Deal Abstract
D2C testing company wants to build the subscription wellness platform to help you regularly assess your chronic disease risks.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1070000 |
| 2. Fundraised So Far? | $213097 |
| 3. Pre-Money Valuation? | $5000000 |
| 4. Previous Year's Annual Revenue | $7418 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-250355 |
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: Austin, TX |
| 2. Has at least 2 founders? | False: Two |
| 3. Has product in the market? | True: Shipping out test units and such |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Yup, grew from $0 to $7418. Also 'We are still finalizing year-end accounts but expect that the final number will be close to $250k top line.' |
| 5. Notable investors? | True: Capital Factory |
| 6. Post-funding, will have 18 months of runway? | True: Needs $375k |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | Lots of testing solutions at home, but cool that they designed an antibody test |
| 2. Timing? | 3 | Good timing with pandemic |
| 3. Monopoly? | 1 | Seems like modest revenue |
| 4. People? | 2 | People seem fine, but a little thin on teeam |
| 5. Distribution? | 2 | Doing well with D2C and also Amazon |
| 6. Durability? | 2 | Big if is whether the software platform will be enough to keep people on |
| 7. Secret? | 2 | Sensitivity around chronic disease is going to spike, so the company's focus on insulin, blood sugar, etc. will have venture sized demand |
What has to go right for the startup to return money on investment:
1. Establish strong partnerships with doctors; 2. Probably get things backed by insurance at some point; 3. The market has to happen
What the Risks Are
1. The market doesn't exist and only fitness geeks really test their insulin resistance levels at home; 2. This business needs telehealth to take off before it can get to final stage; 3. What's stopping testing companies from developing their test directly/plugging into EMR companies to provide results?
Bonus Muhan's Notes
Very cool, esp since it's an antibody test offering at home.
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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