Deal Abstract
![](https://uploads.republic.co/p/offerings/seo_images/default/000/000/768/768-1611875067-e08f077bc25bf7fbb1c864a51bfd83789f9945eb.png)
Mobile app is helping people train their hearing. Very positive business, the question is how they can grow to become venture backable.
Financials (VRB)
Question | Notes |
---|---|
1. Fundraising Target? | $1070000 |
2. Fundraised So Far? | $57647 |
3. Pre-Money Valuation? | $9750000 |
4. Previous Year's Annual Revenue | $2288 |
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-64049 |
![](https://muhanzhang.com/content/images/2021/02/ScreenShot2021-02-23at3.54.21PM.png)
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: Santa Monica, CA |
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: Though modest revenue |
5. Notable investors? | False: No one I recognize |
6. Post-funding, will have 18 months of runway? | True: Low burn, needs only $100k |
![](https://muhanzhang.com/content/images/2021/02/ScreenShot2021-02-23at3.55.21PM.png)
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
Question | Score | Notes |
---|---|---|
1. Engineering? | 3 | Don't know of another app that not only diagnoses but improves hearing |
2. Timing? | 1 | Not sure why this is the time this market will explode |
3. Monopoly? | 2 | Good amount of user data |
4. People? | 2 | Team seems strong, though strange that the technical co-founder isn't on there either |
5. Distribution? | 2 | Distribution to app store, but are the founders influencers in this space? |
6. Durability? | 2 | What's to stop someone else from making this app? What's making customers sticky here? |
7. Secret? | 3 | By using novel technology training processes, the AudioCardio team can meaningfully improve people's hearing and use that as a beachhead into a general wellness app |
What has to go right for the startup to return money on investment:
1. Scale revenue; 2. Develop a platform, not just be a product; 3. Demonstrate meaningful improvement of hearing at scale
What the Risks Are
1. Too niche' 2. Ambiguous impact of product; 3. No market
Bonus Muhan's Notes
Excited to see the founders vision for turning this into a platform.
![](https://muhanzhang.com/content/images/2021/02/image-20.png)
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
![](https://muhanzhang.com/content/images/2020/10/image-13.png)
So, did I invest?
Click here to find out.Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.