Deal Abstract
Corporate VC backed company with founder money (we're talking $7m here, dear readers) is trying to solve sustainability data modeling for architecture firms.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1500000 |
| 2. Fundraised So Far? | $319051 |
| 3. Pre-Money Valuation? | $15000000 |
| 4. Previous Year's Annual Revenue | $836646 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-610539 |
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: New York, NY |
| 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: Pleasantly surprised that rev grew from $489k to $836k |
| 5. Notable investors? | True: $2m in seed funding from Autodesk (ADSK) |
| 6. Post-funding, will have 18 months of runway? | True: If they successfully raise then good, but not on track at present |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | Honestly, hard for me to assess |
| 2. Timing? | 2 | Not sure why this market is growing at venture clip |
| 3. Monopoly? | 3 | Will give credit where credit is due, revenue is up and to the right |
| 4. People? | 4 | Founder invested $5m in personal capital to build out the company |
| 5. Distribution? | 3 | Got Autodesk investment and founder has right background to sell |
| 6. Durability? | 4 | Super durable |
| 7. Secret? | 2 | Economic analysis software for sustainable buildings and infrastructure is a market that is about to grow venture sized |
What has to go right for the startup to return money on investment:
1. Market has to grow faster; 2. Scale sales and not just be founder centric; 3. Solve not just a 'nice to have problem' (sustainability) but eventually become indispensable
What the Risks Are
1. Speed of market growth; 2. B2B sales means that closing the $5m in pipeline takes longer than expected; 3. Corporate company putting in $2m and founder putting in $5m means it is allowed to grow slower
Bonus Muhan's Notes
Very very interesting company, have to spend more time to understand what types of data this company actually does. Fundamentally though, having corporate VC and founder who put in $5m is extremely compelling.
Updates
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So, did I invest?
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