Deal Abstract
Facebook for ex convicts, making money by getting them jobs.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $371055 |
| 2. Fundraised So Far? | $4775 |
| 3. Pre-Money Valuation? | $10000000 |
| 4. Previous Year's Annual Revenue | $464874 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-671480 |
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: Los Angeles, CA |
| 2. Has at least 2 founders? | False: Two |
| 3. Has product in the market? | True: Market stalled due to Covid - launched social network component during down cycle. |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Revenue grew 5 times in a year |
| 5. Notable investors? | True: YC and Founders Fund |
| 6. Post-funding, will have 18 months of runway? | False: Raising too little money |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | Don't know of another Facebook for cons |
| 2. Timing? | 2 | COVID timing really kicked them in the butt |
| 3. Monopoly? | 3 | Again, I know few social networks for this community that are venture backed |
| 4. People? | 3 | Founder has financial services background and has been in prison |
| 5. Distribution? | 3 | Word of mouth I presume |
| 6. Durability? | 3 | Durable |
| 7. Secret? | 2 | Building a social network and services for cons is a venture backable business |
What has to go right for the startup to return money on investment:
1. Go deep on the jobs revenue by identifying employers most likely to hire; 2. Build strong brand that actually makes cons who are certified by Commissary more safe to hire; 3. Become as essential as Amazon Prime to ex-cons
What the Risks Are
1. Market is not growing at venture speed; 2. Perception of cons is not growing at venture speed; 3. Rich people problems being solved here is employers, and as a backup, cons are not a great market due to limited purchasing power
Bonus Muhan's Notes
Really inspirational business here. On the fence. Need to ask questions.
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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