DigiBuild Deal Memo (Closing Date: 2021-05-22)

Deal Abstract

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

Blockchain powered project management software wants to revolutionize construction management.

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $549707
3. Pre-Money Valuation? $7500000
4. Previous Year's Annual Revenue $65340
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-85455
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: New Lenox, IL
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: Decreasing revenue
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: Only needed $120k for runway
Source

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

Question Score Notes
1. Engineering? 3 Using crypto to fix record keeping
2. Timing? 1 Why is now the time these companies will adopt this?
3. Monopoly? 1 Decreasing revenue
4. People? 2 Right founder but not seeing more unfair advantages selling B2B esp given revenue
5. Distribution? 2 Founder has good base but not phenomenal base
6. Durability? 4 If you can build this, insanely defensible
7. Secret? 1 Construction companies are going to leave behind their proprietary workflow systems internally to collaborate on a blockchain powered external standard

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

1. Troubleshoot revenue; 2. Get more sales; 3. Go deep first before expanding

What the Risks Are

1. Blockchain is a tool not a solution; 2. Firms will be reluctant to have new ways of doing things forced on them; 3. Real estate in general is quite any technology and innovation

Bonus Muhan's Notes

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.