Deal Abstract

Managed marketplace for inspections. Has good revenue, vendor pool, and contracts, but makes one wonder will this market grow fast enough to be venture backable.

Financials (VRB)

Question	Notes
1. Fundraising Target?	$1070000
2. Fundraised So Far?	$41000
3. Pre-Money Valuation?	$10000000
4. Previous Year's Annual Revenue	$55548
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)	~$-456243

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: Brooklyn, 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: Grew from 0 to $55k
5. Notable investors?	True: Y-Combinator and Urban.us
6. Post-funding, will have 18 months of runway?	True: Yes, but needs $750k roughly

Source

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

Question	Score	Notes
1. Engineering?	2	Managed marketplace a la a16z
2. Timing?	2	Is this a time when demand for this service goes exponential?
3. Monopoly?	2	150 inspections with 1000 inspectors generating $150k in rev, not bad
4. People?	2	People seem fine
5. Distribution?	2	See the 150 inspections, $150k in revenue
6. Durability?	3	Very durable, assuming this managed marketplace is important
7. Secret?	3	As leaders at organizations age out and younger leaders come in, the marketplace for inspections and inspectors will become increasingly more digital

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

1. Scale revenue; 2. Consistently identify and find the right decision maker at companies that need inspections; 3. Navigate the marketplace/SaaS model correctly

What the Risks Are

1. Market is too niche/not growing fast enough; 2. Other networks will also start developing and you'll end up getting regional networks; 3. SaaS is being competed against on other side as well a la https://muhanzhang.com/optelos/

Bonus Muhan's Notes

Very cool company, though it makes me wonder how venture backable this sector is.

Updates

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