Deal Abstract

Invest in AudioCardio
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Mobile app is helping people train their hearing. Very positive business, the question is how they can grow to become venture backable.

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $57647
3. Pre-Money Valuation? $9750000
4. Previous Year's Annual Revenue $2288
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-64049
Source

The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)

Criteria Yes/No
1. A startup that is based in SV? False: Santa Monica, CA
2. Has at least 2 founders? True: Two
3. Has product in the market? True: Revenue generating
4. 6 months of continuous user growth or 6 months of revenue? True: Though modest revenue
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: Low burn, needs only $100k
Source

The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)

Question Score Notes
1. Engineering? 3 Don't know of another app that not only diagnoses but improves hearing
2. Timing? 1 Not sure why this is the time this market will explode
3. Monopoly? 2 Good amount of user data
4. People? 2 Team seems strong, though strange that the technical co-founder isn't on there either
5. Distribution? 2 Distribution to app store, but are the founders influencers in this space?
6. Durability? 2 What's to stop someone else from making this app? What's making customers sticky here?
7. Secret? 3 By using novel technology training processes, the AudioCardio team can meaningfully improve people's hearing and use that as a beachhead into a general wellness app

What has to go right for the startup to return money on investment:

1. Scale revenue; 2. Develop a platform, not just be a product; 3. Demonstrate meaningful improvement of hearing at scale

What the Risks Are

1. Too niche' 2. Ambiguous impact of product; 3. No market

Bonus Muhan's Notes

Excited to see the founders vision for turning this into a platform.

Updates

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Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.