Deal Abstract
Surfing bros team up to make acai flavored sorbets, delicious. Question will be can they scale other flavors/acai products/markets.
Financials (VRB)
|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1070000|
|2. Fundraised So Far?|$42450|
|3. Pre-Money Valuation?|$6000000|
|4. Previous Year's Annual Revenue |$271762|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-577580|
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: Key Biscayne, FL |
| 2. Has at least 2 founders? | True: Two |
| 3. Has product in the market? | True: Looks like the push pops I used to have in childhood |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: $67k to $271k |
| 5. Notable investors? | False: None I see |
| 6. Post-funding, will have 18 months of runway? | False: Would need $750k to have 18 months and quite far from there at present |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | Delicious flavor innovation |
| 2. Timing? | 1 | Not sure why this time is particularly good to start this business |
| 3. Monopoly? | 2 | Haven't heard of this company, but also haven't seen other companies provide an acai sorbet |
| 4. People? | 2 | Good background in food import and digital marketing, but no one who has built a massive B2C food brand before |
| 5. Distribution? | 2 | Has good distribution with supermarkets but still has gatekeeper |
| 6. Durability? | 1 | Not sure why a sorbet company couldn't just build their own acai flavor |
| 7. Secret? | 1 | Acai and other non-American flavors are a billion dollar business waiting to be tapped |
What has to go right for the startup to return money on investment:
1. Scale and sell more; 2. Expand to more flavors; 3. Unique defensible flavor techniqunes
What the Risks Are
1. Food scales slowly; 2. Distribution matters more than flavor; 3. Acai is less crucial than the qualities it denotes
Bonus Muhan's Notes
Updates
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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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