Deal Abstract

https://www.seedinvest.com/death.co/series.a

Experiential bars with a strong reputation, based out of NYC’s East Village. This is a retroactive deal memo. Sought to raise $1.5MM at a valuation of $13MM. Remarkable in that this is an example of a boring business using a unconventional method of fundraising.

Decision

No.

Why Investing/Passing

  1. Restaurant/bar businesses doesn’t scale well.
  2. Brick and mortar businesses don’t scale fast.
  3. It took 12 years to grow to an estimated valuation of $13MM.

The 11 Calacanis Characteristics

Passed on 5/11.

CheckPass/Fail
1. Syndicate lead has >5 years investing and >1 unicorn investmentFail
2. A startup that is based in SVFail: (New York, NY)
3. Has at least 2 founders Pass: though the team was a bit unusually structured.
4. Has product in the market Pass
5. 6 months of continuous user growth or 6 months of revenue.Pass
6. Notable investors?Fail
7. Post-funding, will have 18 months of runway Pass: this business is raising money to expand, not because it’s not profitable/sustainable.
8. Proprietary technology?Fail
9. Network effects?
Fail
10. Economies of scale?
Fail
11. Great branding?
Pass: very trendy brand

The 7 Thiel Questions

  1. The Engineering question:
    • Bad: this company is not 10x-ing anything. That said, they never purported to be.
  2. The Timing question
    • Bad: no reasons why this is a particularly good or bad time to start a boutique experiential bar.
  3. The monopoly question
    • Bad: nope. The beverage and alcohol scene is probably like real estate e.g. very hard to monopolize. Not sure who the McDonald’s of experiential bars would be, or what that would even look like.


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