COI Energy Deal Memo (Closing Date: 2021-03-31)

Muhan Zhang -

Deal Abstract

Invest in COI Energy
Republic is a startup investing platform where you can invest as little as $10 in impactful startups
Republic

SaaS company wants to sell an energy monitoring solution to businesses to help reduce their utility bill.

Financials (VRB)

|Question|Notes|
|---|---|---|
|1. Fundraising Target? |$1070000|
|2. Fundraised So Far?|$453209|
|3. Pre-Money Valuation?|$18000000|
|4. Previous Year's Annual Revenue |$191935|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) |~$-793777|

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: Tampa, FL
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 dropped from 2018 to 2019
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: At a mil will have 18 mths runway
Source

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

Question Score Notes
1. Engineering? 2 Platform that helps understand energy spikes better
2. Timing? 1 Not sure why now is the perfect time to build this business
3. Monopoly? 2 Has a good number of high profile customers, but declining revenue
4. People? 2 Strong founder but no other major teammates
5. Distribution? 2 Selling B2B requires connections
6. Durability? 3 If can be built, very durable
7. Secret? 1 Energy costs are enough of a pain point that large businesses will pay for a SaaS platform to help them manage and save energy costs

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

1. Get growth back on track; 2. Scale out a B2B sales playbook; 3. Demonstrate consistent return on investment for monitoring energy savings

What the Risks Are

1. Is a third party SaaS business the right entity to build this? 2. High costs and not corresponding high revenue; 3. Vitamin not a painkiller

Bonus Muhan's Notes

Very cool business, need to see founder's vision for scaling

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

So, did I invest?

Click here to find out.

Other thoughts, questions, comments, or concerns? Write me at mail@muhanzhang.com and let me know.