Deal Abstract

https://republic.co/alphaflow

Marketplace for sellers and buyers of real estate financial instruments. Has nearly $1 million in revenue as of 2019 and in a good position to grow. Valuation at $40mm means I’m auto-out of the deal, but not a bad growth investment for those who like real estate.

Shout out to reader and fellow investor Peter for forwarding me the deal!


Interested in startup investing? Subscribe to my premium newsletter, Startup Investing, to receive exclusively weekly content, tailored for the startup investor.


The 6 Calacanis Characteristics (91 161 18)

CheckYes/No
1. A startup that is based in SVYes: San Francisco, CA
2. Has at least 2 founders No: One
3. Has product in the market Yes
4. 6 months of continuous user growth or 6 months of revenue.Yes: 2018 revenue was $126k, 2019 was $922k
5. Notable investors?Yes: Y-Combinator, Social Capital (and 2018 scandal,) and others.
6. Post-funding, will have 18 months of runway No: Burned $3mm in 2019, raised only $500k.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question:
    • Good: this market exists and is indeed very fragmented.
  2. The Timing question
    • Good: managed marketplaces for the win.
  3. The monopoly question
    • Good: Look at that revenue. But I will say, regulatory may slow it down.
  4. The people question: 
    • Good: Team seems well positioned to execute. Interesting that founder found and sold RealtyShares. Not sure how the company was, but an exit’s an exit.
  5. The distribution question
    • Good: Hobnobbing with finance bros.
  6. The durability question
    • Good: Solid.
  7. *What is the hopeful secret?: 
    • Not much secret, there’s definitely a market for digitizing the purchase and selling of digital real estate financial instruments.

What has to go right for the startup


Want to read the whole post?


You don't have access to this post on Startup Investing for All by Muhan Zhang at the moment, but if you upgrade your account you'll be able to see the whole thing, including comments, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.