Deal Abstract

Ernest Supplies
Omnichannel skincare brand redefining clean, sustainable, and inclusive products.

The Honest Company meets a direct to consumer skincare brand. Declining revenue in the year where their revenue should have gone bazonkers, can they cross the chasm?

Financials (VRB)

Question Notes
1. Fundraising Target? $1250000
2. Fundraised So Far? $56600
3. Pre-Money Valuation? $5000000
4. Previous Year's Annual Revenue $93526
5. Previous Year's Annual Net Income (+ Profitable, - Burning Cash) ~$-28677

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: New York, NY
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? False: Revenue DECLINED
5. Notable investors? False: No one I recognize
6. Post-funding, will have 18 months of runway? True: Low burn

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

Question Score Notes
1. Engineering? 3 Sort of like the Honest Company for skincare
2. Timing? 3 Good timing, more consumer knowledge, more online commerce
3. Monopoly? 1 Relatively little market share
4. People? 4 Small but mighty
5. Distribution? 3 This is a d2c brand
6. Durability? 2 How do you make this company durable? Is it proprietary supply chain?
7. Secret? 3 Building the Honest Company for Skincare is a billion dollar opportunity

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

1. Building subscription revenue/ongoing relationship; 2. Dominate e-commerce; 3. Identify product-market fit customers

What the Risks Are

1. Heavy competition; 2. Declining revenue means 2020 was not a make-it year for a digital native brand; 3. Skincare may not be venture backable (*may* being the operant word)

Bonus Muhan's Notes

Very cool, but declining revenue concerning.


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

So, did I invest?

Click here to find out.

Other thoughts, questions, comments, or concerns? Write me at and let me know.