Deal Abstract
Alternative meat industry meats (heh) alcohol—alternative alcohol industry is creating mocktail liquor and going d2c. Doesn't even have to go through Drizly!
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1070000 |
| 2. Fundraised So Far? | $281879 |
| 3. Pre-Money Valuation? | $7000000 |
| 4. Previous Year's Annual Revenue | $22090 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-21859 |
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: Carlsbad, 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: Revenue increased from 2018 to 2019 |
| 5. Notable investors? | False: No one I recognize |
| 6. Post-funding, will have 18 months of runway? | True: Very comfortable runway |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 3 | Honestly product looks great, and available on Amazon |
| 2. Timing? | 3 | Healthy is definitely in |
| 3. Monopoly? | 3 | 4 stars on Amazon! |
| 4. People? | 2 | Team seems good |
| 5. Distribution? | 3 | Direct to consumer and available by Amazon |
| 6. Durability? | 2 | Seems like the same idea as alternative meats, has to get the winning formula then win win win |
| 7. Secret? | 2 | The wellness movement is going to disrupt social drinking by keeping the social and cutting the negative effects of alcohol |
What has to go right for the startup to return money on investment:
1. Profitable margins are amazing, now that product is validated, needs to go build brand and distribution; 2. Release more alcohols substitutes, and not only compete against alcohol, but actually beat it and become superior product; 3. Content marketing and maybe even getting into media to popularize mocktails
What the Risks Are
1. People drink for many reasons, among which, is the buzz from alcohol; 2. Is this that defensible?; 3. Is the mainstream market ready for this yet?
Bonus Muhan's Notes
So cool. Might need to Amazon and try this.
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
Notice trends in how you think
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.