain necessarily, but wouldn't it be cool if because I believed in them early enough and supported them early on, I would get rewarded for it?

And wouldn't it benefit them to know who their biggest fans are?

Fast forward 15 years. As a near 29-year-old, I had the privilege of you all believing in my passion and investing in a dream I've harbored since I was 13.

I was lucky to bring on my co-founder, Javi, who took a leap of faith and joined me on this amazing journey, and together we put our heart and soul into Klezma, a platform that empowered artists by identifying their most passionate fans and rewarding them for their loyalty and support.

We also brought on amazing advisors such as David Shin (Head of BD @ ImmutableX) and Matt Adell (Multi-time Music Tech Founder & CEO with exits).

Our grand vision was to make labels redundant, enabling artists to be self-reliant through the support of their fans—a challenging yet necessary pursuit. One of which I still very much believe in.

To give the vision the biggest chance of success, I sold all my belongings, left my apartment in Tel Aviv, moved into my mom's basement, relocated to Argentina to work closely with Javi, and with around 30k out of the 75k from our angel round, we managed to build Klezma, a feat I'm incredibly proud of and I am not sure many people on the planet could pull that off.

I'm grateful for the chance to bring my dream to life, a dream that was often laughed at or misunderstood.

We built a reality with users, revenue, partnerships, and a whole lot more.

I owe my gratitude to all of you for your unyielding support.

But unfortunately, just like in sports, sometimes giving it your all doesn't always guarantee a win and our best efforts fell short.

While trying to make the best of whatever cash we had, in order to build more traction to raise a bigger round, the market took a turn and all of a sudden, while we looked great on paper, and had made great progress, the VC world went with it.

The market turned abruptly and we started to run low on cash both in the business and in our personal runways.

I knew the bear market was coming and I decided to continue with the small round that we had after trying to fundraise for almost 6 months with little success (due to bad storytelling), because I believed in us.

It was a big gamble (although we felt we were wasting a lot of time fundraising and the team needed to be back in the trenches). In bear markets, those with enough capital (and persistence/discipline which we definitely had), can ride it through.

This is the advantage in raising a good round and budgeting correctly.

Around that time, Javi had his first child and we decided together that he should look after his family.

I tried to continue to push the business forward but with limited resources, I ultimately came to the decision that I am going to wind down Klezma.

As a CEO, I take complete responsibility for our current situation and, despite our setback, I see a myriad of lessons that will undoubtedly shape me into a better entrepreneur.

It's important to always reflect on what I could have done better and some of those things include:

importance of better product organization
storytelling (keeping it simple is so powerful)
adequate capital
effective time management (making sure you focus on what really brings the best results which is something I believe every early stage startup deals with)
and the necessity of going into nature and not letting laser focus let you forget you are human (this helps with focus, creativity, productivity, and overall big picture vision, in the long term).

As for the next steps, I am doing my best to give an ROI to everyone who devoted time and funds to Klezma. I am currently in the process of finding a potential acquisition for Klezma by September 1st.

Our app, equipped with blockchain and web3 integration, could offer significant value to another company. As for me: I am looking for my next moves in my career and am eager to contribute to great teams in the following fields: