Nerds have developed a new type of bicycle chain and pulley system and want to go head to head against the 100 year old invention.
|1. Fundraising Target?||$1000000|
|2. Fundraised So Far?||$686024|
|3. Pre-Money Valuation?||$3300000|
|4. Previous Year's Annual Revenue||$0|
|5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash)||~$-2483|
The 6 Calacanis Characteristics ("Sow Passion, Not easy mediocrity", or S2 P6 N18)
|1. A startup that is based in SV?||False: Boulder, CO|
|2. Has at least 2 founders?||False: Two|
|3. Has product in the market?||False: No product in market|
|4. 6 months of continuous user growth or 6 months of revenue?||False: No revenue|
|5. Notable investors?||False: None|
|6. Post-funding, will have 18 months of runway?||True: No burn yet|
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
|1. Engineering?||5||Incredible engineering improvement|
|2. Timing?||2||Not sure this is the right timing for market to adopt better tech on cycling|
|3. Monopoly?||1||No product in market|
|4. People?||4||Right people, esp with the parent co help|
|5. Distribution?||1||No manufacturing capacity|
|6. Durability?||4||Super durable if they can get the bicycle industry on it|
|7. Secret?||1||Better innovation can be better business and $1m is enough to compete against decades of millions of dollars of capital investment|
What has to go right for the startup to return money on investment:
1. Start selling bicycles that are super high margin to bootstrap for lower margin bicycles like Tesla; 2. Go from R&D into mass manufacturer; 3. Build massive D2C brand
What the Risks Are
1. Super capital intensive; 2. No idea what unit economics are like; 3. Sadly, as much as I love bicycles, this doesn't seem like a growth industry on venture size (even bikesharees are more of a network venture play that hardware.)
Bonus Muhan's Notes
So so so cool. Can't wait to see one of these in the wild.
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 firstname.lastname@example.org and let me know.