SaaS company is selling AI to recognize threats in CCTV security systems. Strong revenue but what is the greater vision for becoming a big security company?
|1. Fundraising Target?||$150000|
|2. Fundraised So Far?||$78435|
|3. Pre-Money Valuation?||$4000000|
|4. Previous Year's Annual Revenue||$0|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)||~$-6375|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||False: New York, NY|
|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?||True: MRR in Nov 2021 was $11.7k|
|5. Notable investors?||False: No one I recognize|
|6. Post-funding, will have 18 months of runway?||True: Very low burn|
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
|1. Engineering?||2||Selling SaaS to upscale CCTV systems|
|2. Timing?||1||Not sure why this is the right timing for this business|
|3. Monopoly?||3||Impressive revenue growth|
|4. People?||2||Team seems fine but not sure why they are building this business|
|5. Distribution?||2||Good revenue, but does this business have an unfair advantage in accessing their customers?|
|6. Durability?||1||Not sure what's stopping another business from taking a simple computer vision AI and applying it to CCTV|
|7. Secret?||1||SaaS to upgrade CCTV systems to automatic detection is a billion dollar business|
What has to go right for the startup to return money on investment:
1. Identify what is the pattern behind all the customers they're getting; 2. Team up with hardware providers to sell trials and discounts; 3. Get a vision for what this company is trying to become
What the Risks Are
1. What is the vision for this company to become a billion? 2. What is stopping camera companies from getting their own SaaS solutions? 3. Is this is a security company or a security feature?
Bonus Muhan's Notes
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?Click here to find out.
Other thoughts, questions, comments, or concerns? Write me at email@example.com and let me know.