Deal Abstract

Alternative IRA that is built to invest in alternative assets such as cryptocurrency, startups, and loans. Has revenue but very tepid. Been in business for 5 years. Compare to CodeCombat, which raising at a lower valuation and had higher annual recurring revenue selling to extremely defensible base.

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The 6 Calacanis Characteristics (91 161 18)

1. A startup that is based in SVNo: Nashville, TN
2. Has at least 2 founders No (1)
3. Has product in the market Yes
4. 6 months of continuous user growth or 6 months of revenue.Yes: 2018 to 2019, revenue went from $9k to $74k.
5. Notable investors?No: “We’ve secured over $9.8M in funding to date from prominent investors like Moment Ventures, Jefferson River Capital (Vice-Chair of Blackstone Tony James’s Family Office), T.H. Lee, Sequoia Scout, Foundation Capital, Amplify LA, and Alumni Venture Group.”
6. Post-funding, will have 18 months of runway No: Burned $1.9m in in 2019 and raised only $470k at present.

The 7 Thiel Questions (ETMPDDS)

  1. The Engineering question (Can you create breakthrough technology instead of incremental improvements?):
    • Average: Yes, people are interested in alternative investments more than ever, and retirement funds will help. But not seeing this as that venture backable of a company. It’s been around for 5 years and only has $78k in revenue.
  2. The Timing question (Is now the right time to start your particular business?): 
    • Average: See point 1.
  3. The monopoly question (No?): 
    • Bad: Never heard of this company before today.
  4. The people question (Do you have the right team?): 
    • Average: Founder Eric Satz seemed convincing, but not seeing any high profile exits in the same space.
  5. The distribution question (Do you have a way to deliver your product?): 
    • Average: Few people think about IRAs, but I guess digital distribution is fine.
  6. The durability question (Will your market position be defensible 10

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