Deal Abstract
Airbnb for baby equipment, helping young parents travel without baby equipment.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $5000000 |
| 2. Fundraised So Far? | $1700000 |
| 3. Pre-Money Valuation? | $18000000 |
| 4. Previous Year's Annual Revenue | $490991 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-1475057 |
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 Fe, NM |
| 2. Has at least 2 founders? | False: Two |
| 3. Has product in the market? | True: Revenue generating |
| 4. 6 months of continuous user growth or 6 months of revenue? | False: Revenue declined |
| 5. Notable investors? | False: No one I recognize |
| 6. Post-funding, will have 18 months of runway? | True: Needs $2.1m in revenue to having 1.5 years of runway |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | No Airbnb for baby equipment yet |
| 2. Timing? | 2 | Could see the argument with the sharing economy, but I'm curious if demand for this would be hockey shaped |
| 3. Monopoly? | 3 | Has done really well with great reviews in the market |
| 4. People? | 3 | Wow, the CEO is one of the former co-founders of Match.com, but that business had a poor exit |
| 5. Distribution? | 3 | Good traction |
| 6. Durability? | 3 | Network based business |
| 7. Secret? | 2 | Demand for baby stroller services and equipments is set to enjoy hockey stick growth due to young parents who don't want to carry stuff |
What has to go right for the startup to return money on investment:
1. Recover from the 2020 dip; 2. Build a platform that becomes two sided marketplace for other baby needs; 3. Can Babyquip eventually move into the subscription baby needs business model?
What the Risks Are
1. Sort of like Daycation, a service the exists as an addendum to other main hospitality businesses; 2. Growth speed is limited as it's a hardware network; 3. LTV for customers is limited by how quickly the child grows
Bonus Muhan's Notes
Really interesting business, right on the fence about this one.
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
So, did I invest?
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