Deal Abstract

Invest in Arbol: Connecting low-income students with financial + community support | Wefunder
Connecting low-income students with financial + community support
Arbol on Wefunder

Crowdfunding and GoFundMe for low income college student living expenses.

Financials (VRB)

Question Notes
1. Fundraising Target? $150000
2. Fundraised So Far? $59100
3. Pre-Money Valuation? $2500000
4. Previous Year's Annual Revenue $0
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-12700
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: Buffalo, NY
2. Has at least 2 founders? True: Two
3. Has product in the market? False: Beta
4. 6 months of continuous user growth or 6 months of revenue? False: No revenue
5. Notable investors? False: N/A
6. Post-funding, will have 18 months of runway? True: Minimal burn so good to clear
Source

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

Question Score Notes
1. Engineering? 2 GoFundMe for college students
2. Timing? 1 Not sure why this is the right time to build this business
3. Monopoly? 1 Very little market share
4. People? 2 Good professional experience but none running a crowdfunding type of company
5. Distribution? 1 What advantages does Arbol have in attracting donors?
6. Durability? 1 Not sure why this platform is that differentiated from GoFundMe and the like
7. Secret? 1 Recurring donors to college students believe finding worthy students is the biggest barrier to them donating more

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

1. Convert students into content marketers; 2. Develop special distribution to donors; 3. Find a way to capture some of the value being given

What the Risks Are

1. Non-profit not a startup; 2. Market isn't growing fast; 3. Unclear of the defensiveness of this platform

Bonus Muhan's Notes

Good mission, but can it become a sustainable business?

Updates

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Review these deal memos every time the startup raises a new round

Test if original thesis still applies

So, did I invest?

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