Deal Abstract

Founders (spouses?) team up to make CBD dog treats. Subscription economy, CBD, and dogs/spending on pets during recession, lots of attractive components together.
Financials (VRB)
Question | Notes |
---|---|
1. Fundraising Target? | $500000 |
2. Fundraised So Far? | $47382 |
3. Pre-Money Valuation? | $5000000 |
4. Previous Year's Annual Revenue | $175092 |
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$2373 |
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? | True: Two |
3. Has product in the market? | True: Revenue generating |
4. 6 months of continuous user growth or 6 months of revenue? | True: Tripled revenue |
5. Notable investors? | False: Bootstrapped |
6. Post-funding, will have 18 months of runway? | True: Profitable! |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
Question | Score | Notes |
---|---|---|
1. Engineering? | 3 | Haven't heard of CBD treats for dogs explicitly |
2. Timing? | 3 | Hemp, pets, anxiety... |
3. Monopoly? | 2 | Profitable and good revenue |
4. People? | 3 | Strong results. No special advantage, but founders have good results. |
5. Distribution? | 3 | D2c and that SUBSCRIPTION economy |
6. Durability? | 3 | Subscription subscription subscription |
7. Secret? | 3 | Subscription weed treats + dogs + economic recession = $$$ |
What has to go right for the startup to return money on investment:
1. Scale and go big; 2. Develop other high margin weed related products, maybe for cats/other pets?; 3. Keep building that subscription economy and potentially enter marketplace
What the Risks Are
1. Incredibly small business, is it venture backable; 2. Is the business a food company, weed company, or lifestyle brand?; 3. What if this isn't defensible?
Bonus Muhan's Notes
Stunning business for a vertical I have no personal experience in (sorry readers, I don't own pets.)


Updates
This is where I’ll post updates about the company. This way all my notes
Want to read the whole post?
You don't have access to this post on Startup Investing for All by Muhan Zhang at the moment, but if you upgrade your account you'll be able to see the whole thing, including comments, as well as all the other posts in the archive! Subscribing only takes a few seconds and will give you immediate access.