Deal Abstract
Envel 🚀 on Wefunder
Nerds from Boston raised (and burned!) an astounding amount of money to build an app for budgeting. Is this the future of banking?
Financials (VRB)
| Question | Notes |
|---|---|
| 1. Fundraising Target? | $1070000 |
| 2. Fundraised So Far? | $1225313 |
| 3. Pre-Money Valuation? | $15000000 |
| 4. Previous Year's Annual Revenue | $0 |
| 5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) | ~$-1143644 |
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: Boston, MA |
| 2. Has at least 2 founders? | False: Two |
| 3. Has product in the market? | True: Beta online |
| 4. 6 months of continuous user growth or 6 months of revenue? | False: No revenue |
| 5. Notable investors? | False: Lots of institutional accelerator free competition money |
| 6. Post-funding, will have 18 months of runway? | False: Burning a lot of money |
The 7 Thiel Questions (Every Time Man Profits, Don't Dismiss Serendipity)
| Question | Score | Notes |
|---|---|---|
| 1. Engineering? | 2 | Prettier app but nothing fundamentally different |
| 2. Timing? | 2 | Good timing, but is this the right solution? |
| 3. Monopoly? | 1 | 20 ratings on App Store, nothing to write home about |
| 4. People? | 1 | No one with banking experience |
| 5. Distribution? | 1 | Downloading app to get users? |
| 6. Durability? | 2 | It is a bank, so once someone starts with them should not switch easily |
| 7. Secret? | 1 | Building a better UI/UX mobile app will make a superior bank |
What has to go right for the startup to return money on investment:
1. Develop a monetization strategy; 2. Acquire users; 3. Build a platform for tight integration via digital banking
What the Risks Are
1. Founders have no experience in banking; 2. What is the proprietary value add; 3. AI budgeting is not that useful of a feature
Bonus Muhan's Notes
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