Deal Abstract
VR company is building hardware/software/production house for VR experiences for the elderly. Strong recurring revenue for selling to elder care communities.
Financials (VRB)
|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1070000|
|2. Fundraised So Far?|$73129|
|3. Pre-Money Valuation?|$8000000|
|4. Previous Year's Annual Revenue |$139781|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-703321|
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: Flower Mound, TX |
| 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: Rev grew from 59 to 139k |
| 5. Notable investors? | True: Capital Factory def a regional player, HTC is a faded glory kind of deal (HTC Vive?) |
| 6. Post-funding, will have 18 months of runway? | True: Just at 18 months if $1m raised |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | Company that is allegedly developing hardware and software, but why this company over Oculus? |
| 2. Timing? | 3 | Hard to get better timing than COVID |
| 3. Monopoly? | 3 | Good traction |
| 4. People? | 2 | Company has solid media backgrounds but no hardware chops |
| 5. Distribution? | 3 | Selling to retirement homes the real gem here |
| 6. Durability? | 3 | Focusing on building a brand for |
| 7. Secret? | 3 | Old people, with money, in large quantities, are going to get their kicks through virtual reality |
What has to go right for the startup to return money on investment:
1. Old people have to not be luddites; 2. Get really good at both hardware and software, and figure out what the core business is here; 3. Don't incur high servicing costs
What the Risks Are
1. Does the market want this? What's prevented Vive/Oculus/Google Cardboard to take this to market? 2. Attacking media, software, and hardware could mean lack of focus; 3. Market is not growing fast enough
Bonus Muhan's Notes
Very, very cool. Hope they can crack this market.
Updates
This is where I’ll post updates about the company. This way all my notes from offering to post-offering updates will be on one page.
Review these deal memos every time the startup raises a new round
Test if original thesis still applies
Notice trends in how you think
So, did I invest?
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