Dims Deal Memo (Closing Date: 2021-08-21)

Muhan Zhang -

Deal Abstract

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

High quality B-corp supply chain and furniture company wants to create a D2C brand that pays designers more equitably.

Financials (VRB)

Question Notes
1. Fundraising Target? $1070000
2. Fundraised So Far? $624682
3. Pre-Money Valuation? $12000000
4. Previous Year's Annual Revenue $2190282
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-798494
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: Los Angeles, CA
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? True: Revenue more than 10x from 2019 to 2020
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? False: Needs to have nearly a mil for 18 months
Source

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

Question Score Notes
1. Engineering? 2 No engineering improvement, is business model and sourcing improvement
2. Timing? 2 D2c furniture is right time
3. Monopoly? 3 Good revenue
4. People? 2 Founder has right fundraising background but no furniture background
5. Distribution? 2 D2C so all through Internet
6. Durability? 2 Not sure product is what matters here, feel it's distribution and free shaping a la IKEA and Amazon
7. Secret? 2 By paying designers more equitably, Dims can get proprietary products and sell well designed furniture to people more cheaply through D2C

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

1. Manage costs while growing; 2. Furnish entire rooms and sell entire solutions; 3. Become really good at spotting new furniture that is tastemaking

What the Risks Are

1. Product is not as important as distribution; 2. Furniture unit economics are still tough; 3. Demand for ethical furniture is not growing at a venture clip

Bonus Muhan's Notes

Very cool, need to see some of the inventory.

Updates

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