Deal Abstract
B2B SaaS marketplace for... partial counter tops? Very cool Texas startup that is going after the inferior market and eventually trying to get a cut of all countertops raw slabs sold.
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1070000 |
| 2. Fundraised So Far? | $51880 |
| 3. Pre-Money Valuation? | $8500000 |
| 4. Previous Year's Annual Revenue | $315221 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-385989 |
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? | True: Two |
| 3. Has product in the market? | True: Revenue generating |
| 4. 6 months of continuous user growth or 6 months of revenue? | True: Revenue tripled from 2018 to 2019 |
| 5. Notable investors? | True: Techstars |
| 6. Post-funding, will have 18 months of runway? | True: They need $450k to have 18 mths of runway |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | Using SaaS to take a cost center into a revenue center |
| 2. Timing? | 3 | Feels like good timing, more home rehab during COVID, people trying to save money, vendors trying to make more money |
| 3. Monopoly? | 2 | No one else selling partial slab as it previously was a cost item |
| 4. People? | 2 | Team seems fine but cofounder LinkedIns are a little sparse |
| 5. Distribution? | 3 | B2B sales and then the businesses use the SaaS to sell their inventory |
| 6. Durability? | 3 | Not seeing likelihood for any other B2B SaaS company to do this |
| 7. Secret? | 3 | Monetizing waste e.g. partial slabs is the beachhead into turning a transparent full slab market going |
What has to go right for the startup to return money on investment:
1. Navigate the line between collaborate and compete well; 2. Able to provide a quality customer service for what is starting out as an inferior good; 3. Eventually take beachhead in countertops and go into other home building supplies
What the Risks Are
1. CAC cost for the consumer side of the marketplace increase and LTV is too optimistic at scale; 2. Too niche and not a large enough market, 3. Go to market strategy for each city is slow due to fragmented industry
Bonus Muhan's Notes
This is very, very cool.
Updates
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